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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

Single Definitive Contract

It is possible for a single contract to contain a significant portion of both severable and non-severable services. In such cases, the services must be structured as separate contract line items and funded in accordance with the appropriations law principles applicable to the service type. However, in a situation where the contract requirement is primarily for one type of service (e.g., non-severable), but contains incidental services of the second type (e.g., severable) that cannot be feasibly separated, the contract should be managed and funded consistent with its core services. Consider, for example, a 24-month contract for a non-severable research project that includes a requirement for ongoing analysis of drug compounds as a minor component. There is no need to artificially separate the severable drug analysis activity from the core contract requirement for non-severable research services. This contract would most appropriately be considered and managed as a contract for non-severable services given that the severable component is incidental to the contract’s primary purpose.