2018 US Code
Title 10 - Armed Forces
Subtitle A - General Military Law
Part IV - Service, Supply, and Procurement
Chapter 137 - Procurement Generally
Sec. 2306b - Multiyear contracts: acquisition of property

(a) In General.—To the extent that funds are otherwise available for obligation, the head of an agency may enter into multiyear contracts for the purchase of property whenever the head of that agency finds each of the following:

(b) Regulations.—(1) Each official named in paragraph (2) shall prescribe acquisition regulations for the agency or agencies under the jurisdiction of such official to promote the use of multiyear contracting as authorized by subsection (a) in a manner that will allow the most efficient use of multiyear contracting.

(2)(A) The Secretary of Defense shall prescribe the regulations applicable to the Department of Defense.

(B) The Secretary of Homeland Security shall prescribe the regulations applicable to the Coast Guard, except that the regulations prescribed by the Secretary of Defense shall apply to the Coast Guard when it is operating as a service in the Navy.

(C) The Administrator of the National Aeronautics and Space Administration shall prescribe the regulations applicable to the National Aeronautics and Space Administration.

(c) Contract Cancellations.—The regulations may provide for cancellation provisions in multiyear contracts to the extent that such provisions are necessary and in the best interests of the United States. The cancellation provisions may include consideration of both recurring and nonrecurring costs of the contractor associated with the production of the items to be delivered under the contract.

(d) Participation by Subcontractors, Vendors, and Suppliers.—In order to broaden the defense industrial base, the regulations shall provide that, to the extent practicable—

(e) Protection of Existing Authority.—The regulations shall provide that, to the extent practicable, the administration of this section, and of the regulations prescribed under this section, shall not be carried out in a manner to preclude or curtail the existing ability of an agency—

(f) Cancellation or Termination for Insufficient Funding.—In the event funds are not made available for the continuation of a contract made under this section into a subsequent fiscal year, the contract shall be canceled or terminated. The costs of cancellation or termination may be paid from—

(g) Contract Cancellation Ceilings Exceeding $100,000,000.—(1) Before any contract described in subsection (a) that contains a clause setting forth a cancellation ceiling in excess of $100,000,000 may be awarded, the head of the agency concerned shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the congressional defense committees, and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification.

(2) In the case of a contract described in subsection (a) with a cancellation ceiling described in paragraph (1), if the budget for the contract does not include proposed funding for the costs of contract cancellation up to the cancellation ceiling established in the contract, the head of the agency concerned shall, as part of the certification required by subsection (i)(1)(A),¹ give written notification to the congressional defense committees of—

(h) Defense Acquisitions of Weapon Systems.—In the case of the Department of Defense, the authority under subsection (a) includes authority to enter into the following multiyear contracts in accordance with this section:

(i) Defense Acquisitions Specifically Authorized by Law.—(1) In the case of the Department of Defense, a multiyear contract in an amount equal to or greater than $500,000,000 may not be entered into under this section unless the contract is specifically authorized by law in an Act other than an appropriations Act.

(2) In submitting a request for a specific authorization by law to carry out a defense acquisition program using multiyear contract authority under this section, the Secretary of Defense shall include in the request the following:

(3) A multiyear contract may not be entered into under this section for a defense acquisition program that has been specifically authorized by law to be carried out using multiyear contract authority unless the Secretary of Defense certifies in writing, not later than 30 days before entry into the contract, that each of the following conditions is satisfied:

(4) If for any fiscal year a multiyear contract to be entered into under this section is authorized by law for a particular procurement program and that authorization is subject to certain conditions established by law (including a condition as to cost savings to be achieved under the multiyear contract in comparison to specified other contracts) and if it appears (after negotiations with contractors) that such savings cannot be achieved, but that significant savings could nevertheless be achieved through the use of a multiyear contract rather than specified other contracts, the President may submit to Congress a request for relief from the specified cost savings that must be achieved through multiyear contracting for that program. Any such request by the President shall include details about the request for a multiyear contract, including details about the negotiated contract terms and conditions.

(5)(A) The Secretary may obligate funds for procurement of an end item under a multiyear contract for the purchase of property only for procurement of a complete and usable end item.

(B) The Secretary may obligate funds appropriated for any fiscal year for advance procurement under a contract for the purchase of property only for the procurement of those long-lead items necessary in order to meet a planned delivery schedule for complete major end items that are programmed under the contract to be acquired with funds appropriated for a subsequent fiscal year (including an economic order quantity of such long-lead items when authorized by law).

(6) The Secretary may make the certification under paragraph (3) notwithstanding the fact that one or more of the conditions of such certification are not met, if the Secretary determines that, due to exceptional circumstances, proceeding with a multiyear contract under this section is in the best interest of the Department of Defense and the Secretary provides the basis for such determination with the certification.

(7) The Secretary may not delegate the authority to make the certification under paragraph (3) or the determination under paragraph (6) to an official below the level of Under Secretary of Defense for Acquisition, Technology, and Logistics.

(j) Defense Contract Options for Varying Quantities.—The Secretary of Defense may instruct the Secretary of the military department concerned to incorporate into a proposed multiyear contract negotiated priced options for varying the quantities of end items to be procured over the period of the contract.

(k) Multiyear Contract Defined.—For the purposes of this section, a multiyear contract is a contract for the purchase of property for more than one, but not more than five, program years. Such a contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds and (if it does so provide) may provide for a cancellation payment to be made to the contractor if such appropriations are not made.

(l) Various Additional Requirements With Respect to Multiyear Defense Contracts.—(1)(A) The head of an agency may not initiate a contract described in subparagraph (B) unless the congressional defense committees are notified of the proposed contract at least 30 days in advance of the award of the proposed contract.

(B) Subparagraph (A) applies to the following contracts:

(2) The head of an agency may not initiate a multiyear contract for which the economic order quantity advance procurement is not funded at least to the limits of the Government's liability.

(3) The head of an agency may not initiate a multiyear procurement contract for any system (or component thereof) if the value of the multiyear contract would exceed $500,000,000 unless authority for the contract is specifically provided in an appropriations Act.

(4) Each report required by paragraph (5) with respect to a contract (or contract extension) shall contain the following:

(5) The head of an agency may not enter into a multiyear contract (or extend an existing multiyear contract), the value of which would exceed $500,000,000 (when entered into or when extended, as the case may be), until the Secretary of Defense submits to the congressional defense committees a report containing the information described in paragraph (4) with respect to the contract (or contract extension).

(6) The head of an agency may not terminate a multiyear procurement contract until 10 days after the date on which notice of the proposed termination is provided to the congressional defense committees.

(7) The execution of multiyear contracting authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement.

(8) This subsection does not apply to the National Aeronautics and Space Administration or to the Coast Guard.

(9) In this subsection:

(m) Increased Funding and Reprogramming Requests.—Any request for increased funding for the procurement of a major system under a multiyear contract authorized under this section shall be accompanied by an explanation of how the request for increased funding affects the determinations made by the Secretary under subsection (i).

(Added Pub. L. 103–355, title I, §1022(a)(1), Oct. 13, 1994, 108 Stat. 3257; amended Pub. L. 104–106, div. A, title XV, §1502(a)(10), div. E, title LVI, §5601(b), Feb. 10, 1996, 110 Stat. 503, 699; Pub. L. 105–85, div. A, title VIII, §806(a)(1), (b)(1), (c), title X, §1073(a)(47), (48)(A), Nov. 18, 1997, 111 Stat. 1834, 1835, 1903; Pub. L. 106–65, div. A, title VIII, §809, title X, §1067(1), Oct. 5, 1999, 113 Stat. 705, 774; Pub. L. 106–398, §1 [[div. A], title VIII, §§802(c), 806], Oct. 30, 2000, 114 Stat. 1654, 1654A–205, 1654A–207; Pub. L. 107–296, title XVII, §1704(b)(1), Nov. 25, 2002, 116 Stat. 2314; Pub. L. 107–314, div. A, title VIII, §820(a), Dec. 2, 2002, 116 Stat. 2613; Pub. L. 108–136, div. A, title X, §1043(b)(10), Nov. 24, 2003, 117 Stat. 1611; Pub. L. 108–375, div. A, title VIII, §814(a), title X, §1084(b)(2), Oct. 28, 2004, 118 Stat. 2014, 2060; Pub. L. 110–181, div. A, title VIII, §811(a), Jan. 28, 2008, 122 Stat. 217; Pub. L. 111–23, title I, §101(d)(2), May 22, 2009, 123 Stat. 1709; Pub. L. 113–291, div. A, title VIII, §816(a), (b), Dec. 19, 2014, 128 Stat. 3430, 3432; Pub. L. 114–92, div. A, title VIII, §811, Nov. 25, 2015, 129 Stat. 891; Pub. L. 115–91, div. A, title X, §1051(a)(14), Dec. 12, 2017, 131 Stat. 1561; Pub. L. 115–232, div. A, title VIII, §817, Aug. 13, 2018, 132 Stat. 1852.)

Subsection (i)(1)(A), referred to in subsec. (g)(2), related to certification of full funding of support costs in multiyear contracts, prior to the general amendment of subsec. (i) by Pub. L. 113–291, div. A, title VIII, §816(a), Dec. 19, 2014, 128 Stat. 3430. As amended, subsec. (i) no longer contains a par. (1)(A).

Section 2334(e)(2) of this title, referred to in subsec. (i)(3)(B), was redesignated as section 2334(f)(2) of this title by Pub. L. 114–328, div. A, title VIII, §842(a)(3), Dec. 23, 2016, 130 Stat. 2288.

2018—Subsec. (i)(2)(B). Pub. L. 115–232 substituted "supported by a preliminary cost analysis" for "made after the completion of a cost analysis" and struck out "for the purpose of section 2334(e)(1) of this title, and that the analysis supports those preliminary findings" after "Evaluation".

2017—Subsec. (l)(4). Pub. L. 115–91, in introductory provisions, substituted "Each report required by paragraph (5) with respect to a contract (or contract extension) shall contain the following:" for "Not later than the date of the submission of the President's budget request under section 1105 of title 31, the Secretary of Defense shall submit a report to the congressional defense committees each year, providing the following information with respect to each multiyear contract (and each extension of an existing multiyear contract) entered into, or planned to be entered into, by the head of an agency during the current or preceding year, shown for each year in the current future-years defense program and in the aggregate over the period of the current future-years defense program:".

2015—Subsecs. (a)(1), (i)(4). Pub. L. 114–92 substituted "significant" for "substantial".

2014—Subsec. (a)(7). Pub. L. 113–291, §816(b), substituted "subparagraphs (C) through (F) of subsection (i)(3)" for "subparagraphs (C) through (F) of paragraph (1) of subsection (i)".

Subsec. (i). Pub. L. 113–291, §816(a), amended subsec. (i) generally. Prior to amendment, subsec. (i) related to defense acquisitions specifically authorized by law.

2009—Subsec. (i)(1)(B). Pub. L. 111–23 substituted "Director of Cost Assessment and Program Analysis" for "Cost Analysis Improvement Group of the Department of Defense".

2008—Subsec. (a)(7). Pub. L. 110–181, §811(a)(1), added par. (7).

Subsec. (i)(1). Pub. L. 110–181, §811(a)(2), (3), inserted "the Secretary of Defense certifies in writing by no later than March 1 of the year in which the Secretary requests legislative authority to enter into such contract that" after "unless" in introductory provisions, added subpars. (A) to (F), redesignated former subpar. (B) as (G), and struck out former subpar. (A) which read as follows: "The Secretary of Defense certifies to Congress that the current future-years defense program fully funds the support costs associated with the multiyear program."

Subsec. (i)(5) to (7). Pub. L. 110–181, §811(a)(4), added pars. (5) to (7).

Subsec. (m). Pub. L. 110–181, §811(a)(5), added subsec. (m).

2004—Subsec. (g). Pub. L. 108–375, §814(a)(1), designated existing provisions as par. (1).

Subsec. (g)(1). Pub. L. 108–375, §§814(a)(2), 1084(b)(2), amended par. (1) identically, substituting "congressional defense committees" for "Committee on Armed Services and the Committee on Appropriations of the Senate and the Committee on Armed Services and the Committee on Appropriations of the House of Representatives".

Subsec. (g)(2). Pub. L. 108–375, §814(a)(3), added par. (2).

2003—Subsec. (l)(9), (10). Pub. L. 108–136 redesignated par. (10) as (9) and struck out former par. (9) which read as follows: "In this subsection, the term 'congressional defense committees' means the following:

2002—Subsec. (b)(2)(B). Pub. L. 107–296 substituted "of Homeland Security" for "of Transportation".

Subsec. (i)(4). Pub. L. 107–314 added par. (4).

2000—Subsec. (k). Pub. L. 106–398, §1 [[div. A], title VIII, §802(c)], struck out "or services" after "purchase of property".

Subsec. (l)(4). Pub. L. 106–398, §1 [[div. A], title VIII, §806(1)(A)], in introductory provisions, substituted "Not later than the date of the submission of the President's budget request under section 1105 of title 31, the Secretary of Defense shall submit a report to the congressional defense committees each year, providing the following information with respect to each multiyear contract (and each extension of an existing multiyear contract) entered into, or planned to be entered into, by the head of an agency during the current or preceding year" for "The head of an agency may not enter into a multiyear contract (or extend an existing multiyear contract) until the Secretary of Defense submits to the congressional defense committees a report with respect to that contract (or contract extension) that provides the following information".

Subsec. (l)(4)(B). Pub. L. 106–398, §1 [[div. A], title VIII, §806(1)(B)], substituted "in effect at the time the report is submitted" for "in effect immediately before the contract (or contract extension) is entered into" in introductory provisions.

Subsec. (l)(5) to (10). Pub. L. 106–398, §1 [[div. A], title VIII, §806(2), (3)], added par. (5) and redesignated former pars. (5) to (9) as (6) to (10), respectively.

1999—Subsec. (g). Pub. L. 106–65, §1067(1), substituted "and the Committee on Armed Services" for "and the Committee on National Security".

Subsec. (l)(4) to (7). Pub. L. 106–65, §809(1), (2), added par. (4) and redesignated former pars. (4) to (6) as (5) to (7), respectively. Former par. (7) redesignated (8).

Subsec. (l)(8). Pub. L. 106–65, §809(1), redesignated par. (7) as (8).

Subsec. (l)(8)(B). Pub. L. 106–65, §1067(1), substituted "Committee on Armed Services" for "Committee on National Security".

Subsec. (l)(9). Pub. L. 106–65, §809(3), added par. (9).

1997—Pub. L. 105–85, §1073(a)(48)(A), inserted ": acquisition of property" in section catchline.

Subsec. (a). Pub. L. 105–85, §806(c)(1), substituted "finds each of the following:" for "finds—" in introductory provisions, capitalized first letter of first word in pars. (1) to (6), and substituted a period for semicolon at end of pars. (1) to (4) and for "; and" at end of par. (5).

Subsec. (d)(1). Pub. L. 105–85, §806(c)(2), substituted "subsection (a)" for "paragraph (1)".

Subsec. (i)(1)(A). Pub. L. 105–85, §806(c)(3), substituted "future-years" for "five-year".

Subsec. (i)(3). Pub. L. 105–85, §806(a)(1), added par. (3).

Subsec. (k). Pub. L. 105–85, §1073(a)(47), substituted "this section" for "this subsection".

Subsec. (l). Pub. L. 105–85, §806(b)(1), added subsec. (l).

1996—Subsec. (g). Pub. L. 104–106, §1502(a)(10), substituted "the Committee on Armed Services and the Committee on Appropriations of the Senate and the Committee on National Security and the Committee on Appropriations of the" for "the Committees on Armed Services and on Appropriations of the Senate and".

Subsecs. (k), (l). Pub. L. 104–106, §5601(b), redesignated subsec. (l) as (k) and struck out former subsec. (k) which read as follows: "Inapplicability to Automatic Data Processing Contracts.—This section does not apply to contracts for the purchase of property to which section 111 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 759) applies."

Pub. L. 113–291, div. A, title VIII, §816(c), Dec. 19, 2014, 128 Stat. 3432, provided that: "The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [Dec. 19, 2014], and shall apply with respect to requests for specific authorization by law to carry out defense acquisition programs using multiyear contract authority that are made on or after that date."

Pub. L. 110–181, div. A, title VIII, §811(b), Jan. 28, 2008, 122 Stat. 219, provided that: "The amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [Jan. 28, 2008] and shall apply with respect to multiyear contracts for the purchase of major systems for which legislative authority is requested on or after that date."

Pub. L. 107–314, div. A, title VIII, §820(b), Dec. 2, 2002, 116 Stat. 2614, provided that:

"(1) Paragraph (4) of section 2306b(i) of title 10, United States Code, as added by subsection (a), shall not apply with respect to any contract awarded before the date of the enactment of this Act [Dec. 2, 2002].

"(2) Nothing in this section [amending this section] shall be construed to authorize the expenditure of funds under any contract awarded before the date of the enactment of this Act for any purpose other than the purpose for which such funds have been authorized and appropriated."

Amendment by Pub. L. 107–296 effective on the date of transfer of the Coast Guard to the Department of Homeland Security, see section 1704(g) of Pub. L. 107–296, set out as a note under section 101 of this title.

Pub. L. 105–85, div. A, title VIII, §806(a)(2), Nov. 18, 1997, 111 Stat. 1834, provided that: "Paragraph (3) of section 2306b(i) of title 10, United States Code, as added by paragraph (1), shall not apply with respect to a contract authorized by law before the date of the enactment of this Act [Nov. 18, 1997]."

Pub. L. 105–85, div. A, title VIII, §806(b)(2), Nov. 18, 1997, 111 Stat. 1835, provided that: "The amendment made by paragraph (1) [amending this section] shall take effect on October 1, 1998."

Amendment by section 5601(b) of 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.

For effective date and applicability of section, see section 10001 of Pub. L. 103–355, set out as an Effective Date of 1994 Amendment note under section 2302 of this title.

Pub. L. 114–328, div. A, title VIII, §853, Dec. 23, 2016, 130 Stat. 2296, provided that:

"(a) Authority.—The Secretary of Defense may conduct a multiyear contract, over a period of up to four years, for the purchase of units for multiple defense programs that are produced at common facilities at a high rate, and which maximize commonality, efficiencies, and quality, in order to provide maximum benefit to the Department of Defense. Contracts awarded under this section should allow for significant savings, as determined consistent with the authority under section 2306b of title 10, United States Code, to be achieved as compared to using separate annual contracts under individual programs to purchase such units, and may include flexible delivery across the overall period of performance.

"(b) Scope.—The contracts authorized in subsection (a) shall at a minimum provide for the acquisition of units from three discrete programs from two of the military departments.

"(c) Documentation.—Each contract awarded under subsection (a) shall include the documentation required to be provided for a multiyear contract proposal under section 2306b(i) of title 10.

"(d) Definitions.—In this section:

"(e) Sunset.—No new contracts may be awarded under the authority of this section after September 30, 2021."

Pub. L. 105–56, title VIII, §8008, Oct. 8, 1997, 111 Stat. 1221, provided that:

"(a) None of the funds provided in this Act [see Tables for classification] shall be available to initiate: (1) a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year of the contract or that includes an unfunded contingent liability in excess of $20,000,000; or (2) a contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year, unless the congressional defense committees [Committee on Armed Services and Subcommittee on National Security of the Committee on Appropriations of the House of Representatives and Committee on Armed Services and Subcommittee on Defense of the Committee on Appropriations of the Senate] have been notified at least 30 days in advance of the proposed contract award: Provided, That no part of any appropriation contained in this Act shall be available to initiate a multiyear contract for which the economic order quantity advance procurement is not funded at least to the limits of the Government's liability: Provided further, That no part of any appropriation contained in this Act shall be available to initiate multiyear procurement contracts for any systems or component thereof if the value of the multiyear contract would exceed $500,000,000 unless specifically provided in this Act: Provided further, That no multiyear procurement contract can be terminated without 10-day prior notification to the congressional defense committees: Provided further, That the execution of multiyear authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement.

"Funds appropriated in title III of this Act [111 Stat. 1211] may be used for multiyear procurement contracts as follows:

"(b) None of the funds provided in this Act and hereafter may be used to submit to Congress (or to any committee of Congress) a request for authority to enter into a contract covered by those provisions of subsection (a) that precede the first proviso of that subsection unless—

Similar provisions were contained in the following appropriation acts:

Pub. L. 115–245, div. A, title VIII, §8010, Sept. 28, 2018, 132 Stat. 3000.

Pub. L. 115–141, div. C, title VIII, §8010, Mar. 23, 2018, 132 Stat. 464.

Pub. L. 115–31, div. C, title VIII, §8010, May 5, 2017, 131 Stat. 247.

Pub. L. 114–113, div. C, title VIII, §8010, Dec. 18, 2015, 129 Stat. 2352.

Pub. L. 113–235, div. C, title VIII, §8010, Dec. 16, 2014, 128 Stat. 2253.

Pub. L. 113–76, div. C, title VIII, §8010, Jan. 17, 2014, 128 Stat. 105.

Pub. L. 113–6, div. C, title VIII, §8010, Mar. 26, 2013, 127 Stat. 297.

Pub. L. 112–74, div. A, title VIII, §8010, Dec. 23, 2011, 125 Stat. 806.

Pub. L. 112–10, div. A, title VIII, §8010, Apr. 15, 2011, 125 Stat. 57.

Pub. L. 111–118, div. A, title VIII, §8011, Dec. 19, 2009, 123 Stat. 3428, as amended by Pub. L. 111–212, title I, §305, July 29, 2010, 124 Stat. 2311.

Pub. L. 110–329, div. C, title VIII, §8011, Sept. 30, 2008, 122 Stat. 3621.

Pub. L. 110–116, div. A, title VIII, §8010, Nov. 13, 2007, 121 Stat. 1315.

Pub. L. 109–289, div. A, title VIII, §8008, Sept. 29, 2006, 120 Stat. 1273.

Pub. L. 109–148, div. A, title VIII, §8008, Dec. 30, 2005, 119 Stat. 2698.

Pub. L. 108–287, title VIII, §8008, Aug. 5, 2004, 118 Stat. 970.

Pub. L. 108–87, title VIII, §8008, Sept. 30, 2003, 117 Stat. 1072.

Pub. L. 107–248, title VIII, §8008, Oct. 23, 2002, 116 Stat. 1537.

Pub. L. 107–117, div. A, title VIII, §8008, Jan. 10, 2002, 115 Stat. 2248.

Pub. L. 106–259, title VIII, §8008, Aug. 9, 2000, 114 Stat. 675.

Pub. L. 106–79, title VIII, §8008, Oct. 25, 1999, 113 Stat. 1232.

Pub. L. 105–262, title VIII, §8008, Oct. 17, 1998, 112 Stat. 2298.

Pub. L. 104–208, div. A, title I, §101(b) [title VIII, §8009], Sept. 30, 1996, 110 Stat. 3009–71, 3009–89.

Pub. L. 104–61, title VIII, §8010, Dec. 1, 1995, 109 Stat. 653.

Pub. L. 103–335, title VIII, §8010, Sept. 30, 1994, 108 Stat. 2618.

Pub. L. 103–139, title VIII, §8011, Nov. 11, 1993, 107 Stat. 1439.

Pub. L. 102–396, title IX, §9013, Oct. 6, 1992, 106 Stat. 1903.

Pub. L. 102–172, title VIII, §8013, Nov. 26, 1991, 105 Stat. 1173.

Pub. L. 101–511, title VIII, §8014, Nov. 5, 1990, 104 Stat. 1877.

Pub. L. 101–165, title IX, §9021, Nov. 21, 1989, 103 Stat. 1133.

¹ See References in Text note below.