41 U.S.C. § 3903 : Public Contracts — Federal Procurement Policy — Specific Types Of Contracts — Procurement — Multiyear Contracts

(a) Definition.— 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) Authority To Enter Into Contract.—

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) Termination Clause.— 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) Cancellation Ceiling Notice.— 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) Contingency Clause for Appropriation of Funds.— 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) Other Law Not Affected.— This section does not modify or affect any other provision of law that authorizes multiyear contracts.

(Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3774.)

Historical and Revision Notes
Revised Section	Source (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).