[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: 48CFR17.106-3]



[Page 332-333]

 

            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. 17.106-3  Special procedures applicable to DoD, NASA, and the Coast Guard.



    (a) Participation by subcontractors, suppliers, and vendors. In 

order to broaden the defense industrial base, to the maximum extent 

practicable--

    (1) Multiyear contracting shall be used in such a manner as to seek, 

retain, and promote the use under such contracts of companies that are 

subcontractors, suppliers, and vendors; and

    (2) Upon accrual of any payment or other benefit under such a 

multiyear contract to any subcontractor, supplier, or vendor company 

participating in such contract, such payment or benefit shall be 

delivered to such company in the most expeditious manner practicable.

    (b) Protection of existing authority. To the extent practicable, 

multiyear contracting shall not be carried out in a manner to preclude 

or curtail the existing ability of the Department or agency to provide 

for termination of a prime contract, the performance of which is 

deficient with respect to cost, quality, or schedule.

    (c) Cancellation or termination for insufficient funding. In the 

event funds are not made available for the continuation of a multiyear 

contract awarded using the procedures in this section, the contract 

shall be canceled or terminated.

    (d) Contracts awarded under the multiyear procedure shall be firm-

fixed-price, fixed-price with economic price adjustment, or fixed-price 

incentive.

    (e) Recurring costs in cancellation ceiling. The inclusion of 

recurring costs in cancellation ceilings is an exception to normal 

contract financing arrangements and requires approval by the agency 

head.

    (f) Annual and multiyear proposals. Obtaining both annual and 

multiyear offers provides reduced lead time for making an annual award 

in the event that the multiyear award is not in the Government's 

interest. Obtaining both



[[Page 333]]



also provides a basis for the computation of savings and other benefits. 

However, the preparation and evaluation of dual offers may increase 

administrative costs and workload for both offerors and the Government, 

especially for large or complex acquisitions. The head of a contracting 

activity may authorize the use of a solicitation requesting only 

multiyear prices, provided it is found that such a solicitation is in 

the Government's interest, and that dual proposals are not necessary to 

meet the objectives in 17.105-2.

    (g) Level unit prices. Multiyear contract procedures provide for the 

amortization of certain costs over the entire contract quantity 

resulting in identical (level) unit prices (except when the economic 

price adjustment terms apply) for all items or services under the 

multiyear contract. If level unit pricing is not in the Government's 

interest, the head of a contracting activity may approve the use of 

variable unit prices, provided that for competitive proposals there is a 

valid method of evaluation.