43.105 Availability of funds
Source: FAR 43.105 on acquisition.gov
Always obtain and document certification of fund availability before executing contract modifications that increase funding, unless a specific exception applies.
Overview
FAR 43.105 establishes requirements for ensuring the availability of funds before executing contract modifications that increase funding. Contracting officers must obtain a certification of fund availability prior to any modification that obligates additional funds, except in cases where the contract is already conditioned on the availability of funds or contains a limitation of cost or funds clause. The certification should be based on the negotiated price, or if not yet agreed, the best available cost estimate. Additionally, the section prohibits providing funds to higher education institutions that restrict military recruiting or ROTC activities, with exceptions for acquisitions at or below the simplified acquisition threshold and for commercial products or services.
Key Rules
- Certification of Fund Availability
- Contracting officers must secure a certification of fund availability before executing any contract modification that increases funding, unless specific exceptions apply.
- Exceptions to Certification Requirement
- No certification is required for modifications conditioned on availability of funds or those with limitation of cost/funds clauses.
- Basis for Certification
- Certification should be based on the negotiated price, or the best available estimate if price is not finalized.
- Restrictions on Funding to Certain Educational Institutions
- Funds cannot be provided to higher education institutions that hinder ROTC or military recruiting, except for certain small or commercial acquisitions.
Responsibilities
- Contracting Officers: Must obtain and document fund availability certification before increasing contract funding, and ensure compliance with restrictions on funding to certain educational institutions.
- Contractors: Should be aware of funding restrictions and ensure their modifications comply with these requirements.
- Agencies: Must enforce certification and funding restriction policies, and monitor compliance.
Practical Implications
- This section ensures fiscal responsibility and legal compliance by requiring confirmation of available funds before increasing contract obligations.
- It prevents unauthorized or unfunded contract modifications, reducing financial risk.
- Contractors and contracting officers must be vigilant about exceptions and special restrictions, particularly regarding educational institutions and military recruiting.
(a) The contracting officer shall not execute a contract modification that causes or will cause an increase in funds without having first obtained a certification of fund availability, except for modifications to contracts that-
(1) Are conditioned on availability of funds (see 32.703-2); or
(2) Contain a limitation of cost or funds clause (see 32.704).
(b) The certification required by paragraph (a) of this section shall be based on the negotiated price, except that modifications executed before agreement on price may be based on the best available estimate of cost.
(c) In accordance with https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section983&num=0&edition=prelim" target="_blank">10 U.S.C. 983, do not provide funds by contract or contract modification, or make contract payments, to an institution of higher education that has a policy or practice of hindering Senior Reserve Officer Training Corps units or military recruiting on campus as described at 9.110. The prohibition in this paragraph (c) does not apply to acquisitions at or below the simplified acquisition threshold or to acquisitions of commercial products, including commercially available off-the-shelf items, and commercial services.