
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC2306c]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                PART IV--SERVICE, SUPPLY, AND PROCUREMENT
 
                   CHAPTER 137--PROCUREMENT GENERALLY
 
Sec. 2306c. Multiyear contracts: acquisition of services

    (a) Authority.--Subject to subsections (d) and (e), 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).

    (c) Applicable Principles.--In entering into multiyear contracts for 
services under the authority of this section, 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.

    (d) Restrictions Applicable Generally.--(1) The head of an agency 
may not initiate under this section a contract for services that 
includes an unfunded contingent liability in excess of $20,000,000 
unless the committees of Congress named in paragraph (5) are notified of 
the proposed contract at least 30 days in advance of the award of the 
proposed contract.
    (2) The head of an agency may not initiate a multiyear contract for 
services under this section if the value of the multiyear contract would 
exceed $500,000,000 unless authority for the contract is specifically 
provided by law.
    (3) The head of an agency may not terminate a multiyear procurement 
contract for services until 10 days after the date on which notice of 
the proposed termination is provided to the committees of Congress named 
in paragraph (5).
    (4) 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 committees of Congress named in 
paragraph (5), and such contract may not then be awarded until the end 
of a period of 30 days beginning on the date of such notification.
    (5) The committees of Congress referred to in paragraphs (1), (3), 
and (4) are as follows:
        (A) The Committee on Armed Services and the Committee on 
    Appropriations of the Senate.
        (B) The Committee on Armed Services and the Committee on 
    Appropriations of the House of Representatives.

    (e) Cancellation or Termination for Insufficient Funding After First 
Year.--In the event that funds are not made available for the 
continuation of a multiyear contract for services into a subsequent 
fiscal year, the contract shall be canceled or terminated, and 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 services concerned, and not otherwise obligated; or
        (3) funds appropriated for those payments.

    (f) Multiyear Contract Defined.--For the purposes of this section, 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.

(Added Pub. L. 106-398, Sec. 1 [[div. A], title VIII, Sec. 802(a)(1)], 
Oct. 30, 2000, 114 Stat. 1654, 1654A-203.)


                             Effective Date

    Pub. L. 106-398, Sec. 1 [[div. A], title VIII, Sec. 802(d)], Oct. 
30, 2000, 114 Stat. 1654, 1654A-205, provided that: ``Section 2306c of 
title 10, United States Code (as added by subsection (a)), shall apply 
with respect to contracts for which solicitations of offers are issued 
after the date of the enactment of this Act [Oct. 30, 2000].''

                  Section Referred to in Other Sections

    This section is referred to in section 2306 of this title.
