FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.7
FAR 32.703-1 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 how funds are obligated for fully funded versus incrementally funded contracts. For a fully funded contract, funds cover the full price or target price (fixed-price) or the estimated cost and any fee (cost-reimbursement). For an incrementally funded contract, funds cover only the amount allotted and any corresponding fee increment.
Applies to: Government contracts that are fully funded or incrementally funded
Key terms: fully funded · incrementally funded · obligated · fixed-price contract · cost-reimbursement contract
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(a) If the contract is fully funded, funds are obligated to cover the price or target price of a fixed-price contract or the estimated cost and any fee of a cost-reimbursement contract.
(b) If the contract is incrementally funded, funds are obligated to cover the amount allotted and any corresponding increment of fee.
← 32.703 Contract funding requirements. · 32.703-2 Contracts conditioned upon availability of funds. →
Rule changes for FAR Part 32
- Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds ↗ · final rule 2025-08-27 · effective 2025-10-01
- Federal Acquisition Regulation; Technical Amendments ↗ · final rule 2025-08-07 · effective 2025-08-07
- Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds ↗ · proposed 2024-11-29 · comments due 2025-01-28
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.