Stewardship and Compliance
for Stanford PIs

Suggested Language for
Limitation of Funds (LOF)/
Limitation of Costs (LOC)


The explanation of LOF/LOC requirements is found in Fiscal Responsibilities of Principal Investitators, section 3, "Special requirements related to sponsor notifications." Failure to provide such notice may preclude Stanford from receiving additional funding on that contract.

Note that this requirement applies to all federal contracts, including subcontracts on which a federal agency is the prime.

Sample notification letter

A notification letter based on this template should be addressed to the Contracting Officer with copy to the Program Manager. It should be signed by the Principal Investigator, and co-signed by the cognizant person in the Office of Sponsored Research (OSR).

Bear in mind that the 60 day period recommended in the clause can be varied from 30-90 days, and the 75% can be varied from 75-85%. In addition it is important to remember that the government is not obligated ro reimburse a contractor for any funds expended beyond the contractually allotted amount, and neither is the contractor obligated to continue the work if the allotted funds have been consumed. It is therefore very important to notify the sponsor in a timely fashion when the next funding increment must be received.

Reference: Contract........

In accordance with FAR52.232-22 Limitation of Funds, we wish to notify you that by [date] we will have spent $[amount] which represents xx% of the currently allotted funds.

Please modify the contract to increase the incremental funding by $[amount]as soon as possible. We expect that these funds will support the project through approximately [date].

We appreciate your support of this project and thank you for your attention to our request.


Questions on this requirement should be directed to your OSR Contract Officer.

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