§40111 Multiyear procurement contracts for services and related items

Summary

The FAA Administrator may sign contracts up to 5 years long for certain services and the supplies that go with them, even when the money would normally only be approved for one year. Covered work includes running and fixing facilities, keeping and changing aircraft or other complex equipment, specialized training (like pilots, aircrew, and foreign language), and base services such as ground maintenance, refueling, buses, and trash removal. The Administrator can only do this if the work will be needed throughout the contract, requires a large up-front investment or a big effort to build a skilled team, and is in the government’s best interest by encouraging competition and saving money. When setting costs, the government may only charge for the share of plant or equipment cost that matches the contract length compared to the item’s expected commercial life. The contract can include an option to renew for up to 3 years at a price that does not re-charge costs already written off. The FAA can also reserve the right to buy the equipment by paying any remaining unamortized cost. If no funds are provided for a later fiscal year, the contract must end. Costs to end it can come from the original contract funds, other available funds for that type of service, or money set aside to terminate contracts.