48 CFR 17.106-1 - General.

17.106-1 General.

(a)Method of contracting. The nature of the requirement should govern the selection of the method of contracting, since the multiyear procedure is compatible with sealed bidding, including two-step sealed bidding, and negotiation.

(b)Type of contract. Given the longer performance period associated with multiyear acquisition, consideration in pricing fixed-priced contracts should be given to the use of economic price adjustment terms and profit objectives commensurate with contractor risk and financing arrangements.

(c)Cancellation procedures.

(1) All program years except the first are subject to cancellation. For each program year subject to cancellation, the contracting officer shall establish a cancellation ceiling. Ceilings must exclude amounts for requirements included in prior program years. The contracting officer shall reduce the cancellation ceiling for each program year in direct proportion to the remaining requirements subject to cancellation. For example, consider that the total nonrecurring costs (see 15.408, Table 15-2, III. Formats for Submission of Line Item Summaries C(8)) are estimated at 10 percent of the total multiyear price, and the percentages for each of the program year requirements for 5 years are (i) 30 in the first year, (ii) 30 in the second, (iii) 20 in the third, (iv) 10 in the fourth, and (v) 10 in the fifth. The cancellation percentages, after deducting 3 percent for the first program year, would be 7, 4, 2, and 1 percent of the total price applicable to the second, third, fourth, and fifth program years, respectively.

(2) In determining cancellation ceilings, the contracting officer must estimate reasonable preproduction or startup, labor learning, and other nonrecurring costs to be incurred by an “average” prime contractor or subcontractor, which would be applicable to, and which normally would be amortized over, the items or services to be furnished under the multiyear requirements. Nonrecurring costs include such costs, where applicable, as plant or equipment relocation or rearrangement, special tooling and special test equipment, preproduction engineering, initial rework, initial spoilage, pilot runs, allocable portions of the costs of facilities to be acquired or established for the conduct of the work, costs incurred for the assembly, training, and transportation to and from the job site of a specialized work force, and unrealized labor learning. They shall not include any costs of labor or materials, or other expenses (except as indicated above), which might be incurred for performance of subsequent program year requirements. The total estimate of the above costs must then be compared with the best estimate of the contract cost to arrive at a reasonable percentage or dollar figure. To perform this calculation, the contracting officer should obtain in-house engineering cost estimates identifying the detailed recurring and nonrecurring costs, and the effect of labor learning.

(3) The contracting officer shall establish cancellation dates for each program year's requirements regarding production lead time and the date by which funding for these requirements can reasonably be established. The contracting officer shall include these dates in the schedule, as appropriate.

(d)Cancellation ceilings. Cancellation ceilings and dates may be revised after issuing the solicitation if necessary. In sealed bidding, the contracting officer shall change the ceiling by amending the solicitation before bid opening. In two-step sealed bidding, discussions conducted during the first step may indicate the need for revised ceilings and dates which may be incorporated in step two. In a negotiated acquisition, negotiations with offerors may provide information requiring a change in cancellation ceilings and dates before final negotiation and contract award.

(e)Payment of cancellation charges. If cancellation occurs, the Government's liability will be determined by the terms of the applicable contract.

(f)Presolicitation or pre-bid conferences. To ensure that all interested sources of supply are thoroughly aware of how multiyear contracting is accomplished, use of presolicitation or pre-bid conferences may be advisable.

(g)Payment limit. The contracting officer shall limit the Government's payment obligation to an amount available for contract performance. The contracting officer shall insert the amount for the first program year in the contract upon award and modify it for successive program years upon availability of funds.

(h)Termination payment. If the contract is terminated for the convenience of the Government in whole, including requirements subject to cancellation, the Government's obligation shall not exceed the amount specified in the Schedule as available for contract performance, plus the cancellation ceiling.

[ 61 FR 39204, July 26, 1996, as amended at 62 FR 51270, Sept. 30, 1997; 82 FR 4714, Jan. 13, 2017]

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code
U.S. Code: Title 10 - ARMED FORCES

§ 2301 - Repealed. Pub. L. 103–355, title I, § 1501(a), Oct. 13, 1994, 108 Stat. 3296]

§ 2302 - Definitions

§ 2302a - Simplified acquisition threshold

§ 2302b - Implementation of simplified acquisition procedures

§ 2302c - Repealed. Pub. L. 114–328, div. A, title VIII, § 833(b)(5)(A)(i), Dec. 23, 2016, 130 Stat. 2285]

§ 2302d - Major system: definitional threshold amounts

§ 2303 - Applicability of chapter

§ 2303a - Repealed. Pub. L. 98–577, title III, § 302(c)(1), Oct. 30, 1984, 98 Stat. 3077]

§ 2304 - Contracts: competition requirements

§ 2304a - Task and delivery order contracts: general authority

§ 2304b - Task order contracts: advisory and assistance services

§ 2304c - Task and delivery order contracts: orders

§ 2304d - Task and delivery order contracts: definitions

§ 2304e - Contracts: prohibition on competition between Department of Defense and small businesses and certain other entities

§ 2305 - Contracts: planning, solicitation, evaluation, and award procedures

§ 2305a - Design-build selection procedures

§ 2306 - Kinds of contracts

§ 2306a - Cost or pricing data: truth in negotiations

§ 2306b - Multiyear contracts: acquisition of property

§ 2306c - Multiyear contracts: acquisition of services

§ 2307 - Contract financing

§ 2308 - Buy-to-budget acquisition: end items

§ 2309 - Allocation of appropriations

§ 2310 - Determinations and decisions

§ 2311 - Assignment and delegation of procurement functions and responsibilities

§ 2312 - Remission of liquidated damages

§ 2313 - Examination of records of contractor

§ 2313a - Defense Contract Audit Agency: annual report

§ 2314 - Laws inapplicable to agencies named in section 2303 of this title

§ 2315 - Law inapplicable to the procurement of automatic data processing equipment and services for certain defense purposes

§ 2316 - Disclosure of identity of contractor

§ 2317 - Repealed. Pub. L. 103–160, div. A, title VIII, § 821(a)(2), Nov. 30, 1993, 107 Stat. 1704]

§ 2318 - Advocates for competition

§ 2319 - Encouragement of new competitors

§ 2320 - Rights in technical data

§ 2321 - Validation of proprietary data restrictions

§ 2322 - Repealed. Pub. L. 102–484, div. A, title X, § 1052(25)(A), Oct. 23, 1992, 106 Stat. 2500]

§ 2323 - Contract goal for small disadvantaged businesses and certain institutions of higher education

§ 2323a - Credit for Indian contracting in meeting certain subcontracting goals for small disadvantaged businesses and certain institutions of higher education

§ 2324 - Allowable costs under defense contracts

§ 2325 - Restructuring costs

§ 2326 - Undefinitized contractual actions: restrictions

§ 2327 - Contracts: consideration of national security objectives

§ 2328 - Release of technical data under Freedom of Information Act: recovery of costs

§ 2329 - Repealed. Pub. L. 103–355, title I, § 1506(a), Oct. 13, 1994, 108 Stat. 3298]

§ 2330 - Procurement of contract services: management structure

§ 2330a - Procurement of services: tracking of purchases

§ 2331 - Procurement of services: contracts for professional and technical services

§ 2332 - Share-in-savings contracts

§ 2333 - Joint policies on requirements definition, contingency program management, and contingency contracting

§ 2334 - Independent cost estimation and cost analysis

§ 2335 - Prohibition on collection of political information

§ 2336 - Renumbered § 2679]

§ 2337 - Life-cycle management and product support


Title 48 published on 20-Nov-2017 05:26

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 48 CFR Part 17 after this date.

  • 2017-11-08; vol. 82 # 215 - Wednesday, November 8, 2017
    1. 82 FR 51774 - Federal Acquisition Regulation; Removal of Fair Pay and Safe Workplaces Rule Republication
      GPO FDSys XML | Text
      Final rule.
        Effective date: November 6, 2017. Applicability dates: See section I.F of the Supplementary Information.
      48 CFR Parts 1, 4, 9, 17, 22, 42, and 52
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