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Option(s) for Non-severable Services - Funded in Full at Option Exercise

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I.	Basic Appropriations Law Concepts
	A.	Anti-Deficiency Act
	B.	Bona Fide Needs Rule
	C.	Appropriation Types
		1.	Annual
		2.	Multiple-Year
		3.	No-Year
	D.	Continuing Resolution
II.	Decision Factors
	A.	No-Year Appropriation
	B.	Bona Fide Needs Rule
	C.	Acquiring Severable Services
		1.	Annual Appropriation
			a.	Contract period not more than one year
			b.	Contract period more than one year
				-	Options
				-	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
				-	Options
				-	Incremental Funding
		3.	Modifications
	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
		4.	Modifications
	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

Option(s) for Non-severable Services — Funded in Full at Option Exercise

Contract formation and funding (obligation) are valid.

Contract modifications to exercise option(s) (for non-severable services) must fully-funded from a then-current appropriation source, unless another funding approach is authorized by statute. At this time, the only statutorily authorized exception applicable to HHS is the general authority conferred by 41 U.S.C. 254c ^* and FAR Subpart 17.1 to enter into multi-year contracts. In this case, the option(s) will be fully funded from a then-current appropriation source upon exercise and, therefore, will comply with the applicable provisions of appropriations law.

NOTE: The term "then-current appropriation source" means one that is available for obligation on the date the contract action will be executed/effective.

Return to Decision Factors

^* Re-codified as 41 U.S.C. 3903 by Public Law 111-350, January 4, 2011. This new citation is not yet available as a hyper-link in the United States Code web site maintained by the Office of the Law Revision Counsel, U.S. House of Representatives

Option(s) for Non-severable Services - Funded in Full at Option Exercise

HHS Reference Tool Content

Option(s) for Non-severable Services — Funded in Full at Option Exercise