FAR 32.700—Scope of subpart.
Plain-English Summary
FAR 32.700 is a short scope provision that tells readers what Subpart 32.7 covers and, just as importantly, what it does not. It says the subpart addresses two main topics: the basic requirements for contract funding and the procedures for using the Limitation of Cost and Limitation of Funds clauses. It also points readers to agency fiscal regulations for the more detailed funding rules that govern how money is obligated, recorded, and managed within a particular agency. In practice, this section is a roadmap: it signals that the FAR provides the core contracting framework, while agency fiscal rules supply the detailed financial administration requirements. For contracting officers, contractors, and finance personnel, the section matters because it frames where to look for funding authority, funding limits, and the procedural steps that control cost-reimbursement and incrementally funded contracts.
Key Rules
Subpart covers funding basics
This subpart establishes the basic requirements for contract funding. It is the starting point for understanding how federal contracts must be funded and what minimum funding-related controls apply.
Subpart covers limitation clauses
The subpart also prescribes procedures for using the Limitation of Cost and Limitation of Funds clauses. Those clauses are central to controlling the government's financial exposure on certain contracts, especially when funding is not fully obligated at award.
Agency fiscal rules fill in details
Detailed acquisition funding requirements are not all in the FAR; they are contained in agency fiscal regulations. Users must therefore consult the applicable agency-specific fiscal guidance for the operational and accounting details that supplement the FAR.
Scope is limited to this subpart
This section is only a scope statement, not a full funding rule set. It tells the reader what topics are addressed in Subpart 32.7 and helps distinguish those topics from other FAR parts or agency financial policies.
Responsibilities
Contracting Officer
Use Subpart 32.7 as the governing FAR framework for contract funding issues and apply the Limitation of Cost or Limitation of Funds clauses when appropriate. Also coordinate with agency fiscal regulations to ensure the contract is funded and administered correctly.
Contractor
Understand that funding requirements may come from both the FAR and agency fiscal regulations, and comply with any limitation clauses included in the contract. Monitor funding status and performance obligations carefully when the contract is not fully funded.
Agency
Issue and maintain detailed fiscal regulations that supplement the FAR’s basic funding requirements. Ensure those regulations provide the acquisition funding procedures needed for proper obligation, accounting, and administration.
Finance/Fiscal Officials
Support the contracting process by applying agency fiscal rules for funding, obligation, and funds control. Coordinate with contracting personnel so funding actions align with both fiscal law and contract administration requirements.
Practical Implications
This section tells users where to look first: the FAR for the general funding framework, and agency fiscal regulations for the detailed mechanics.
A common pitfall is assuming the FAR alone contains all funding rules; in reality, agency fiscal regulations often control the specifics of how funding is handled.
When Limitation of Cost or Limitation of Funds clauses are used, both parties must watch funding status closely to avoid unauthorized overrun or performance beyond available funds.
Contracting officers should verify that the correct clause is included and that agency fiscal procedures are followed before award or modification.
Contractors should not rely on the scope section for detailed compliance steps; they need the actual clause text and the applicable agency fiscal guidance to manage performance properly.
Official Regulatory Text
This subpart (a) describes basic requirements for contract funding and (b) prescribes procedures for using limitation of cost or limitation of funds clauses. Detailed acquisition funding requirements are contained in agency fiscal regulations.