[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR17.103]



[Page 329]

 

            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 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]