A multiyear (MY) contract is a type of contract where the Government buys the entire multiyear quantity at the outset, unlike what we do when we use options. The multiyear contract includes requirements covering 2-5 fiscal years.
Statutory criteria for use of a multiyear contract: (10 USC 2306b(a)):
Advantages of a Multiyear Contract:
Unfunded contingent liability:
Does not tie up large amount of Total Obligation Authority but if cancellation, program must find money to cover costs.
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