OBLIGATED FUNDS AND LIMITATION OF FUNDS
A. Buyer shall not be obligated to pay Seller an amount in excess of funds obligated as
indicated below:
The funds set forth below shall be considered actually obligated by Buyer to Seller as of
the first day of each specified funding period. In the event Buyer terminates or issues a
stop work order for all or a portion of the contract work, funding for the affected task or
portion thereof shall be frozen as of the date notice is given to Seller.
Within 30 days after receipt of an authorization to proceed with the work, Seller shall
provide to Buyer a Termination Liability Funding Forecast (Form 11570). The
Termination Liability Funding Forecast form is located in AeroCode-5675 (instructions
are under the Material Management Homepage – under Policies, Procedures & Related
Tools in the Guides & Manual section.) After the initial report, Seller shall submit
additional reports to Buyer on a quarterly basis. Reports shall be due by the end of April,
July, October, and January, and shall indicate actual dollars as of the end of March, June,
September and December, respectively.
B. Buyer may increase or decrease funds obligated in paragraph A above at any time by
written notice to Seller. Seller shall not be obligated to expend funds in excess of the
funds obligated. In no event shall Buyer decrease funds by an amount exceeding Seller’s
current applicable termination liability at the time of the decrease. An increase or
decrease in cost, schedule or delivery by Buyer will be subject to an equitable adjustment
in accordance with FAR 52.243-1 Changes—Fixed-Price (AUG 1987).
C. This clause is applicable only until such time as the funds obligated by Buyer equal the
prices established in the Purchase Order. When the Purchase Order becomes fully
funded, this clause shall be of no force and effect.
D. If a cost-reimbursement contract is contemplated, performance under this clause shall be
subject to the provisions of FAR 52.232-22 Limitation of Funds (APR 1984) and FAR
52.232-20 Limitation of Cost (APR 1984), which clauses shall then be made part of this
contract and be incorporated herein by reference.