Overview
This section establishes the fiscal requirements for contract modifications, primarily mandating that a contracting officer verify and certify the availability of funds before executing any modification that increases the contract's financial obligation.
Key Rules
- Mandatory Certification: Contracting officers must obtain a certification of fund availability prior to executing any modification that increases funding.
- Exceptions to Certification: Pre-certification is not required if the modification is expressly conditioned on the future availability of funds or if the contract already contains specific "limitation of cost" or "limitation of funds" clauses.
- Basis for Certification: The amount certified must be based on the negotiated price; however, for modifications executed before a final price is agreed upon (such as letter contracts or change orders), the certification is based on the best available cost estimate.
- Institutional Restrictions: Under 10 U.S.C. 983, funds cannot be provided to institutions of higher education that prohibit or hinder military recruiting or ROTC units, unless the acquisition is at or below the simplified acquisition threshold or is for commercial products and services.
Practical Implications
- Anti-Deficiency Act Compliance: These rules serve as a safeguard to prevent contracting officers from violating the Anti-Deficiency Act by obligating the government to spend money that has not been appropriated or allotted.
- Administrative Coordination: In practice, this requires close coordination between the contracting officer and the agency’s financial management or budget office to ensure the "funding string" is secured before any supplemental agreement is signed.