Page:United States Statutes at Large Volume 95.djvu/1145

 PUBLIC LAW 9 7 - 8 6 - D E C. 1, 1981

95 STAT. 1119

"(C) that there is a reasonable expectation that throughout the contemplated contract period the Department of Defense will request funding for the contract at the level required to avoid contract cancellation; "(D) that there is a stable design for the property to be acquired and that the technical risks associated with such property are not excessive; and "(E) that the estimates of both the cost of the contract and the anticipated cost avoidance through the use of a multiyear contract are realistic. "(2)(A) The Secretary of Defense shall prescribe defense acquisition regulations to promote the use of multiyear contracting as authorized by paragraph (1) in a manner that will allow the most efficient use of multiyear contracting. "(B) Such regulations may provide for cancellation provisions in such multiyear contracts to the extent that such provisions are necessary and in the best interests of the United States. Such cancellation provisions may include consideration of both recurring and nonrecurring costs of the contractor associated with the production of the items to be delivered under the contract. "(C) In order to broaden the defense industrial base, such regulations shall provide that, to the extent practicable— "(i) multiyear contracting under paragraph (1) shall be used in such a manner as to seek, retain, and promote the use under such contracts of companies that are subcontractors, vendors, or suppliers; and "(ii) upon accrual of any payment or other benefit under such a multiyear contract to any subcontractor, vendor, or supplier company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable. "(D) Such regulations shall also provide that, to the extent practicable, the administration of this subsection, and of the regulations prescribed under this subsection, shall not be carried out in a manner to preclude or curtail the existing ability of agencies in the Department of Defense to— "(i) provide for competition in the production of items to be delivered under such a contract; or "(ii) provide for termination of a prime contract the performance of which is deficient with respect to cost, quality, or schedule. "(3) Before any contract described in paragraph (1) 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 on Armed Services and on Appropriations of the Senate and House of Representatives, and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification, "(4) Contracts made under this subsection may be used for the advance procurement of components, parts, and materials necessary to the manufacture of a weapon system, and contracts may be made under this subsection for such advance procurement, if feasible and practical, in order to achieve economic-lot purchases and more efficient production rates. "(5) In the event funds are not made available for the continuation of a contract made under this subsection into a subsequent fiscal

Regulations.

Cancellation notification to congressional committees.

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