17.105-2 Objectives
Source: FAR 17.105-2 on acquisition.gov
Multi-year contracting is encouraged when it delivers cost savings, efficiency, stability, and broader competition for government acquisitions.
Overview
FAR 17.105-2 outlines the primary objectives for using multi-year contracting in federal acquisitions. The regulation encourages agencies to consider multi-year contracts to achieve benefits such as cost savings, standardization, reduced administrative workload, continuity in production or performance, workforce stability, streamlined quality control, expanded competition, and incentives for contractor investment in productivity. These objectives guide contracting officers in determining when multi-year contracting is appropriate and beneficial for both the government and contractors.
Key Rules
- Cost Savings
- Multi-year contracts should be used when they can lower overall costs.
- Standardization
- Contracts can enhance standardization of products or services across years.
- Administrative Efficiency
- Reduces the administrative burden of annual contract placement and management.
- Continuity and Stability
- Ensures ongoing production or performance, minimizing recurring startup and shutdown costs.
- Workforce Stabilization
- Promotes stable employment for contractor personnel.
- Quality Control Consistency
- Avoids the need to establish new quality control procedures with different contractors each year.
- Broader Competition
- Attracts firms that may not compete for smaller, single-year contracts, especially where high startup costs are involved.
- Productivity Incentives
- Encourages contractors to invest in productivity improvements through capital investments and technology.
Responsibilities
- Contracting Officers: Evaluate and document the potential benefits of multi-year contracting in line with these objectives.
- Contractors: Demonstrate how their proposals align with these objectives, especially in terms of cost savings and productivity.
- Agencies: Oversee and support the use of multi-year contracts to achieve these policy goals.
Practical Implications
- This section exists to ensure multi-year contracts are used strategically to maximize value and efficiency.
- It impacts acquisition planning, proposal evaluation, and contract administration.
- Common pitfalls include failing to document the expected benefits or not aligning contract structure with these objectives.
Use of multi-year contracting is encouraged to take advantage of one or more of the following:
(a) Lower costs.
(b) Enhancement of standardization.
(c) Reduction of administrative burden in the placement and administration of contracts.
(d) Substantial continuity of production or performance, thus avoiding annual startup costs, preproduction testing costs, make-ready expenses, and phaseout costs.
(e) Stabilization of contractor work forces.
(f) Avoidance of the need for establishing quality control techniques and procedures for a new contractor each year.
(g) Broadening the competitive base with opportunity for participation by firms not otherwise willing or able to compete for lesser quantities, particularly in cases involving high startup costs.
(h) Providing incentives to contractors to improve productivity through investment in capital facilities, equipment, and advanced technology.