Under DFARS, when can a fixed-price contract be incrementally funded with funds from multiple fiscal years?

• A. The contract uses funds available from multiple FYs and is funded with research and development appropriations, or Congress has authorized incremental funding.
• B. The contract is for non-severable services and lasts longer than one year.
• C. The contract is cost reimbursement and not severable.
• D. The contract uses only a single fiscal year's funds.

Answer: (A)

Incremental funding for a fixed-price contract is allowed only when funds from more than one fiscal year are available and there is explicit permission to fund incrementally—either because the funds come from research and development appropriations or because Congress has authorized incremental funding. This arrangement satisfies the anti-deficiency rule by ensuring there’s a clear, authorized path to obligate funds in future years.

So the correct option reflects both conditions: using funds from multiple fiscal years and the presence of R&D funding or Congress’s authorization for incremental funding. The other scenarios don’t meet those requirements: incremental funding isn’t automatically allowed for non-severable services lasting over a year or for cost-reimbursement contracts, and funding from a single fiscal year does not involve incremental funding.