52.232-18
Availability of Funds
Contractors cannot expect payment or begin work until the Contracting Officer provides written notice that funds are available for the contract.
Overview
FAR 52.232-18, "Availability of Funds," is a contract clause used when funds have not yet been appropriated for a contract at the time of award. It notifies contractors that the Government is not legally obligated to make payments until funds are officially made available and the contractor is notified in writing by the Contracting Officer. This clause protects the Government from financial liability if appropriations are not received and ensures contractors are aware of the funding contingency before beginning work or incurring costs.
Key Rules
- No Funds Currently Available
- The Government does not currently have appropriated funds for the contract at the time of award.
- Contingent Government Obligation
- The Government’s obligation to pay is contingent upon the future availability of appropriated funds.
- No Legal Liability Until Notification
- No legal liability for payment arises until funds are made available and the contractor receives written notice from the Contracting Officer.
Responsibilities
- Contracting Officers: Must provide written notification to the contractor when funds become available.
- Contractors: Must not expect payment or begin work until official notification of funding is received.
- Agencies: Must ensure compliance with appropriations law and proper notification procedures.
Practical Implications
- This clause exists to prevent unauthorized government spending and to comply with federal appropriations law.
- Contractors should not incur costs or begin performance until written confirmation of funding is received.
- Common pitfalls include starting work prematurely or misunderstanding the Government’s obligation prior to funding.