What the funding burn-rate calculator does
The calculator compares a governing funded or estimated-cost amount with incurred cost, known commitments and forecast weekly cost. It projects the date the selected notice threshold will be reached, tests expected cost during the notice window and estimates the date the available amount will be exhausted.
It is an internal planning aid. It does not determine which clause applies, interpret an executed contract, prepare a contractual notice or replace the accounting records used to establish incurred and expected cost.
Use total applicable cost—not approved labor alone
Approved labor can be an important and timely input, but the applicable FAR calculation can require previously incurred cost plus cost expected during the notice period. Depending on the contract and accounting method, that can include direct labor, indirect cost, materials, travel, subcontracts, other direct cost, accruals and known commitments.
Enter commitments only when they are not already included in incurred cost or the forward weekly forecast. Otherwise the tool will double count them. If the only reliable information available is labor, label the result as a labor-only planning view and do not treat it as the formal contract position.
How the notice-window test is calculated
Cost exposure equals incurred cost plus known commitments entered separately. Projected cost at the end of the notice window equals that exposure plus forecast weekly cost multiplied by notice days divided by seven. The projected amount is then compared with the selected percentage of the governing amount.
The standard text of FAR 52.232-20 and FAR 52.232-22 uses a 75 percent threshold and a 60-day period, but the clause permits those values to vary. Always enter the percentage and number of days in the executed contract rather than assuming the defaults apply.
- Cost exposure = incurred cost + commitments not included elsewhere
- Notice threshold amount = governing amount × selected threshold percentage
- Projected cost in notice window = cost exposure + weekly forecast × notice days ÷ 7
- Runway weeks = remaining amount ÷ forecast weekly cost
Worked funding example
Assume $750,000 is currently applicable, incurred cost is $482,000, known commitments outside the run rate are $35,000 and forecast cost is $38,500 per week. Cost exposure is therefore $517,000 and the 75 percent threshold is $562,500.
The threshold is approximately 1.2 weeks away, but expected cost during a 60-day notice window is about $847,000. That result calls for immediate contract-owner review because the forward-looking notice test is already above the selected threshold even though current recorded exposure is below it. Remaining funding after the commitments is $233,000, or roughly 6.1 weeks at the assumed burn rate.
How to use the result in a weekly review
Reconcile the governing amount to executed modifications, refresh incurred and committed costs, update the forward staffing and non-labor forecast, and investigate missing or unapproved transactions. Run the forecast at the contract, task, CLIN or funding-increment level required by the contract and management process.
If the result crosses an internal or contractual trigger, route it to the authorized contracts, finance and program owners. A dashboard alert or calculator result is not the written notice required by the contract. Retain the supporting analysis, decision, notice and Government response.
Frequently asked questions
What amount should I enter as the funding or cost limit?
Use the amount controlled by the applicable clause and executed contract documents. That may be estimated cost, the amount currently allotted, a ceiling price or a lower-level task or CLIN amount. Do not substitute total contract value without confirming it is the relevant limit.
Should fee or profit be included?
The standard Limitation of Cost and Limitation of Funds clauses refer to estimated cost or allotted amounts and contain specific treatment of fee and cost sharing. Use the language in the actual contract and qualified advice rather than adding fee automatically.
What should the weekly forecast contain?
Include the total applicable forward cost expected each week under the chosen contract measure. Account for planned labor, indirect cost, materials, subcontracts, travel and other expected cost without duplicating separate commitments.
Does a projected threshold crossing automatically send a notice?
No. The result is an internal planning signal. The authorized contract owner must verify the clause, data, revised estimate, addressee, timing and delivery requirements before preparing and sending any formal notice.
Primary sources
Review the executed contract and current official guidance before using a result for a compliance, accounting or contractual decision.