Overview
FAR 17.105 establishes the criteria and strategic goals for implementing multi-year contracting, distinguishing between the approval requirements for civilian agencies and defense-related agencies (DoD, NASA, and the Coast Guard). It focuses on ensuring that long-term commitments are only made when requirements are stable and such an arrangement provides clear economic or administrative advantages to the Government.
Key Rules
- Civilian Agency Requirements: For agencies other than DoD, NASA, and the Coast Guard, the Head of the Contracting Activity (HCA) must determine that the need is firm and continuing and that the contract promotes economy or full and open competition.
- DoD, NASA, and Coast Guard Requirements: These agencies face stricter criteria for supplies, including "significant savings," stable design/low technical risk, realistic cost estimates, and a reasonable expectation of continuous funding.
- Mandatory Cancellation: If Congress fails to appropriate funds for succeeding years of the contract, the agency is required to cancel the contract.
- Scope of Use: Multi-year contracting is permissible for both supplies and services.
- Encouraged Objectives: The policy explicitly encourages multi-year use to achieve lower costs, enhance standardization, stabilize contractor workforces, and incentivize contractor investment in advanced technology and capital facilities.
Practical Implications
- High Barrier to Entry: Because multi-year contracts commit the government beyond the current fiscal year, they require rigorous justification regarding "stable requirements," making them difficult to use for programs with fluctuating designs or uncertain funding.
- Administrative Efficiency: While the upfront justification and approval process is more intensive, it reduces the long-term administrative burden by eliminating the need for annual recompetes or repetitive contract placements.