LOF

Limitation of Funds is a contract clause used in incrementally funded contracts establishing the amount of funds allotted and the government's liability limitation. LOF provisions clarify that government obligation does not exceed allotted amounts.

LOF clauses protect the government from liability exceeding appropriated funds while allowing work to proceed with available funding. Understanding LOF requirements helps contractors manage cash flow and staffing for incrementally funded contracts. LOF notifications are required as costs approach allotted amounts.