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HHS Reference Tool for Contract Funding, Formation and Appropriations Law Compliance



Regulations and

Case Studies

Frequently Asked Questions


HHS Reference Tool Content

I.Basic Appropriations Law Concepts
 A.Anti-Deficiency Act
 B.Bona FideNeeds Rule
 C.Appropriation Types
 D.Continuing Resolution
II.Decision Factors
 A.No-Year Appropriation
 B.Bona FideNeeds Rule
 C.Acquiring Severable Services
  1.Annual Appropriation
   a.Contract period not more than one year
   b.Contract period more than one year
    -Incremental Funding
  2.Multiple-Year Appropriation
   a.Contract period will not extend beyond multiple-year appropriation's period of availability
   b.Contract period will extend beyond multiple-year appropriation's period of availability
    -Incremental Funding
 D.Acquiring Non-severable Services
  1. Funded in Full
    a.Entire Contract/Single Requirement
    b.Fully Funded Initial Requirement (Followed by Options)
  2.Multi-year Contracting
  3.Options After Initial Requirement
    a.Severable Services
    -Annual Appropriation
    -Multiple-Year Appropriation
    b.Non-severable Services
    -Fully Funded
    -Multi-Year Contract
 E.Acquiring both severable and non-severable services
  1.Single Definitive Contract
  2.Indefinite-Delivery/Indefinite-Quantity Contract
III.Case Studies
IV.Frequently Asked Questions

Options – Severable Services – Multiple-Year Appropriation

Will each option(s) be limited to a performance period that will not extend beyond the multiple-year appropriation's period of availability?

Yes        No


Help Notes

A multiple-year appropriation is available by its very terms for the bona fide needs of the agency arising during that multiple-year period. Consequently, an agency using a multiple-year appropriation would not violate the bona fide needs rule if it enters into a severable services contract for more than 1 year as long as the period of contract performance does not exceed the period of availability of the multiple-year appropriation. (See: B-317636, Apr. 21, 2009)

While there is no distinction in the nature of the severable services that may be performed, the procurement of such services using a multiple-year appropriation introduces different issues to consider during contract formation. A contract for temporary help (severable) services funded by a multiple-year appropriation (e.g., certain ARRA appropriations were made available for FY 2009-2010) may not authorize performance of such services beyond the final date of the appropriation’s period of availability (September 30, 2010 in this ARRA example). The FASA exception implemented by FAR 32.703-3(b), Contracts crossing fiscal years, only applies to annual appropriations.

Keep the above limitations in mind when choosing among the alternative contract formation and funding strategies for acquiring severable services. While the alternatives (options, incremental funding and multi-year contracts) are identical to those illustrated when using annual appropriations, it is possible to fund a base period, option or incremental funding period for more than one year when using a multiple-year appropriation. Given their relative rarity within HHS, please consult with your finance/budget office, Office of the General Counsel, and/or contracting officer when using a multiple-year appropriation source.