FAR 32.702—Policy.
Plain-English Summary
FAR 32.702 states the core fiscal law rule for federal contracting: no Government officer or employee may create or authorize an obligation that exceeds available funds or is made before appropriations exist, unless another law specifically allows it. The section ties the Anti-Deficiency Act, 31 U.S.C. 1341, directly to contract formation and makes clear that contracting officers must not execute a contract until they have either written confirmation from the responsible fiscal authority that funds are available or have expressly made the contract contingent on the availability of funds under FAR 32.703-2. In practice, this section is about preventing unauthorized commitments, avoiding violations of fiscal law, and ensuring the Government does not promise payment without legal funding authority. It applies at the point of award and is a gatekeeping requirement for contract execution. For contractors, it signals that a contract may be invalid or delayed if funding is not yet available, and that any promise of payment must be supported by proper fiscal documentation or a valid funding contingency.
Key Rules
No obligations beyond funds
Government personnel may not create or authorize an obligation in excess of available funds or in advance of appropriations unless a separate law authorizes that action. This is the basic Anti-Deficiency Act limitation that controls when the Government can bind itself financially.
Written funds assurance required
Before executing a contract, the contracting officer must obtain written assurance from the responsible fiscal authority that adequate funds are available. This written confirmation is the normal safeguard showing the contract is supported by current funding.
Conditional award allowed
If funds are not yet available, the contracting officer may expressly condition the contract on the availability of funds under FAR 32.703-2. The contract must clearly state that the Government’s obligation depends on future funding availability.
Execution cannot precede funding authority
The contracting officer may not sign or execute the contract until one of the two funding protections is in place. This prevents the Government from making an enforceable commitment without legal budget authority.
Fiscal authority is responsible source
The assurance of funds must come from the responsible fiscal authority, not merely from program personnel or assumptions about future appropriations. The rule requires an authorized funding source to verify availability.
Responsibilities
Contracting Officer
Must ensure no contract is executed without either written assurance of adequate funds or an express funding contingency. The contracting officer must verify the funding basis before obligating the Government and must use the conditional contract approach when funds are not yet available.
Responsible Fiscal Authority
Must provide written assurance when adequate funds are available. This party is the source of the official funding confirmation that supports contract execution.
Government Officers and Employees
Must not create or authorize obligations that exceed available funds or are made before appropriations, unless another law permits it. They must avoid actions that would violate the Anti-Deficiency Act.
Contractor
Must recognize that award may depend on confirmed funding or a valid funding contingency. The contractor should review whether the contract is fully funded or expressly conditioned before relying on performance or payment commitments.
Practical Implications
This section is a hard stop on award authority: if funding is not confirmed, the contracting officer must either wait or use a proper funding contingency. Skipping this step can create an Anti-Deficiency Act problem and an unenforceable or delayed contract.
A common pitfall is relying on informal verbal assurances from program staff instead of written confirmation from the responsible fiscal authority. FAR 32.702 requires written assurance, not assumptions or emails from the wrong office.
Another risk is failing to make the contingency language explicit when funds are not yet available. If the contract is not clearly conditioned under FAR 32.703-2, the Government may appear to have obligated itself improperly.
Contractors should watch for awards issued before full funding is in place, especially at the end of a fiscal year or when appropriations are pending. They should confirm whether performance can begin immediately or only after funding is formally available.
For contracting officers, this rule is both a compliance requirement and a documentation requirement. The file should show the funding certification or the conditional clause, because the absence of either can create audit findings and legal exposure.
Official Regulatory Text
No officer or employee of the Government may create or authorize an obligation in excess of the funds available, or in advance of appropriations (Anti-Deficiency Act, 31 U.S.C. 1341 ), unless otherwise authorized by law. Before executing any contract, the contracting officer shall- (a) Obtain written assurance from responsible fiscal authority that adequate funds are available or (b) Expressly condition the contract upon availability of funds in accordance with 32.703-2 .