In which circumstance can incremental funding be used for Fixed Price contracts?

Incremental funding can be applied to fixed-price contracts particularly in situations requiring severable services. Severable services are defined as services that can be performed over a period of time and can be separated into distinct parts or phases. This method allows funding to be allocated to specific portions of the contract over multiple periods, rather than needing full funding available upfront for the entire contract period.

Using incremental funding is particularly advantageous in severe service contracts because the government can manage its budget more effectively, allowing for the completion of phases as funds become available, ensuring that projects can advance without needing complete initial appropriations. This approach encourages flexibility in contract management and can facilitate the continuation of services when full funding isn't immediately accessible.

In contrast, the other options do not align with the principles governing incremental funding for fixed-price contracts. Contracts longer than one year may impose challenges but do not inherently allow or require incremental funding. Similarly, contracts that do not require appropriations would not apply here, as appropriations are crucial for funding in any contractual agreement. Lastly, a bonus structure, while it can enhance performance incentives within a contract, does not specifically relate to the concept of incremental funding, which focuses more on the timing and allocation of funds for services rendered rather than on potential performance incentives.