Which term defines a government contract for a service where something useful is received immediately upon expenditure of funds or by the end of the fiscal year, and the contract may cross fiscal years as long as it does not exceed 12 months?

Which term defines a government contract for a service where something useful is received immediately upon expenditure of funds or by the end of the fiscal year, and the contract may cross fiscal years as long as it does not exceed 12 months?

• A. Severable Services
• B. Non-Severable Service
• C. Time-and-Materials Contract
• D. General Services

Answer: (A)

Severable services contracts are used for work that can be delivered in separate, discrete increments that each provide usable value to the government. Because each increment yields something useful, funding and performance can be aligned with annual appropriations, and the contract can cross fiscal years as long as the performance in a given period doesn’t exceed 12 months. This setup fits a need that’s ongoing but divisible into portions, so you can get value even as fiscal years change. Non-severable services, by contrast, produce a single complete outcome and can’t be meaningfully divided into interim, independently useful parts, so they don’t fit the idea of getting usable value incrementally. Time-and-materials describes how payment is calculated (labor hours and materials) rather than whether the work is divisible into separate periods. General Services is a broad category rather than a specific contract type.

Severable services contracts are used for work that can be delivered in separate, discrete increments that each provide usable value to the government. Because each increment yields something useful, funding and performance can be aligned with annual appropriations, and the contract can cross fiscal years as long as the performance in a given period doesn’t exceed 12 months. This setup fits a need that’s ongoing but divisible into portions, so you can get value even as fiscal years change.

Non-severable services, by contrast, produce a single complete outcome and can’t be meaningfully divided into interim, independently useful parts, so they don’t fit the idea of getting usable value incrementally. Time-and-materials describes how payment is calculated (labor hours and materials) rather than whether the work is divisible into separate periods. General Services is a broad category rather than a specific contract type.