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FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.7

FAR 32.703-3 Contracts crossing fiscal years.

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 contract funded by annual appropriations can cross fiscal years. Generally, such contracts cannot cross fiscal years unless a specific law allows it or the work cannot be divided into separate yearly parts. It also allows agency heads (except NASA) to award contracts, exercise options, or place orders for severable services that start in one fiscal year and end in the next, as long as the total period does not exceed one year.

Applies to: Contracts funded by annual appropriations

What it requires

  • Ensure a contract funded by annual appropriations does not cross fiscal years unless authorized by statute or the work cannot feasibly be subdivided.
  • For severable services contracts that cross fiscal years, ensure the period does not exceed one year.

Key terms: annual appropriations · severable services · fiscal year · obligated

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) A contract that is funded by annual appropriations may not cross fiscal years, except in accordance with statutory authorization (e.g., 41 U.S.C. 6302, 31 U.S.C. 1308, 42 U.S.C. 2459a, 42 U.S.C. 3515, and paragraph (b) of this subsection), or when the contract calls for an end product that cannot feasibly be subdivided for separate performance in each fiscal year (e.g., contracts for expert or consultant services).

(b) The head of an executive agency, except NASA, may enter into a contract, exercise an option, or place an order under a contract for severable services for a period that begins in one fiscal year and ends in the next fiscal year if the period of the contract awarded, option exercised, or order placed does not exceed one year (10 U.S.C. 3133 and 41 U.S.C. 3902). Funds made available for a fiscal year may be obligated for the total amount of an action entered into under this authority.

Sections that refer to it

  • 37.106 Funding and term of service contracts.

← 32.703-2 Contracts conditioned upon availability of funds. · 32.704 Limitation of cost or funds. →

Rule changes for FAR Part 32

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 32.703-3 Contracts crossing fiscal years · SpendQuery