48 CFR § 217.7404-4 - 217.7404-4 Limitations on obligations.

---
identifier: "/us/cfr/t48/s217.7404-4"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "48 CFR § 217.7404-4 - 217.7404-4   Limitations on obligations."
title_number: 48
title_name: "Federal Acquisition Regulations System"
section_number: "217.7404-4"
section_name: "217.7404-4   Limitations on obligations."
chapter_number: 2
chapter_name: "DEFENSE ACQUISITION REGULATIONS SYSTEM, DEPARTMENT OF DEFENSE"
subchapter_number: "C"
subchapter_name: "CONTRACTING METHODS AND CONTRACT TYPES"
part_number: "217"
part_name: "SPECIAL CONTRACTING METHODS"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "41 U.S.C. 1303 and 48 CFR chapter 1."
regulatory_source: "56 FR 36345, July 31, 1991, unless otherwise noted."
cfr_part: "217"
---


# 217.7404-4 217.7404-4   Limitations on obligations.

(a) The Government shall not obligate more than 50 percent of the not-to-exceed price before definitization. However, if a contractor submits a qualifying proposal before 50 percent of the not-to-exceed price has been obligated by the Government, then the limitation on obligations before definitization may be increased to no more than 75 percent (see 232.102-70 for coverage on provisional delivery payments).

(b) In determining the appropriate amount to obligate, the contracting officer shall assess the contractor's proposal for the undefinitized period and shall obligate funds only in an amount consistent with the contractor's requirements for the undefinitized period.

[60 FR 29498, June 5, 1995, as amended at 74 FR 37650, July 29, 2009]