Period of Performance in Grants

The period of performance in a federal grant is the date range, specified in the Notice of Award, during which the recipient is authorized to incur costs, draw down federal funds, and carry out approved project activities, with costs incurred outside this period being unallowable.

What is the Period of Performance in Grants?

The period of performance (POP) is one of the most fundamental terms of a federal grant award. It is defined in the Notice of Award by a start date and an end date, and it establishes the time boundary within which all project work must occur and all allowable costs must be incurred. Costs incurred before the start date or after the end date are unallowable and must not be charged to the federal award, even if the costs are otherwise allowable in nature.

Under 2 CFR Part 200.309, a recipient may incur allowable pre-award costs (costs incurred before the official start date) only if the awarding agency has specifically authorized them in the Notice of Award or in the published program terms. Without this authorization, any costs incurred before the official start date are unallowable.

Recipients who cannot complete the project objectives within the authorized period of performance may request a no-cost extension (NCE), an extension of the end date without additional federal funds. Most agencies allow one NCE of up to 12 months if the recipient has made satisfactory progress and has unspent funds remaining. Second NCEs are generally discouraged and require specific justification.

At the end of the period of performance, the recipient must complete all project activities, submit final performance and financial reports, and draw down any remaining authorized costs. Unspent federal funds must be returned or used only within the authorized period.

Why the Period of Performance matters for government contractors

Grant recipients must plan project timelines carefully to ensure all work and associated costs fit within the authorized period. Starting work before the official start date (without prior approval), missing the end date, or incurring costs after closeout are among the most common grant audit findings.

Example

An SBIR Phase II grant runs from March 1, 2025 to February 28, 2027, a 24-month period of performance. The small business awardee incurs all project costs within this window, submitting biannual progress reports and drawing down funds through the agency's payment system. In December 2026, the principal investigator realizes the final deliverable, a validated prototype, will not be complete by February 28. The company requests a no-cost extension from the agency in January, which is approved, extending the period of performance to August 31, 2027 without additional funding.

Frequently Asked Questions

Can a grantee incur costs before the official start date?

Only if the agency has specifically authorized pre-award costs in the Notice of Award or program terms. Without this authorization, any costs incurred before the official start date are unallowable and must not be charged to the grant. Many agencies do not authorize pre-award costs.

What is a no-cost extension (NCE)?

A no-cost extension is an agency-approved extension of the period of performance end date without additional federal funding. It allows the recipient to complete project activities using unspent grant funds already on hand. NCEs are typically limited to one extension of up to 12 months and require a written request explaining the reason for the delay and confirming adequate remaining funds.

What happens to unspent grant funds at the end of the period of performance?

Recipients must liquidate all obligations and submit final financial reports within 120 days of the period of performance end date. Federal funds that were drawn down but not expended must be returned to the agency. Failure to timely liquidate and report can delay future awards and trigger audit findings.

Can project activities be split between a base period and option periods in grants?

Grants do not typically use option years the way procurement contracts do. Grant renewals are separate competitive or non-competitive continuation awards with their own Notices of Award, each establishing a new period of performance. Multi-year grants may have an overall authorized period of performance with annual budget periods.