FAR and DFARS › DFARS Part 232: Contract Financing › Subpart 232.7
DFARS 232.703-1 General.
The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.
In plain English
This section explains when a fixed-price contract may be incrementally funded. It matters because incremental funding is only allowed in specific situations, and once funds become available, the contract must be fully funded.
Applies to: Fixed-price contracts
What it requires
- Fully fund an incrementally funded fixed-price contract as soon as funds are available.
Key terms: fixed-price contract · incrementally funded · severable services · exercised option · fiscal years
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(1) A fixed-price contract may be incrementally funded only if—
(i) The contract (excluding any options) or any exercised option—
(A) Is for severable services;
(B) Does not exceed one year in length; and
(C) Is incrementally funded using funds available (unexpired) as of the date the funds are obligated; or
(ii) The contract uses funds available from multiple (two or more) fiscal years and—
(A) The contract is funded with research and development appropriations; or
(B) Congress has otherwise authorized incremental funding.
(2) An incrementally funded fixed-price contract shall be fully funded as soon as funds are available.
Sections that refer to it
- 232.702 Policy.
← 232.703 Contract funding requirements. · 232.703-3 Contracts crossing fiscal years. →
Rule changes for DFARS Part 232
- Defense Federal Acquisition Regulation Supplement; Technical Amendments ↗ · final rule 2024-07-29 · effective 2024-07-29
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.