(i) Step One: Draft a "Limitation of Price and Contractor Obligation" SCR.

Suggested language is as follows:

Paragraph (a): Funds available for performance are described in the Schedule. The amount of funds available for award is not considered sufficient for the performance required for any program year other than the first program year. When additional funds are available for the full requirements of the next succeeding program year, the Contracting Officer shall, not later than the date specified in the Schedule (unless a later date is agreed to), so notify the Contractor in writing. The Contracting Officer will also modify the contract to reflect the amount of funds specified in the Schedule as available for contract performance.

Paragraph (b): The Government is not obligated to the Contractor for any amount over that described in the Schedule as available for contract performance.

Paragraph (c): The Contractor is not obligated to incur costs for the performance required for any program year after the first unless and until written notification is received from the Contracting Officer of an increase in availability of funds. If so notified, the Contractor's obligation will increase only to the extent contract performance is required for the additional program year for which funds are made available.

Paragraph (d): If this contract is terminated under the "Termination for Convenience of the Government" clause, 'total contract price' in that clause means the amount available for performance of this contract, as in paragraph (a) above, plus the amount established as the cancellation ceiling. 'Work under the contract' in that clause means the work under program year requirements for which funds have been made available. If the contract is terminated for default, the Government's rights under this contract will apply to the entire multi-year requirements.

Paragraph (e): Notification to the Contractor of an increase or decrease in the funds available for performance of this contract under another clause (e.g., an "Option" or "Changes" clause) will not constitute the notification contemplated by paragraph (a) of this clause.