Page:United States Statutes at Large Volume 114 Part 3.djvu/246

 114 STAT. 1654A-204 PUBLIC LAW 106-398—APPENDIX "(3) the use of such a contract will promote the best interests of the United States by encouraging effective competition and promoting economies in operation. "(b) COVERED SERVICES.— The authority under subsection (a) applies to the following types of services: "(1) Operation, maintenance, and support of facilities and installations. "(2) Maintenance or modification of aircraft, ships, vehicles, and other highly complex military equipment. "(3) Specialized training necessitating high quality instructor skills (for example, pilot and air crew members; foreign language training). "(4) Base services (for example, ground maintenance; inplane refueling; bus transportation; refuse collection and disposal). "(c) APPLICABLE PRINCIPLES. —In entering into multiyear contracts for services under the authority of this section, the head of the agency shall be guided by the following principles: "(1) The portion of the cost of any plant or equipment amortized as a cost of contract performance should not exceed the ratio between the period of contract performance and the anticipated useful commercial life of such plant or equipment. Useful commercial life, for this purpose, means the commercial utility of the facilities rather than the physical life thereof, with due consideration given to such factors as location of facilities, specialized nature thereof, and obsolescence. "(2) Consideration shall be given to the desirability of obtaining an option to renew the contract for a reasonable period not to exceed three years, at prices not to include charges for plant, equipment and other nonrecurring costs, already amortized. "(3) Consideration shall be given to the desirability of reserving in the agency the right, upon payment of the unamortized portion of the cost of the plant or equipment, to take title thereto under appropriate circumstances. "(d) RESTRICTIONS APPLICABLE GENERALLY. — (1) The head of an agency may not initiate under this section a contract for services that includes an unfunded contingent liability in excess of $20,000,000 unless the committees of Congress named in paragraph (5) are notified of the proposed contract at least 30 days in advance of the award of the proposed contract. "(2) The head of an agency may not initiate a multiyear contract for services under this section if the value of the multiyear contract would exceed $500,000,000 unless authority for the contract is specifically provided by law. "(3) The head of an agency may not terminate a multiyear procurement contract for services until 10 days after the date on which notice of the proposed termination is provided to the committees of Congress named in paragraph (5). "(4) Before any contract described in subsection (a) that contains a clause setting forth a cancellation ceiling in excess of $100,000,000 may be awarded, the head of the agency concerned shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the committees of Congress named in paragraph (5), and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification.

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