§114 — Title 38 Veterans' Benefits | U.S. Code

Summary

The Secretary can agree to buy supplies or services under a single contract that lasts more than one year if certain things are true. The Secretary must have enough money to cover obligations for the current fiscal year and any estimated cancellation cost. The contract must save money, cut overhead, improve contractor performance, or help competition. There must be a steady need for the items or services, no big expected changes in quantity or delivery rate, and stable specifications. The contractor’s performance risk must not be too high. The contract must not block small businesses from competing. For a drug whose patent expired less than four years before offers are requested, there must be no real chance that new generic competition will grow during the contract period. If full funding for the whole contract is not available when it is signed, the contract must say later-year payments depend on available appropriations and must allow payment of reasonable cancellation charges for one-time, unrecovered costs if the contract is canceled. If the Secretary later decides funds are insufficient because of other program needs, the Secretary must cancel under those terms. Cancellation costs are paid from the original appropriation or, if that is not enough, from other funds used for the same purpose. The Secretary must write rules to carry this out. Definitions: "appropriations" — as defined in 31 U.S.C. 1511; "multiyear contract" — a contract that goes beyond the current fiscal year but not past the end of the fourth following fiscal year (not for construction or real property leases); "nonrecurring, unrecovered costs" — one-time costs the contractor reasonably incurred and has not recovered.

Title 38, §114

Veterans' Benefits — Source: USLM XML via OLRC

(a)The Secretary may enter into a multiyear contract for the procurement of supplies or services if the Secretary makes each of the following determinations:

(1)Appropriations are available for obligations that are necessary for total payments that would be required during the fiscal year in which the contract is entered into, plus the estimated amount of any cancellation charge payable under the contract.

(2)The contract is in the best interest of the United States by reason of the effect that use of a multiyear, rather than one-year, contract would have in—

(A)reducing costs;

(B)achieving economies in contract administration or in any other Department activities;

(C)increasing quality of performance by or service from the contractors; or

(D)encouraging effective competition.

(3)During the proposed contract period—

(A)there will be a continuing or recurring need for the supplies or services being procured;

(B)there is not a substantial likelihood of substantial changes in the need for such supplies or services in terms of the total quantity of such supplies or services or of the rate of delivery of such supplies or services; and

(C)the specifications for the supplies or services are expected to be reasonably stable.

(4)The risks relating to the prospective contractor’s ability to perform in accordance with the specifications and other terms of the contract are not excessive.

(5)The use of a multiyear contract will not inhibit small business concerns in competing for the contract.

(6)In the case of the procurement of a pharmaceutical item for which a patent has expired less than four years before the date on which the solicitation of offers is issued, there is no substantial likelihood that increased competition among potential contractors would occur during the term of the contract as the result of the availability of generic equivalents increasing during the term of the contract.

(b)(1)A multiyear contract authorized by this section shall contain—

(A)a provision that the obligation of the United States under the contract during any fiscal year which is included in the contract period and is subsequent to the fiscal year during which the contract is entered into is contingent on the availability of sufficient appropriations (as determined by the Secretary pursuant to paragraph (2)(A) of this subsection) if, at the time the contract is entered into, appropriations are not available to cover the total estimated payments that will be required during the full term of the contract; and

(B)notwithstanding section 1502(a) of title 31, a provision for the payment of reasonable cancellation charges to compensate the contractor for nonrecurring, unrecovered costs, if any, if the performance is cancelled pursuant to the provision required by subparagraph (A) of this paragraph.

(2)(A)If, during a fiscal year after the fiscal year during which a multiyear contract is entered into under this section, the Secretary determines that, in light of other funding needs involved in the operation of Department programs, the amount of funds appropriated for such subsequent fiscal year is not sufficient for such contract, the Secretary shall cancel such contract pursuant to the provisions required by paragraph (1)(A) of this subsection.

(B)Cancellation charges under a multiyear contract shall be paid from the appropriated funds which were originally available for performance of the contract or the payment of cancellation costs unless such funds are not available in an amount sufficient to pay the entire amount of the cancellation charges payable under the contract. In a case in which such funds are not available in such amount, funds available for the procurement of supplies and services for use for the same purposes as the supplies or services procured through such contract shall be used to the extent necessary to pay such cost.

(c)Nothing in this section shall be construed so as to restrict the Secretary’s exercise of the right to terminate for convenience a contract under any other provision of law which authorizes multiyear contracting.

(d)The Secretary shall prescribe regulations for the implementation of this section.

(e)For the purposes of this section:

(1)The term “appropriations” has the meaning given that term in section 1511 of title 31.

(2)The term “multiyear contract” means a contract which by its terms is to remain in effect for a period which extends beyond the end of the fiscal year during which the contract is entered into but not beyond the end of the fourth fiscal year following such fiscal year. Such term does not include a contract for construction or for a lease of real property.

(3)The term “nonrecurring, unrecovered costs” means those costs reasonably incurred by the contractor in performing a multiyear contract which (as determined under regulations prescribed under subsection (d) of this section) are generally incurred on a one-time basis.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1991—Subsec. (a). Pub. L. 102–83, § 4(b)(1), (2)(E), substituted “Secretary” for “Administrator” in two places in introductory provisions. Subsec. (a)(2)(B). Pub. L. 102–83, § 4(a)(3), (4), substituted “Department” for “Veterans’ Administration”. Subsec. (b)(1)(A). Pub. L. 102–83, § 4(b)(1), (2)(E), substituted “Secretary” for “Administrator”. Subsec. (b)(2)(A). Pub. L. 102–83, § 4(b)(1), (2)(E), substituted “Secretary” for “Administrator” in two places. Pub. L. 102–83, § 4(a)(3), (4), substituted “Department” for “Veterans’ Administration”. Subsec. (c). Pub. L. 102–83, § 4(b)(1), (2)(E), substituted “Secretary’s” for “Administrator’s”. Subsec. (d). Pub. L. 102–83, § 4(b)(1), (2)(E), substituted “Secretary” for “Administrator”. 1989—Pub. L. 101–237, § 601(b)(1), struck out “for certain medical items” after “Multiyear procurement” in section catchline. Subsec. (a). Pub. L. 101–237, § 601(a)(1), struck out “for use in Veterans’ Administration health-care facilities” after “supplies or services”. Subsec. (b)(2)(A). Pub. L. 101–237, § 601(a)(2), struck out “health-care” before “programs, the amount”. Subsec. (e)(2) to (4). Pub. L. 101–237, § 601(a)(3), redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which read as follows: “The term ‘cancel’ or ‘cancellation’ refers to the termination of a contract by the Administrator as required under paragraph (2)(B)(i) of this subsection.”

§114 Multiyear Procurement

Summary

Title 38, §114

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata