[Code of Federal Regulations] [Title 48, Volume 5] [Revised as of October 1, 2006] From the U.S. Government Printing Office via GPO Access [CITE: 48CFR817.105-1] [Page 182-183] TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM CHAPTER 8--DEPARTMENT OF VETERANS AFFAIRS PART 817_SPECIAL CONTRACTING METHODS--Table of Contents Subpart 817.1_Multi-Year Contracting Sec. 817.105-1 Uses. (a) Pursuant to Title 38, United States Code, Chapter 1, Section 114 (as amended by Pub. L. 101-237), multiyear contracting not exceeding 5 years is authorized for obtaining supplies and services when the Secretary has made the following determinations: (1) Appropriations are available for obligation for the total payments for the fiscal year the contract is entered into plus the estimated amount of any cancellation charges. (2) The contract is in the best interest of the Government due to the effect it would have in: (i) Reducing cost; (ii) Achieving contract administration and other efficiencies; (iii) Increasing quality contract performance; (iv) Encouraging effective competition. (3) During the contract period: (i) There is a continuing need for the supplies or services; (ii) There is little likelihood of substantial changes in need for the supplies and services in terms of quantity or rate of delivery; and (iii) The specifications for the supplies or services are expected to be reasonably stable. (4) The risks relating to a prospective contractor's ability to perform in accordance with the specifications and other contract terms are not excessive; (5) The use of a multiyear contract will not inhibit competition from small business firms; (6) In the case of a pharmaceutical item for which a patent has expired less than 4 years before the solicitation issue date, there is no substantial likelihood that increased competition will occur during the term of the contact that would make the contract prices higher than would be reasonable. (b) The authority of the Secretary to enter into multiyear contracts and to make the determinations specified in 817.102-1(a) of this section is delegated as follows: [[Page 183]] (1) Heads of contracting activities. For contracts not requiring legal/technical reviews pursuant to 801.602-70 (for purposes of determining applicability of the thresholds, the total dollar amount of the contract over its full multiyear term will be used), and which do not contain a first year cancellation ceiling which exceeds 20 percent of the total dollar amount of the contract over the full multi-year term. (2) Deputy Assistant Secretary for Acquisition and Materiel Management, will approve all proposed uses of multiyear contracts not authorized for approval by heads of contracting activities. For approval purposes, the head of the contracting activity will justify and document the use of a multiyear contract against each of the criteria specified in 817.102-1 (a)(1) through (a)(6) of this section. The justification will additionally delineate the cancellation ceiling and the method used for calculating that ceiling and will specify the advantages of multiyear contracts over other alternative methods, e.g., option year contracts. (c) Cancellation ceilings will be carefully developed in accordance with FAR 17.106-1. [54 FR 980, Jan. 11, 1989, as amended at 57 FR 44129, Sept. 24, 1992. Redesignated and amended at 63 FR 69219, Dec. 16, 1998]