Difference Between Severable And Non-severable Services
Is there a difference in how severable and non-severable services are treated under the Economy Act?
- Sector-1, Noida
No. Because of the Economy Act’s deobligation requirement, whether the service is severable or non-severable, the funds must be obligated by the servicing agency by the end of the funds’ period of availability or the requesting agency must deobligate the funds (if funds were advanced to the servicing agency, the funds must be returned). This means that either all work must be completed by the end of the period of availability if the work is being done “in-house,” or the funds must be properly obligated on a contract before the end of the funds’ period of availability. If all of the funds will be obligated by the servicing agency on a contract procured on behalf of the requesting agency, then there is no problem if the servicing agency executes a contract before the end of the period of availability of the funds and either: -the contract is for non-severable services; or - the services are severable and the contract (excluding option years) is no longer than one calendar year.
Answered on 28 Sep 2018
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