(a) Each HCA determination to use multi-year contracting, as defined in FAR 17.103, is limited to individual acquisitions where the full estimated cancellation ceiling does not exceed 20 percent of the total contract value over the multi-year term or $11.5 million, whichever is less. Cancellation ceiling provisions shall conform to the requirements of FAR 17.106-1(c). The determination is not delegable and shall address the issues in FAR 17.105-1(a) and the following:
(1) The amount of, and basis for, the estimated cancellation ceiling.
(2) Identification and assignment of a Contracting Officer holding a FAC-C Level III certification or, alternatively, one familiar with the application of this contracting method.
(3) Availability of appropriations to fund the obligation of total contract costs for the first year of performance plus the estimated amount of the full cancellation ceiling.
(4) Reasonable expectation that, throughout the contemplated contract performance period, the OPDIV, through its annual budget request, will seek funding for the contract at the level necessary to avoid contract cancellation; and
(5) Program requirements are reasonably stable and the associated technical risks are not excessive- i.e. , not of the nature or level to jeopardize contract completion or result in its cancellation.
Upon SPE request, the HCA shall provide a copy of each determination (other than those specified in 317.105-1(b) below).
(b)(1) SPE approval is required for any-
(i) Individual determination to use multi-year contracting with a cancellation ceiling in excess of the limits in 317.105-1(a); or
(ii) Class determination (see FAR Subpart 1.7).
(2) A determination involving a cancellation ceiling in excess of the limits in 317.105-1(a) shall present a compelling justification for the estimated cancellation ceiling. When the estimated cancellation ceiling exceeds $11.5 million, the determination shall be accompanied by a draft congressional notification letter pursuant to FAR 17.108 and 317.108.
(c) The funding required for performance of each year of a multi-year contract under FAR Subpart 17.1 and this subpart must be provided in full at the start of that program year.
[74 FR 62398, Nov. 27, 2009, as amended at 75 FR 21511, Apr. 26, 2010]
