[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR17.103]

[Page 318-319]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 17_SPECIAL CONTRACTING METHODS--Table of Contents
 
                   Subpart 17.1_Multiyear Contracting
 
Sec.  17.103  Definitions.

    As used in this subpart--
    Cancellation means the cancellation (within a contractually 
specified time) of the total requirements of all remaining program 
years. Cancellation results when the contracting officer
    (1) Notifies the contractor of nonavailability of funds for contract 
performance for any subsequent program year, or
    (2) Fails to notify the contractor that funds are available for 
performance of

[[Page 319]]

the succeeding program year requirement.
    Cancellation ceiling means the maximum cancellation charge that the 
contractor can receive in the event of cancellation.
    Cancellation charge means the amount of unrecovered costs which 
would have been recouped through amortization over the full term of the 
contract, including the term canceled.
    Multiyear contract means a contract for the purchase of supplies or 
services for more than 1, but not more than 5, program years. A 
multiyear contract may provide that performance under the contract 
during the second and subsequent years of the contract is contingent 
upon the appropriation of funds, and (if it does so provide) may provide 
for a cancellation payment to be made to the contractor if 
appropriations are not made. The key distinguishing difference between 
multiyear contracts and multiple year contracts is that multiyear 
contracts, defined in the statutes cited at 17.101, buy more than 1 
year's requirement (of a product or service) without establishing and 
having to exercise an option for each program year after the first.
    Nonrecurring costs means those costs which are generally incurred on 
a one-time basis and include such costs as plant or equipment 
relocation, plant rearrangement, special tooling and special test 
equipment, preproduction engineering, initial spoilage and rework, and 
specialized work force training.
    Recurring costs means costs that vary with the quantity being 
produced, such as labor and materials.

[48 FR 42231, Sept. 19, 1983, as amended at 66 FR 2129, Jan. 10, 2001; 
67 FR 43514, June 27, 2002]