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