Period of Performance

The Period of Performance is the specific start and end dates in a federal contract that define when the contractor must perform the required work and when the government's acceptance obligations and contractor's cost-incurring authority are active.

What is the Period of Performance (POP)?

The Period of Performance (POP) is a fundamental contract term that specifies the dates during which the contractor is authorized to perform work, incur costs, and deliver products or services. Every federal contract includes an explicit POP in the Schedule (Section F - Deliveries or Performance).

Key POP concepts:

• Base period: The initial POP at contract award, typically one year for services contracts (aligned with fiscal year) or tied to a defined project timeline for fixed deliverable contracts.
• Option periods: Additional periods of performance that the government may exercise at its discretion, typically priced and structured at award but not yet funded or obligated.
• POP vs. period of availability of funds: The POP is a contract term; the period of availability is an appropriations law concept. These are related but not identical. O&M funds may be obligated only in their fiscal year but can fund a contract with a POP extending into the next fiscal year for severable services.
• POP extensions: When work cannot be completed within the original POP, the contracting officer may issue a modification extending the POP. Additional funding may or may not be required depending on the contract type and remaining funds.

POP expiration consequences:

• After the POP expires, the contractor generally has no authority to incur new costs or continue performance.
• Deliverables not completed by the POP end date may constitute a performance failure.
• Costs incurred after POP expiration without modification authority are generally not reimbursable.
• Some contracts include a "right to inspect" period after POP for quality verification, but no new work may be initiated.

Why POP matters for government contractors

Contractors must track POP end dates across all task orders and contracts and proactively alert program offices 60-90 days before POP expiration to ensure timely options are exercised or modifications are issued. Revenue recognition and financial planning depend on POP dates. Billing disputes frequently involve questions about whether work was performed and invoiced within the POP.

Example

A professional services firm holds a task order with a POP of October 1, 2025, through September 30, 2026. In July 2026, the work is approximately 75 percent complete and the program manager wants to extend the task order for six additional months to complete remaining deliverables. The contractor notifies the contracting officer in August 2026. The contracting officer must issue a modification extending the POP to March 31, 2027, and obligate FY2026 O&M funds for the extension (if within the expired period rules) or FY2027 O&M funds if those are available. Without the modification, the contractor cannot incur costs after September 30, 2026.

Frequently Asked Questions

Is the POP the same as the ordering period on an IDIQ contract?

No. An IDIQ contract has an ordering period (the window during which task orders may be placed) and each task order has its own POP for the specific work. The IDIQ's ordering period typically spans multiple years; individual task order POPs are typically shorter (one year for services, project-specific for delivery orders).

Can a contractor continue work after POP expiration without a modification?

No. Continuing work after POP expiration without a written modification extending the POP creates an unauthorized commitment. Costs incurred after POP expiration without modification authority are not reimbursable on cost-type contracts and may be disputed on fixed-price contracts. Contractors must obtain written authority before continuing performance.

What happens to unused funds if work is completed before the POP ends?

On cost-reimbursement contracts, unused obligated funds remain available for the government to deobligate or use for other purposes. The contractor is not entitled to unused funds simply because the POP has not expired; payment is for actual allowable costs incurred. On fixed-price contracts, the contractor earns the contract price upon completion of performance, regardless of when within the POP that occurs.

How do option period POPs relate to the base period POP?

Option periods are typically structured as consecutive periods, with the first option running immediately after the base period ends (October 1 of year two through September 30 of year three, for example). The government must exercise each option before the current period expires to maintain continuous coverage. Late option exercise may require a gap modification or result in a lapse of service.