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10 U.S.C. § 3371 (ARMED FORCES)
§ 3371. Undefinitized contractual actions: required description of anticipated effect on military department requirements if use of undefinitized contractual action results in delay
The head of an agency may not enter into an undefinitized contractual action unless the request to the head of the agency for authorization of the contractual action includes a description of the anticipated effect on requirements of the military department concerned if a delay is incurred for purposes of determining contractual terms, specifications, and price before performance is begun under the contractual action.
10 U.S.C. § 3373 (ARMED FORCES)
§ 3373. Undefinitized contractual actions: limitation on inclusion of non-urgent requirements and on modification of scope
(a) Inclusion of Non-Urgent Requirements.—
Requirements for spare parts and support equipment that are not needed on an urgent basis may not be included in an undefinitized contractual action for spare parts and support equipment that are needed on an urgent basis unless the head of the agency approves such inclusion as being—
(1) good business practice; and
(2) in the best interests of the United States.
(b) Modification of Scope.—
The scope of an undefinitized contractual action under which performance has begun may not be modified unless the head of the agency approves such modification as being—
(1) good business practice; and
(2) in the best interests of the United States.
10 U.S.C. § 3374 (ARMED FORCES)
§ 3374. Undefinitized contractual actions: allowable profit
(a) Allowed Profit to Reflect Certain Reduced Cost Risks of Contractor.—
The head of an agency shall ensure that the profit allowed on an undefinitized contractual action for which the final price is negotiated after a substantial portion of the performance required is completed reflects—
(1) the possible reduced cost risk of the contractor with respect to costs incurred during performance of the contract before the final price is negotiated; and
(2) the reduced cost risk of the contractor with respect to costs incurred during performance of the remaining portion of the contract.
(b) Date as of Which Contractor Cost Risk to Be Determined.—
If a contractor submits a qualifying proposal to definitize an undefinitized contractual action and the contracting officer for such action definitizes the contract after the end of the 180-day period beginning on the date on which the contractor submitted the qualifying proposal, the head of the agency concerned shall ensure that the profit allowed on the contract accurately reflects the cost risk of the contractor as such risk existed on the date the contractor submitted the qualifying proposal.
10 U.S.C. § 3375 (ARMED FORCES)
§ 3375. Undefinitized contractual actions: time limit
No undefinitized contractual action may extend beyond 90 days without a written determination by the Secretary of the military department concerned, the head of the Defense Agency concerned, the commander of the combatant command concerned, or the Under Secretary of Defense for Acquisition and Sustainment (as applicable) that it is in the best interests of the military department, the Defense Agency, the combatant command, or the Department of Defense, respectively, to continue the action.
10 U.S.C. § 3377 (ARMED FORCES)
§ 3377. Inapplicability to Coast Guard and National Aeronautics and Space Administration; definitions
(a) Applicability.—
This chapter does not apply to the Coast Guard or the National Aeronautics and Space Administration.
(b) Definitions.—
In this chapter:
(1) The term “undefinitized contractual action” means a new procurement action entered into by the head of an agency for which the contractual terms, specifications, or price are not agreed upon before performance is begun under the action. Such term does not include contractual actions with respect to the following:
(A) Purchases in an amount not in excess of the amount of the simplified acquisition threshold.
(B) Special access programs.
(C) Congressionally mandated long-lead procurement contracts.
(2) The term “qualifying proposal” means a proposal that contains sufficient information to enable the Department of Defense to conduct a meaningful audit of the information contained in the proposal.
10 U.S.C. § 3401 (ARMED FORCES)
§ 3401. Task and delivery order contracts: definitions
In this chapter:
(1) Delivery order contract.—
The term “delivery order contract” means a contract for property—
(A) that does not procure or specify a firm quantity of property (other than a minimum or maximum quantity); and
(B) that provides for the issuance of orders for the delivery of property during the period of the contract.
(2) Task order contract.—
The term “task order contract” means a contract for services—
(A) that does not procure or specify a firm quantity of services (other than a minimum or maximum quantity); and
(B) that provides for the issuance of orders for the performance of tasks during the period of the contract.
10 U.S.C. § 3451 (ARMED FORCES)
§ 3451. Definitions
In this chapter:
(1) The terms “commercial product”, “commercial service”, “nondevelopmental item”, “component”, and “commercial component” have the meanings provided in sections 103, 103a, 110, 105, and 102, respectively, of title 41.
(2) The term “head of an agency” means the Secretary of Defense, the Secretary of Homeland Security, and the Administrator of the National Aeronautics and Space Administration.
(3) The term “agency” means the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration.
10 U.S.C. § 3457 (ARMED FORCES)
§ 3457. Treatment of certain products and services as commercial products and commercial services
(a) Goods and Services Provided by Nontraditional Defense Contractors.—
Notwithstanding section 3451(1) of this title, products and services provided by nontraditional defense contractors (as that term is defined in section 3014 of this title) may be treated by the head of an agency as commercial products and commercial services, respectively, for purposes of this chapter.
(b) Services Provided by Certain Nontraditional Contractors.—
Notwithstanding section 3451(1) of this title, services provided by a business unit that is a nontraditional defense contractor (as that term is defined in section 3014 of this title) shall be treated as commercial services for purposes of this chapter, to the extent that such services use the same pool of employees as used for commercial customers and are priced using methodology similar to methodology used for commercial pricing.
(c) Commingled Items Purchased by Contractors.—
Notwithstanding section 3451(1) of this title, items valued at less than $10,000 that are purchased by a contractor for use in the performance of multiple contracts with the Department of Defense and other parties and are not identifiable to any particular contract shall be treated as a commercial product for purposes of this chapter.
10 U.S.C. § 3501 (ARMED FORCES)
§ 3501. Multiyear contracts for acquisition of property: authority; definitions
(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:
(1) That the use of such a contract will result in significant savings of the total anticipated costs of carrying out the program through annual contracts.
(2) That the minimum need for the property to be purchased is expected to remain substantially unchanged during the contemplated contract period in terms of production rate, procurement rate, and total quantities.
(3) That there is a reasonable expectation that throughout the contemplated contract period the head of the agency will request funding for the contract at the level required to avoid contract cancellation.
(4) That there is a stable design for the property to be acquired and that the technical risks associated with such property are not excessive.
(5) That the estimates of both the cost of the contract and the anticipated cost avoidance through the use of a multiyear contract are realistic.
(6) In the case of a purchase by the Department of Defense, that the use of such a contract will promote the national security of the United States.
(7) In the case of a contract in an amount equal to or greater than $500,000,000, that the conditions required by paragraphs (3) through (6) of section 3507(c) of this title will be met, in accordance with the Secretary’s certification and determination under such subsection, by such contract.
(b) Multiyear Contract Defined.—
For the purposes of this subchapter, 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.
10 U.S.C. § 3502 (ARMED FORCES)
§ 3502. Multiyear contracts for acquisition of property: regulations
(a) Requirement.—
Each official named in subsection (b) 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 section 3501 of this title in a manner that will allow the most efficient use of multiyear contracting.
(b) Officials Specified to Prescribe Regulations.—
(1) Department of defense.—
The Secretary of Defense shall prescribe the regulations applicable to the Department of Defense.
(2) Coast guard.—
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.
(3) NASA.—
The Administrator of the National Aeronautics and Space Administration shall prescribe the regulations applicable to the National Aeronautics and Space Administration.
10 U.S.C. § 3503 (ARMED FORCES)
§ 3503. Multiyear contracts for acquisition of property: contract cancellation or termination
(a) Contract Cancellations.—
The regulations under section 3502 of this title 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.
(b) Cancellation or Termination for Insufficient Funding.—
In the event funds are not made available for the continuation of a contract made under this subchapter into a subsequent fiscal year, the contract shall be canceled or terminated. The costs of cancellation or termination may be paid from—
(1) appropriations originally available for the performance of the contract concerned;
(2) appropriations currently available for procurement of the type of property concerned, and not otherwise obligated; or
(3) funds appropriated for those payments.
(c) Contract Cancellation Ceilings Exceeding $100,000,000.—
(1) Before any contract described in section 3501(a) of this title 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 section 3501(a) of this title 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 section 3507(c) of this title, give written notification to the congressional defense committees of—
(A) the cancellation ceiling amounts planned for each program year in the proposed multiyear procurement contract, together with the reasons for the amounts planned;
(B) the extent to which costs of contract cancellation are not included in the budget for the contract; and
(C) a financial risk assessment of not including budgeting for costs of contract cancellation.
10 U.S.C. § 3504 (ARMED FORCES)
§ 3504. Multiyear contracts for acquisition of property: participation by subcontractors, vendors, and suppliers
In order to broaden the defense industrial base, the regulations under section 3502 of this title shall provide that, to the extent practicable—
(1) multiyear contracting under section 3501(a) of this title shall be used in such a manner as to seek, retain, and promote the use under such contracts of companies that are subcontractors, vendors, or suppliers; and
(2) upon accrual of any payment or other benefit under such a multiyear contract to any subcontractor, vendor, or supplier company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable.
10 U.S.C. § 3505 (ARMED FORCES)
§ 3505. Multiyear contracts for acquisition of property: protection of existing authority
The regulations under section 3502 of this title shall provide that, to the extent practicable, the administration of this subchapter, and of the regulations prescribed under this subchapter, shall not be carried out in a manner to preclude or curtail the existing ability of an agency—
(1) to provide for competition in the production of items to be delivered under a contract under section 3501(a) of this title; or
(2) to provide for termination of a prime contract the performance of which is deficient with respect to cost, quality, or schedule.
10 U.S.C. § 3506 (ARMED FORCES)
§ 3506. Department of defense contracts: acquisition of weapon systems
In the case of the Department of Defense, the authority under section 3501(a) of this title includes authority to enter into the following multiyear contracts in accordance with this subchapter:
(1) A multiyear contract for the purchase of a weapon system, items and services associated with a weapon system, and logistics support for a weapon system.
(2) A multiyear contract for advance procurement of components, parts, and materials necessary to the manufacture of a weapon system, including a multiyear contract for such advance procurement that is entered into in order to achieve economic-lot purchases and more efficient production rates.
10 U.S.C. § 3508 (ARMED FORCES)
§ 3508. Department of defense contracts: notice to congressional committees before taking certain actions
(a) Notice Before Award of Certain Contracts.—
(1) Required notice.—
The head of an agency may not initiate a contract described in paragraph (2) unless the congressional defense committees are notified of the proposed contract at least 30 days in advance of the award of the proposed contract.
(2) Covered contracts.—
Paragraph (1) 1 applies to the following contracts:
(A) A multiyear contract—
(i) that employs economic order quantity procurement in excess of $20,000,000 in any one year of the contract; or
(ii) that includes an unfunded contingent liability in excess of $20,000,000.
(B) Any 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.
(b) Notice Before Terminating Multiyear Procurement Contract.—
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.
(c) Inapplicability to Noaa and Coast Guard.—
This section and sections 3509 and 3510 of this title do not apply to the National Aeronautics and Space Administration or to the Coast Guard.
10 U.S.C. § 3509 (ARMED FORCES)
§ 3509. Department of defense contracts: multiyear contracts with value in excess of $500,000,000
(a) Limitation.—
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.
(b) Report Required Before Entering Into Contract Above Threshold.—
(1) In general.—
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 (2) with respect to the contract (or contract extension).
(2) Matter to be included in report.—
Each report required by paragraph (1) with respect to a contract (or contract extension) shall contain the following:
(A) The amount of total obligational authority under the contract (or contract extension) and the percentage that such amount represents of—
(i) the applicable procurement account; and
(ii) the agency procurement total.
(B) The amount of total obligational authority under all multiyear procurements of the agency concerned (determined without regard to the amount of the multiyear contract (or contract extension)) under multiyear contracts in effect at the time the report is submitted and the percentage that such amount represents of—
(i) the applicable procurement account; and
(ii) the agency procurement total.
(C) The amount equal to the sum of the amounts under subparagraphs (A) and (B), and the percentage that such amount represents of—
(i) the applicable procurement account; and
(ii) the agency procurement total.
(D) The amount of total obligational authority under all Department of Defense multiyear procurements (determined without regard to the amount of the multiyear contract (or contract extension)), including any multiyear contract (or contract extension) that has been authorized by the Congress but not yet entered into, and the percentage that such amount represents of the procurement accounts of the Department of Defense treated in the aggregate.
(3) Definitions.—
In this subsection:
(A) The term “applicable procurement account” means, with respect to a multiyear procurement contract (or contract extension), the appropriation account from which payments to execute the contract will be made.
(B) The term “agency procurement total” means the procurement accounts of the agency entering into a multiyear procurement contract (or contract extension) treated in the aggregate.
10 U.S.C. § 3510 (ARMED FORCES)
§ 3510. Department of defense contracts: additional matters with respect to multiyear defense contracts
(a) 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.
(b) Funding for Economic Order Quantity Advance Procurement.—
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.
(c) Use of Present Value Analysis.—
The execution of multiyear contracting authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement.
10 U.S.C. § 3531 (ARMED FORCES)
§ 3531. Multiyear contracts for acquisition of services: authority; definitions
(a) Authority.—
Subject to sections 3533 and 3534 of this title, the head of an agency may enter into contracts for periods of not more than five years for services described in subsection (b), and for items of supply related to such services, for which funds would otherwise be available for obligation only within the fiscal year for which appropriated whenever the head of the agency finds that—
(1) there will be a continuing requirement for the services consonant with current plans for the proposed contract period;
(2) the furnishing of such services will require a substantial initial investment in plant or equipment, or the incurrence of substantial contingent liabilities for the assembly, training, or transportation of a specialized work force; and
(3) the use of such a contract will promote the best interests of the United States by encouraging effective competition and promoting economies in operation.
(b) Covered Services.—
The authority under subsection (a) applies to the following types of services:
(1) Operation, maintenance, and support of facilities and installations.
(2) Maintenance or modification of aircraft, ships, vehicles, and other highly complex military equipment.
(3) Specialized training necessitating high quality instructor skills (for example, pilot and air crew members; foreign language training).
(4) Base services (for example, ground maintenance; in-plane refueling; bus transportation; refuse collection and disposal).
(5) Environmental remediation services for—
(A) an active military installation;
(B) a military installation being closed or realigned under a base closure law; or
(C) a site formerly used by the Department of Defense.
(c) Multiyear Contract Defined.—
For the purposes of this subchapter, a multiyear contract is a contract for the purchase of services 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.
(d) Military Installation Defined.—
In this subchapter, the term “military installation” has the meaning given such term in section 2801(c)(4) of this title.
10 U.S.C. § 3532 (ARMED FORCES)
§ 3532. Multiyear contracts for acquisition of services: applicable principles
In entering into multiyear contracts for services under the authority of this subchapter, the head of the agency shall be guided by the following principles:
(1) The portion of the cost of any plant or equipment amortized as a cost of contract performance should not exceed the ratio between the period of contract performance and the anticipated useful commercial life of such plant or equipment. Useful commercial life, for this purpose, means the commercial utility of the facilities rather than the physical life thereof, with due consideration given to such factors as location of facilities, specialized nature thereof, and obsolescence.
(2) Consideration shall be given to the desirability of obtaining an option to renew the contract for a reasonable period not to exceed three years, at prices not to include charges for plant, equipment and other nonrecurring costs, already amortized.
(3) Consideration shall be given to the desirability of reserving in the agency the right, upon payment of the unamortized portion of the cost of the plant or equipment, to take title thereto under appropriate circumstances.