§3903 — Title 41 Public Contracts | U.S. Code

Summary

Federal agencies may sign multiyear contracts to buy property or services that last more than one but not more than 5 program years. Before doing so, the agency must have money set aside and obligated either for the whole contract or at least for the first fiscal year, plus an estimate for ending the contract if needed. The agency must also decide it really needs the goods or services for the contract period and that a multiyear deal is best for the government by promoting competition or saving money. Every multiyear contract must say it will stop if no money is provided for a covered fiscal year, and money to pay for ending the contract must stay available until paid. If the contract allows a cancellation cost above $10,000,000, the agency must tell Congress in writing and wait 30 days before awarding it. The contract may make work after year one depend on future appropriations and may promise a cancellation payment if funds are not provided. This does not change other laws that allow multiyear contracts.

Title 41, §3903

Public Contracts — Source: USLM XML via OLRC

(a)In this section, a multiyear contract is a contract for the purchase of property or services for more than one, but not more than 5, program years.

(b)An executive agency may enter into a multiyear contract for the acquisition of property or services if—

(1)funds are available and obligated for the contract, for the full period of the contract or for the first fiscal year in which the contract is in effect, and for the estimated costs associated with a necessary termination of the contract; and

(2)the executive agency determines that—

(A)the need for the property or services is reasonably firm and continuing over the period of the contract; and

(B)a multiyear contract will serve the best interests of the Federal Government by encouraging full and open competition or promoting economy in administration, performance, and operation of the agency’s programs.

(c)A multiyear contract entered into under the authority of this section shall include a clause that provides that the contract shall be terminated if funds are not made available for the continuation of the contract in a fiscal year covered by the contract. Funds available for paying termination costs shall remain available for that purpose until the costs associated with termination of the contract are paid.

(d)Before a contract described in subsection (b) that contains a clause setting forth a cancellation ceiling in excess of $10,000,000 may be awarded, the executive agency shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to Congress. The contract may not be awarded until the end of the 30-day period beginning on the date of the notification.

(e)A multiyear contract may provide that performance under the contract after the first year of the contract is contingent on the appropriation of funds and (if the contract does so provide) that a cancellation payment shall be made to the contractor if the funds are not appropriated.

(f)This section does not modify or affect any other provision of law that authorizes multiyear contracts.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 3903(a)41:254c(d) (1st sentence).June 30, 1949, ch. 288, title III, § 304B, as added Pub. L. 103–355, title I, § 1072, Oct. 13, 1994, 108 Stat. 3270. 3903(b)41:254c(a). 3903(c)41:254c(b). 3903(d)41:254c(c). 3903(e)41:254c(d) (last sentence). 3903(f)41:254c(e).

§3903 Multiyear Contracts

Summary

Title 41, §3903

Notes & Related Subsidiaries

Historical and Revision Notes

Citations & Metadata