32.702
Policy
Contracting officers must not obligate government funds without written assurance of availability or a contract clause making performance contingent on future funding, ensuring compliance with the Anti-Deficiency Act.
Overview
FAR 32.702 establishes the fundamental policy that no government officer or employee may create or authorize financial obligations exceeding available funds or before appropriations are made, in accordance with the Anti-Deficiency Act. This section requires contracting officers to ensure that sufficient funds are available before executing any contract. If funds are not yet available, the contract must be expressly conditioned on the availability of funds, following the procedures in FAR 32.703-2. This policy is designed to prevent unauthorized government spending and ensure fiscal responsibility in federal contracting.
Key Rules
- No Obligations Beyond Available Funds
- Government personnel cannot obligate funds in excess of what is available or before appropriations, unless specifically authorized by law.
- Written Assurance of Funds
- Contracting officers must obtain written confirmation from the responsible fiscal authority that adequate funds are available before contract execution.
- Conditional Contracts
- If funds are not yet available, contracts must include a clause making performance contingent on the availability of funds, per FAR 32.703-2.
Responsibilities
- Contracting Officers: Must secure written assurance of funds or include a conditional availability clause before contract execution.
- Contractors: Should be aware that contracts may be contingent on funding and monitor for any conditional clauses.
- Agencies: Must enforce compliance with the Anti-Deficiency Act and ensure fiscal controls are in place.
Practical Implications
- This section exists to prevent violations of the Anti-Deficiency Act and ensure government contracts are only executed with proper funding.
- It impacts daily contracting by requiring strict verification of funds before obligations are made.
- Common pitfalls include failing to obtain written assurance or omitting the required conditional clause, which can result in contract delays or legal violations.