Overview
This section outlines the mandatory reporting requirements and waiting periods that federal agencies must observe before awarding multi-year contracts that feature high cancellation ceilings.
Key Rules
- Thresholds for Notification:
- Civilian Agencies: Written notification is required if the cancellation ceiling exceeds $20 million.
- DoD, NASA, and Coast Guard: Written notification is required if the cancellation ceiling exceeds $200 million.
- Mandatory Recipients: The head of the agency must notify the Appropriations committees of both the House and Senate, along with the relevant Oversight committees (for civilian agencies) or Armed Services committees (for DoD, NASA, and Coast Guard).
- Statutory Waiting Period: A contract subject to these rules cannot be awarded until at least 31 days have passed since the date of the Congressional notification.
- Agency Responsibility: Because committee information may change or be difficult to locate, agencies are expected to maintain specific guidance for contracting officers within their internal supplemental regulations.
Practical Implications
- Procurement Timeline: Contracting officers must factor a minimum 31-day "cooling-off" period into their acquisition milestones, which can delay award dates for large-scale multi-year efforts.
- Administrative Coordination: Awarding these contracts requires high-level internal coordination to ensure the head of the agency reviews and signs the formal notifications to Congress before the procurement can proceed.