FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.7
FAR 32.703-2 Contracts conditioned upon availability of funds.
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 contracting officer may start contract actions before the new fiscal year's funds are actually available. It limits that authority to certain operation and maintenance or continuing services, and it requires specific availability-of-funds clauses in the contract. It also says the Government cannot accept supplies or services under a fund-conditioned contract until the contractor is notified that funds are available.
Applies to: Contracts conditioned upon the availability of funds
What it requires
- Include the clause at 52.232-18 for fiscal year contracts initiated before funds are available
- Ensure specified minimum quantities are certain to be ordered in the initial fiscal year for indefinite-quantity or requirements contracts
- Include the clause at 52.232-19 for a one-year indefinite-quantity or requirements contract funded by annual appropriations that extends beyond the fiscal year
- Do not accept supplies or services under a fund-conditioned contract until the contracting officer gives notice, confirmed in writing, that funds are available
Key terms: Fiscal year contracts · Indefinite-quantity or requirements contracts · Availability of Funds · Availability of Funds for the Next Fiscal Year · Annual appropriations
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(a) Fiscal year contracts. The contracting officer may initiate a contract action properly chargeable to funds of the new fiscal year before these funds are available, provided that the contract includes the clause at 52.232-18, Availability of Funds (see 32.706-1(a)). This authority may be used only for operation and maintenance and continuing services (e.g., rentals, utilities, and supply items not financed by stock funds) (1) necessary for normal operations and (2) for which Congress previously had consistently appropriated funds, unless specific statutory authority exists permitting applicability to other requirements.
(b) Indefinite-quantity or requirements contracts. A one-year indefinite-quantity or requirements contract for services that is funded by annual appropriations may extend beyond the fiscal year in which it begins; provided, that (1) any specified minimum quantities are certain to be ordered in the initial fiscal year (see 37.106) and (2) the contract includes the clause at 52.232-19, Availability of Funds for the Next Fiscal Year (see 32.706-1(b)).
(c) Acceptance of supplies or services. The Government shall not accept supplies or services under a contract conditioned upon the availability of funds until the contracting officer has given the contractor notice, to be confirmed in writing, that funds are available.
Sections it refers to
← 32.703-1 General. · 32.703-3 Contracts crossing fiscal years. →
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.