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.
(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1822(a), (e), Jan. 1, 2021, 134 Stat. 4197, 4198.)
heading: Codification
text: The text of subsec. (c) of section 2306b of this title, which was transferred to this section, redesignated as subsec. (a), and amended by Pub. L. 116–283, § 1822(e)(1), (2), was based on Pub. L. 103–355, title I, § 1022(a)(1), Oct. 13, 1994, 108 Stat. 3257.
The text of subsec. (f) of section 2306b of this title, which was transferred to this section, redesignated as subsec. (b), and amended by Pub. L. 116–283, § 1822(e)(1), (3), was based on Pub. L. 103–355, title I, § 1022(a)(1), Oct. 13, 1994, 108 Stat. 3257.
The text of subsec. (g) of section 2306b of this title, which was transferred to this section, redesignated as subsec. (c), and amended by Pub. L. 116–283, § 1822(e)(1), (4), was based on Pub. L. 103–355, title I, § 1022(a)(1), Oct. 13, 1994, 108 Stat. 3257; Pub. L. 104–106, div. A, title XV, § 1502(a)(10), Feb. 10, 1996, 110 Stat. 503; Pub. L. 106–65, div. A, title X, § 1067(1), Oct. 5, 1999, 113 Stat. 774; Pub. L. 108–375, div. A, title VIII, § 814(a), title X, § 1084(b)(2), Oct. 28, 2004, 118 Stat. 2014, 2060.
heading: Prior Provisions
text: A prior section 3503 was renumbered section 7203 of this title.
heading: Amendments
text: 2021—Subsec. (a). Pub. L. 116–283, § 1822(e)(1), (2), redesignated subsec. (c) of section 2306b of this title as subsec. (a) of this section and inserted “under section 3502 of this title” after “The regulations”.
Subsec. (b). Pub. L. 116–283, § 1822(e)(1), (3), redesignated subsec. (f) of section 2306b of this title as subsec. (b) of this section and substituted “under this subchapter” for “under this section” in introductory provisions.
Subsec. (c). Pub. L. 116–283, § 1822(e)(1), (4)(A), (B), redesignated subsec. (g) of section 2306b of this title as subsec. (c) of this section and realigned margins of pars. (1) and (2).
Subsec. (c)(1). Pub. L. 116–283, § 1822(e)(4)(C), substituted “section 3501(a) of this title” for “subsection (a)”.
Subsec. (c)(2). Pub. L. 116–283, § 1822(e)(4)(C), (D), in introductory provisions, substituted “section 3501(a) of this title” for “subsection (a)” and “required by section 3507(c) of this title, give written” for “required by subsection (i)(1)(A), give written”.
heading: Effective Date
text: Section and amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as an Effective Date of 2021 Amendment note preceding section 3001 of this title.