Question

If a contract modification exceeds the general scope of the original contract (for example, by increasing the quantity of items to be delivered), does the modification amount to a new obligation and is chargeable to funds current at the time the modification is made?

1) True
2) False

Answer 1

It is generally true that a contract modification that exceeds the scope of the original contract results in a new obligation that is chargeable to funds that are current at the time of the modification.

Step-by-step explanation:

If a contract modification exceeds the general scope of the original contract, such as by increasing the quantity of items to be delivered, then it often results in the formation of a new obligation. It is generally true that this new obligation is chargeable to funds that are current at the time the modification is made. This approach aligns with the principles of fiscal law that prevent obligating funds from a fiscal year that is different from when the new obligation is incurred. Each modification needs to be evaluated based on the specific terms of the contract and applicable laws to determine if it represents a new obligation.