Severable Services Contracts
B-317636: Apr 21, 2009
This responds to a Congressional request for our legal opinion on whether 10 U.S.C. 2410 and 41 U.S.C. 253l restrict a federal agency using multiple year or no-year appropriations to contracts for periods of performance no longer than 1 year. Both of these provisions permit agencies to enter into severable services contracts that cross fiscal years for up to 1 year and obligate the appropriations current at the time the agencies enter into the contract.
Sections 2410a and 253l provide agencies relief from the constraints of the bona fide needs rule so that they may use fiscal year appropriations to contract across fiscal years for severable services. The 1-year contract period limitations in the two provisions do not apply to contracts funded by multiple year or no-year appropriations. Hence, federal agencies may use multiple year or no-year funds to enter into contracts for severable services for a period of performance longer than 1 year and an agency using multiple year or no-year funds is free to contract for the full period of availability the statute appropriating those funds allows.