The General Services Administration is proposing to amend its acquisition rules to authorize incremental funding for fixed price, time and materials and labor hour contracts. The FAR provides clauses for incremental funding for cost type contracts while it does not do so for the others despite the fact there is no prohibition to do so.  The proposed rule will amend GSAM Subpart 532.7 and add a new clause to specify which contract lines items are incrementally funded and the amount of the total contract price that is available for payment. The clause stipulates the contractor will agree to perform up to the point at which the total amount payable by the government approximates but does not exceed the total amount currently allotted to the contract where the contractor is not authorized to continue work on those items beyond that point. The clause further requires contractors to notify COs in writing at least 90 days prior to the date when “in the contractor’s best judgment” the work will reach the point where total amount payable by the government will approximate 85 percent of the total amount allotted to the contract for the applicable items.  In addition to estimating the date this will be reached the contractor must include in the notification an estimate of additional funding needed until the next scheduled date for allotting additional funds.  Also the clause provides for an equitable adjustment of item prices, delivery deadlines or both when the contractor incurs additional costs or delays due to the government’s failure to allot more funds (Fed Reg. 58515).

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