§40112 — Title 49 Transportation | U.S. Code

Summary

The FAA Administrator may enter into purchase contracts that run more than one year but no longer than five fiscal years to buy equipment or parts. These contracts cannot be for building, changing, or doing major repairs on land or buildings. Before using a multiyear contract, the Administrator must find that it will make the airspace system safer or more efficient and cut total costs; that the agency’s need for the items will stay about the same in production rate and quantity; that there is a good chance Congress will provide the money needed so the contract won’t be canceled; that the item’s design is stable and not too risky; and that the cost estimates and expected savings are realistic. The FAA must write rules for how to use these contracts efficiently and may include cancellation terms that cover contractor costs. The rules should encourage using subcontractors and paying them quickly, while still keeping competition and the agency’s right to end poor-performing prime contracts. These contracts can pay in advance for parts or materials, can make later years’ work depend on yearly funding from Congress, and can let the agency change how many items are ordered. If a contract depends on future funding, it can include a cancellation payment if money is not provided. For any contract with a cancellation ceiling over $100,000,000, the Administrator must notify two congressional committees in writing and wait 30 days before awarding it. If money is not provided for a later year, the contract must end, and the cost to close it can be paid from the original contract money, other available funds for that type of purchase, or funds set aside to end contracts.

Title 49, §40112

Transportation — Source: USLM XML via OLRC

(a)Notwithstanding section 1341(a)(1)(B) of title 31 and to the extent that amounts otherwise are available for obligation, the Administrator of the Federal Aviation Administration may make a contract of more than one but not more than 5 fiscal years to purchase property, except a contract to construct, alter, or make a major repair or improvement to real property.

(b)The Administrator may make a contract under this section if the Administrator finds that—

(1)the contract will promote the safety or efficiency of the national airspace system and will result in reduced total contract costs;

(2)the minimum need for the property to be purchased is expected to remain substantially unchanged during the proposed contract period in terms of production rate, procurement rate, and total quantities;

(3)there is a reasonable expectation that throughout the proposed contract period the Administrator will request appropriations for the contract at the level required to avoid cancellation;

(4)there is a stable design for the property to be acquired and the technical risks associated with the property are not excessive; and

(5)the estimates of the contract costs and the anticipated savings from the contract are realistic.

(c)The Administrator shall prescribe regulations for acquiring property under this section to promote the use of contracts under this section in a way that will allow the most efficient use of those contracts. The regulations may provide for a cancellation provision in the contract to the extent the provision is necessary and in the best interest of the United States. The provision may include consideration of recurring and nonrecurring costs of the contractor associated with producing the item to be delivered under the contract. The regulations shall provide that, to the extent practicable—

(1)to broaden the aviation industrial base—

(A)a contract under this section shall be used to seek, retain, and promote the use under that contract of subcontractors, vendors, or suppliers; and

(B)on accrual of a payment or other benefit accruing on a contract under this section to a subcontractor, vendor, or supplier participating in the contract, the payment or benefit shall be delivered in the most expeditious way practicable; and

(2)this section and regulations prescribed under this section may not be carried out in a way that precludes or curtails the existing ability of the Administrator to provide for—

(A)competition in producing items to be delivered under a contract under this section; or

(B)ending a prime contract when performance is deficient with respect to cost, quality, or schedule.

(d)(1)A contract under this section may—

(A)be used for the advance procurement of components, parts, and material necessary to manufacture equipment to be used in the national airspace system;

(B)provide that performance under the contract after the first year is subject to amounts being appropriated; and

(C)contain a negotiated priced option for varying the number of end items to be procured over the period of the contract.

(2)If feasible and practicable, an advance procurement contract may be made to achieve economic-lot purchases and more efficient production rates.

(e)(1)If a contract under this section provides that performance is subject to an appropriation being made, it also may provide for a cancellation payment to be made to the contractor if the appropriation is not made.

(2)Before awarding a contract under this section containing a cancellation ceiling of more than $100,000,000, the Administrator shall give written notice of the proposed contract and cancellation ceiling to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives. The contract may not be awarded until the end of the 30-day period beginning on the date of the notice.

(f)A contract made under this section shall be ended if amounts are not made available to continue the contract into a subsequent fiscal year. The cost of ending the contract may be paid from—

(1)an appropriation originally available for carrying out the contract;

(2)an appropriation currently available for procuring the type of property concerned and not otherwise obligated; or

(3)amounts appropriated for payments to end the contract.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 40112(a)49 App.:1344(f)(1) (words before 4th comma), (6), (7) (1st sentence).Aug. 23, 1958, Pub. L. 85–726, § 303(f), 72 Stat. 747; May 21, 1970, Pub. L. 91–258, § 51(a)(1), 84 Stat. 234; July 12, 1976, Pub. L. 94–353, § 16, 90 Stat. 882; Oct. 19, 1980, Pub. L. 96–470, § 112(e), 94 Stat. 2240; Jan. 12, 1983, Pub. L. 97–449, § 7(b), 96 Stat. 2444; restated Nov. 5, 1990, Pub. L. 101–508, § 9118(a), 104 Stat. 1388–367. 40112(b)49 App.:1344(f)(1) (words after 4th comma). 40112(c)49 App.:1344(f)(2). 40112(d) (1)(A)49 App.:1344(f)(4) (words before 3d comma). 40112(d) (1)(B)49 App.:1344(f)(7) (last sentence words before “and (if”). 40112(d) (1)(C)49 App.:1344(f)(8). 40112(d)(2)49 App.:1344(f)(4) (words after 3d comma). 40112(e)(1)49 App.:1344(f)(7) (last sentence words after “of funds”). 40112(e)(2)49 App.:1344(f)(3). 40112(f)49 App.:1344(f)(5). In this section, the word “Administrator” in section 303(f) of the Federal Aviation Act of 1958 (Public Law 85–726, 72 Stat. 747) is retained on authority of 49:106(g). In subsection (a), the reference in 49 App.:1344(f)(7) to a contract for the purchase of services is omitted as surplus because 49 App.:1344(f)(1) states that the subsection is concerned only with contracts for the purchase of property. In subsection (b)(5), the word “savings” is substituted for “cost avoidance” for clarity. In subsection (c), before clause (1), the word “both” is omitted as surplus. In clause (1)(A), the words “in such a manner as” and “companies that are” are omitted as surplus. In clause (1)(B), the words “accruing on” are substituted for “under” for clarity. The words “subcontractor” and “contract” are substituted for “subcontract” and “contractor”, respectively, to correct errors in the source provisions being restated. In subsection (d)(1)(B), the words “after the first year” are substituted for “during the second and subsequent years of the contract” to eliminate unnecessary words. In subsection (e)(2), the words “a clause setting forth” are omitted as surplus. In subsection (f), the words “canceled or” and “cancellation or” are omitted as being included in “ended” and “ending”, respectively.

Editorial Notes

Amendments

1996—Subsec. (a). Pub. L. 104–106 struck out “or a contract to purchase property to which section 111 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 759) applies” after “improvement to real property”. Subsec. (e)(2). Pub. L. 104–287 substituted “Transportation and Infrastructure” for “Public Works and Transportation”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1996 AmendmentAmendment by Pub. L. 104–106 effective 180 days after Feb. 10, 1996, see section 5701 of Pub. L. 104–106, Feb. 10, 1996, 110 Stat. 702.

§40112 Multiyear Procurement Contracts for Property