1. (1) A fixed-price contract may be incrementally funded only if—

   1. (i) The contract (excluding any options) or any exercised option—

      1. (A) Is for severable services;
      2. (B) Does not exceed one year in length; and
      3. (C) Is incrementally funded using funds available (unexpired) as of the date the funds are obligated; or

   2. (ii) The contract uses funds available from multiple (two or more) fiscal years and—

      1. (A) The contract is funded with research and development appropriations; or
      2. (B) Congress has otherwise authorized incremental funding.
2. (2) An incrementally funded fixed-price contract shall be fully funded as soon as funds are available.

[71 FR 18673, Apr. 12, 2006]