252.232-7007 Limitation of Governments

Obligation.

As prescribed in 232.706-70 , use the following clause:

LIMITATION OF GOVERNMENT’S OBLIGATION (APR 2014)

(a) Contract line item(s) [Contracting Officer insert after negotiations] is/are incrementally funded.

For this/these item(s), the sum of $ [Contracting Officer insert after negotiations] of the total price is

presently available for payment and allotted to this contract. An allotment schedule is set forth in

paragraph (j) of this clause.

(b) For item(s) identified in paragraph (a) of this clause, the Contractor agrees to perform up to the

point at which the total amount payable by the Government, including reimbursement in the event of

termination of those item(s) for the Government’s convenience, approximates the total amount

currently allotted to the contract. The Contractor is not authorized to continue work on those item(s)

beyond that point. The Government will not be obligated in any event to reimburse the Contractor in

excess of the amount allotted to the contract for those item(s) regardless of anything to the contrary

in the clause entitled “Termination for Convenience of the Government.” As used in this clause, the

total amount payable by the Government in the event of termination of applicable contract line

item(s) for convenience includes costs, profit, and estimated termination settlement costs for those

item(s).

(c) Notwithstanding the dates specified in the allotment schedule in paragraph (j) of this clause, the

Contractor will notify the Contracting Officer in writing at least ninety days prior to the date when,

in the Contractor’s best judgment, the work will reach the point at which the total amount payable

by the Government, including any cost for termination for convenience, will approximate 85 percent

of the total amount then allotted to the contract for performance of the applicable item(s). The

notification will state (1) the estimated date when that point will be reached and (2) an estimate of

additional funding, if any, needed to continue performance of applicable line items up to the next

scheduled date for allotment of funds identified in paragraph (j) of this clause, or to a mutually

agreed upon substitute date. The notification will also advise the Contracting Officer of the

estimated amount of additional funds that will be required for the timely performance of the item(s)

funded pursuant to this clause, for a subsequent period as may be specified in the allotment

schedule in paragraph (j) of this clause or otherwise agreed to by the parties. If after such

notification additional funds are not allotted by the date identified in the Contractor’s notification, or

by an agreed substitute date, the Contracting Officer will terminate any item(s) for which additional

funds have not been allotted, pursuant to the clause of this contract entitled “Termination for

Convenience of the Government.”

(d) When additional funds are allotted for continued performance of the contract line item(s)

identified in paragraph (a) of this clause, the parties will agree as to the period of contract

performance which will be covered by the funds. The provisions of paragraphs (b) through (d) of this

clause will apply in like manner to the additional allotted funds and agreed substitute date, and the

contract will be modified accordingly.

(e) If, solely by reason of failure of the Government to allot additional funds, by the dates indicated

below, in amounts sufficient for timely performance of the contract line item(s) identified in

paragraph (a) of this clause, the Contractor incurs additional costs or is delayed in the performance
of the work under this contract and if additional funds are allotted, an equitable adjustment will be

made in the price or prices (including appropriate target, billing, and ceiling prices where

applicable) of the item(s), or in the time of delivery, or both. Failure to agree to any such equitable

adjustment hereunder will be a dispute concerning a question of fact within the meaning of the

clause entitled “Disputes.”

(f) The Government may at any time prior to termination allot additional funds for the performance

of the contract line item(s) identified in paragraph (a) of this clause.

(g) The termination provisions of this clause do not limit the rights of the Government under the

clause entitled “Default.” The provisions of this clause are limited to the work and allotment of funds

for the contract line item(s) set forth in paragraph (a) of this clause. This clause no longer applies

once the contract is fully funded except with regard to the rights or obligations of the parties

concerning equitable adjustments negotiated under paragraphs (d) and (e) of this clause.

(h) Nothing in this clause affects the right of the Government to terminate this contract pursuant to

the clause of this contract entitled “Termination for Convenience of the Government.”

(i) Nothing in this clause shall be construed as authorization of voluntary services whose acceptance

is otherwise prohibited under 31 U.S.C. 1342.

(j) The parties contemplate that the Government will allot funds to this contract in accordance with

the following schedule:

On execution of contract $ ________

(month) (day), (year) $ ________

(month) (day), (year) $ ________

(month) (day), (year) $ ________

(End of clause)

Parent topic: 252.232 RESERVED