Multiyear Procurement (MYP) and Block Buy
Contracting in Defense Acquisition:
Background and Issues for Congress
Updated July 11, 2024
Congressional Research Service
https://crsreports.congress.gov
R41909

Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition

Summary
Multiyear procurement (MYP) and block buy contracting (BBC) are special contracting
mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number
of defense acquisition programs. Compared to the standard or default approach of annual
contracting, MYP and BBC have the potential for reducing weapon procurement costs by a few
or several percent.
Under annual contracting, DOD uses one or more contracts for each year’s worth of procurement
of a given kind of item. Under MYP, DOD instead uses a single contract for two to five years’
worth of procurement of a given kind of item without having to exercise a contract option for
each year after the first year. DOD needs congressional approval (in both a DOD appropriations
act and an act other than a DOD appropriations act) for each use of MYP. There is a permanent
statute governing MYP contracting—10 U.S.C. 3501. Under this statute, a program must meet
several criteria to qualify for MYP.
Compared with estimated costs under annual contracting, estimated savings for programs being
proposed for MYP have ranged from less than 5% to more than 15%, depending on the
particulars of the program in question, with many estimates falling in the range of 5% to 10%. In
practice, actual savings from using MYP rather than annual contracting can be difficult to observe
or verify because of cost growth during the execution of the contract due to changes in the
program that are independent of the use of MYP rather than annual contracting.
BBC is similar to MYP in that it permits DOD to use a single contract for more than one year’s
worth of procurement of a given kind of item without having to exercise a contract option for
each year after the first year. BBC is also similar to MYP in that DOD needs congressional
approval for each use of BBC. BBC differs from MYP in the following ways:
• There is no permanent statute governing the use of BBC.
• There is no requirement that BBC be approved in both a DOD appropriations act
and an act other than a DOD appropriations act.
• Programs being considered for BBC do not need to meet any legal criteria to
qualify for BBC, because there is no permanent statute governing the use of BBC
that establishes such criteria.
• A BBC contract can cover more than five years of planned procurements.
• Economic order quantity (EOQ) authority—the authority to bring forward
selected key components of the items to be procured under the contract and
purchase the components in batch form during the first year or two of the
contract—does not come automatically as part of BBC authority (as it does with
MYP authority), because there is no permanent statute governing the use of BBC
that includes EOQ authority as an automatic feature. For EOQ to be part of a
block buy contract, the legislative provision authorizing the block contract must
explicitly include authority for using EOQ.
• BBC contracts are less likely to include cancellation penalties.

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Introduction
Issues for Congress
This report provides background information and issues for Congress on multiyear procurement
(MYP) and block buy contracting (BBC),1 which are special contracting mechanisms that
Congress permits the Department of Defense (DOD) to use for a limited number of defense
acquisition programs. Compared to the standard or default approach of annual contracting, MYP
and BBC have the potential for reducing weapon procurement costs by a few or several percent.
Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in
the future more frequently, less frequently, or about as frequently as they are currently used;
whether to create a permanent statute to govern the use of BBC, analogous to the permanent
statute that governs the use of MYP; and whether the Coast Guard should begin making use of
MYP and BBC. Congress’s decisions on these issues could affect defense acquisition practices,
defense funding requirements, and the defense industrial base.
Terminology and Scope of Report
Contracting Mechanisms and Funding Approaches
In discussing MYP, BBC, and incremental funding, it can be helpful to distinguish contracting
mechanisms from funding approaches. The two are often mixed together in discussions of DOD
acquisition, sometimes leading to confusion. Stated briefly
• Funding approaches are ways that Congress can appropriate funding for
weapon procurement programs, so that DOD can then put them under contract.
Examples of funding approaches include traditional full funding (the standard or
default approach), incremental funding, and advance appropriations.2 Any of
these funding approaches might make use of advance procurement (AP)
funding.3
• Contracting mechanisms are ways for DOD to contract for the procurement of
weapons systems, once funding for those systems has been appropriated by
Congress. Examples of contracting mechanisms include annual contracting (the
standard or default DOD approach), MYP, and BBC. Contracting mechanisms
can materially change the total procurement cost of a ship.

1 MYP is an established acronym for multiyear procurement. BBC is not an established acronym for block buy
contracting, but is used in this CRS report for purposes of convenience.
2 For more on these three funding approaches, see CRS Report RL31404, Defense Procurement: Full Funding Policy—
Background, Issues, and Options for Congress, by Ronald O'Rourke and Stephen Daggett, and CRS Report RL32776,
Navy Ship Procurement: Alternative Funding Approaches—Background and Options for Congress, by Ronald
O'Rourke. Advance appropriations, which are not to be confused with advance procurement (AP) funding (see footnote
3), are essentially a legislatively locked-in form of incremental funding. Unlike incremental funding, advance
appropriations qualify under budgeting regulations as a form of full funding.
3 AP funding is provided in one or more years prior to the year of procurement of a weapon system for the procurement
of long-leadtime components—components with long construction times. Such components must be funded prior to the
procurement of the remainder of the weapon system if they are to be ready for installation in the weapon system at the
appropriate point in the construction process. AP funding is a permitted exception to the full funding provision. AP
funding is not to be confused with advance appropriations (see footnote 2).
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The use of a particular funding approach in a defense acquisition program does not dictate the use
of a particular contracting mechanism. Defense acquisition programs consequently can be
implemented using various combinations of funding approaches and contracting mechanisms.
Most DOD weapon acquisition programs use a combination of traditional full funding and annual
contracting. A few programs, particularly certain Navy shipbuilding programs, use incremental
funding as their funding approach. A limited number of DOD programs use MYP as their
contracting approach, and to date four Navy shipbuilding programs have used BBC at some point
as their contracting approach. The situation is summarized in Table 1.
Table 1. Contracting Mechanisms and Funding Approaches
Funding Approaches
Advance

Full funding
Incremental funding
appropriations
A few programs

Annual
(e.g., CVNs, LHAs,
contracting
Most programs
DDG-1000s, and SSBN-
826s)
Contracting
MYP
Selected programs

mechanisms
Virginia class (boats 1-4),
Gerald R. Ford (CVN-

Littoral Combat Ship
78) class aircraft
Block buy
(ships 5-26), and John
carriers (CVNs 80 and
contracting
Lewis (TAO-205) class
81).
oilers (ships 1-6).
Source: Table prepared by CRS.
Notes: Advance procurement (AP) can be used with any of the funding approaches. CVNs are nuclear-powered
aircraft carriers; LHAs are large-deck amphibious assault ships; DDG-1000s are destroyers; SSBN-826s are
Columbia-class ballistic missile submarines (where incremental funding is to be used for the first two ships).
This report focuses on the contracting approaches of MYP and BBC and how they compare to
annual contracting. Other CRS reports discuss the funding approaches of traditional full funding,
incremental funding, and advance appropriations.4
Background
Multiyear Procurement (MYP)
MYP in Brief5
What is MYP, and how does it differ from annual contracting? MYP, also known as multiyear
contracting, is an alternative to the standard or default DOD approach of annual contracting.
Under annual contracting, DOD uses one or more contracts for each year’s worth of procurement
of a given kind of item. Under MYP, DOD instead uses a single contract for two to five years’

4 See footnote 2 for citations to these reports. Appropriating funding for a program and placing a program under
contract are steps in a larger sequence of budget-related events that includes authorization, appropriation, obligation,
and outlays. For a general discussion of this sequence, see CRS Report 98-721, Introduction to the Federal Budget
Process, coordinated by James V. Saturno.
5 For an additional brief overview of MYP, see Department of Defense, “Multiyear (MY) Procurement,” undated, 11
pp., accessed October 15, 2020, at https://www.acq.osd.mil/dpap/paic/Docs/multiyear.pdf.
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worth of procurement of a given kind of item, without having to exercise a contract option for
each year after the first year. DOD needs congressional approval for each use of MYP.
To illustrate the basic difference between MYP and annual contracting, consider a hypothetical
DOD program to procure 20 single-engine aircraft of a certain kind over the five-year period
FY2025-FY2029, at a rate of 4 aircraft per year:
• Under annual contracting, DOD would issue one or more contracts for each
year’s procurement of four aircraft. After Congress funds the procurement of the
first four aircraft in FY2025, DOD would issue one or more contracts (or
exercise a contract option) for those four aircraft. The next year, after Congress
funds the procurement of the next four aircraft in FY2026, DOD would issue one
or more contracts (or exercise a contract option) for those four aircraft, and so on.
• Under MYP, DOD would issue one contract covering all 20 aircraft to be
procured during the five-year period FY2025-FY2029. DOD would award this
contract in FY2025, at the beginning of the five-year period, following
congressional approval to use MYP for the program, and congressional
appropriation of the FY2025 funding for the program. To continue the
implementation of the contract over the next four years, DOD would request the
FY2026 funding for the program as part of DOD’s proposed FY2026 budget, the
FY2027 funding as part of DOD’s proposed FY2027 budget, and so on.
Potential Savings Under MYP
How much can MYP save? Compared with estimated costs under annual contracting, estimated
savings for programs being proposed for MYP have ranged from less than 5% to more than 15%,
depending on the particulars of the program in question, with many estimates falling in the range
of 5% to 10%. In practice, actual savings from using MYP rather than annual contracting can be
difficult to observe or verify because of cost growth during the execution of the contract that was
caused by developments independent of the use of MYP rather than annual contracting.
A February 2012 briefing by the Cost Assessment and Program Evaluation (CAPE) office within
the Office of the Secretary of Defense (OSD) states that “MYP savings analysis is difficult due to
the lack of actual costs on the alternative acquisition path, i.e., the path not taken.”6 The briefing
states that CAPE up to that point had assessed MYP savings for four aircraft procurement
programs—F/A-18E/F strike fighters, H-60 helicopters, V-22 tilt-rotor aircraft, and CH-47F
helicopters—and that CAPE’s assessed savings ranged from 2% to 8%.7
A 2008 Government Accountability Office (GAO) report stated that
DOD does not have a formal mechanism for tracking multiyear results against original
expectations and makes few efforts to validate whether actual savings were achieved by
multiyear procurement. It does not maintain comprehensive central records and historical
information that could be used to enhance oversight and knowledge about multiyear
performance to inform and improve future multiyear procurement (MYP) candidates. DOD
and defense research centers officials said it is difficult to assess results because of the lack

6 Slide 10 from briefing entitled “Multiyear Procurement: A CAPE Perspective,” given at DOD cost analysis
symposium, February 15-17, 2012, posted at InsideDefense.com (subscription required), May 14, 2012.
7 Slide 12 from briefing entitled “Multiyear Procurement: A CAPE Perspective,” given at DOD cost analysis
symposium, February 15-17, 2012, posted at InsideDefense.com (subscription required), May 14, 2012. Slide 12 also
stated that these assessed savings were based on comparing CAPE’s estimate of what the programs would cost under
annual contracting (which the briefing refers to as single-year procurement or SYP) to the contractor’s MYP proposal.
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of historical information on multiyear contracts, comparable annual costs, and the dynamic
acquisition environment.8
How does MYP potentially save money? Compared to annual contracting, using MYP can in
principle reduce the cost of the weapons being procured in two primary ways:
• Contractor optimization of workforce and production facilities. An MYP
contract gives the contractor (e.g., an airplane manufacturer or shipbuilder)
confidence that a multiyear stream of business of a known volume will very
likely materialize. This confidence can permit the contractor to make investments
in the firm’s workforce and production facilities that are intended to optimize the
facility for the production of the items being procured under the contract. Such
investments can include payments for retaining or training workers, or for
building, expanding, or modernizing production facilities. Under annual
contracting, the manufacturer might not have enough confidence about its future
stream of business to make these kinds of investments, or might be unable to
convince its parent firm to finance them.
• Economic order quantity (EOQ) purchases of selected long-leadtime
components. Under an MYP contract, DOD is permitted to bring forward
selected key components of the items to be procured under the contract and to
purchase the components in batch form during the first year or two of the
contract. In the hypothetical example introduced earlier, using MYP could permit
DOD to purchase, say, the 20 engines for the 20 aircraft in the first year or two of
the five-year contract. Procuring selected components in this manner under an
MYP contract is called an economic order quantity (EOQ) purchase.9 EOQ
purchases can reduce the procurement cost of the weapons being procured under
the MYP contract by allowing the manufacturers of components to take
maximum advantage of production economies of scale that are possible with
batch orders.10

8 Government Accountability Office, Defense Acquisitions[:] DOD’s Practices and Processes for Multiyear
Procurement Should Be Improved, GAO-08-298, February 2008, p. 3. For additional discussion of the potential costs
and benefits of MYP, see Scot A. Arnold and Bruce R. Hamon, The Relative Cost and Benefits of Multi-year
Procurement Strategies, Institute for Defense Analyses, June 2013, IDA Document NS D-4893, 37 pp., accessed
October 15, 2020, at https://www.ida.org/-/media/feature/publications/i/id/ida-nsd-4893-the-relative-costs-and-benefits-
of-multi-year-procurement-strategies/ida-document-ns-d-4893.ashx. See also Department of the Navy, DASN(AIR)
Multiyear Procurement (MYP) Guidebook, v. 2.0, November 10, 2010, accessed October 15, 2020, at
https://www.secnav.navy.mil/rda/Policy-OLD/dasnairmypguidebookv20november102010.pdf.
9 The term EOQ is occasionally used in discussions of defense acquisition, somewhat loosely, to refer to any high-
quantity or batch order of items, even those that do not take place under MYP or BBC. As a general matter, however,
EOQs as described here occur only within MYP and block buy contracts.
10 A 2008 Government Accountability Office (GAO) report on multiyear contracting lists five areas of savings, most of
which are covered in the two general areas of savings outlined above. One of GAO’s five areas of savings—limited
engineering changes due to design stability—can also occur in programs that use annual contracting. The GAO report
states the following:
Multiyear procurement can potentially save money and improve the defense industrial base by
permitting the more efficient use of a contractor’s resources. Multiyear contracts are expected to
achieve lower unit costs compared to annual contracts through one or more of the following
sources: (1) purchase of parts and materials in economic order quantities (EOQ), (2) improved
production processes and efficiencies, (3) better utilized industrial facilities, (4) limited engineering
changes due to design stability during the multiyear period, and (5) cost avoidance by reducing the
burden of placing and administering annual contracts. Multiyear procurement also offers
opportunities to enhance the industrial base by providing defense contractors a longer and more
(continued...)
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What gives the contractor confidence that the multiyear stream of business will materialize? At
least two things give the contractor confidence that DOD will not terminate an MYP contract and
that the multiyear stream of business consequently will materialize:
• For a program to qualify for MYP, DOD must certify, among other things, that
the minimum need for the items to be purchased is expected to remain
substantially unchanged during the contract in terms of production rate,
procurement rate, and total quantities.
• Perhaps more important to the contractor, MYP contracts include a cancellation
penalty intended to reimburse a contractor for costs that the contractor has
incurred (i.e., investments the contractor has made) in anticipation of the work
covered under the MYP contract. The undesirability of paying a cancellation
penalty acts as a disincentive for the government against canceling the contract.
(And if the contract is canceled, the cancellation penalty helps to make the
contractor whole.11)
Permanent Statute Governing MYP
Is there a permanent statute governing MYP contracting? There is a permanent statute
governing MYP contracting—10 U.S.C. 3501 (the text of which was previously codified at 10
U.S.C. 2306b).12 The statute was created by Section 909 of the FY1982 Department of Defense
Authorization Act (S. 815/P.L. 97-86 of December 1, 1981), revised and reorganized by Section
1022 of the Federal Acquisition Streamlining Act of 1994 (S. 1587/P.L. 103-355 of October 13,
1994), and further amended on several occasions since.13 For the text of 10 U.S.C. 3501, see
Appendix A.
Under this statute, what criteria must a program meet to qualify for MYP? 10 U.S.C. 3501
states that to qualify for MYP, a program must meet several criteria, including the following:

stable time horizon for planning and investing in production and by attracting subcontractors,
vendors, and suppliers. However, multiyear procurement also entails certain risks that must be
balanced against potential benefits, such as the increased costs to the government should the
multiyear contract be changed or canceled and decreased annual budget flexibility for the program
and across DOD’s portfolio of weapon systems. Additionally, multiyear contracts often require
greater budgetary authority in the earlier years of the procurement to economically buy parts and
materials for multiple years of production than under a series of annual buys.
Government Accountability Office, Defense Acquisitions[:] DOD’s Practices and Processes for Multiyear
Procurement Should Be Improved, GAO-08-298, February 2008, pp. 4-5.
11 Annual contracts can also include cancellation penalties.
12 A codification note for 10 U.S.C. 3501 states
Pub. L. 116–283, §1822(b)–(l), which had initially directed the transfers of various subsections of
section 2306b of this title [i.e., Title 10] to sections 3501 to 3511, was amended by Pub. L. 117–81,
§1701(k)(2), by striking out subsecs. (b) to (l) and adding a new subsec. (b). After that amendment,
such transfers were no longer directed. Instead, Pub. L. 116–283, §1822(b), as added by Pub. L.
117–81, directed the transfer of section 2306b of this title in its entirety to this section, thereby
omitting what would have been sections 3502 to 3511 of this title. The transfer of section 2306b to
this section was executed by transferring the text only of section 2306b, as the section designation
and catchline had already been enacted by Pub. L. 116–283, §1822(a), as amended by Pub. L. 117–
81, §1701(k)(1)(B).
13 For additional discussion of the legislative origin of MYP, see Congressional Budget Office, Alternative Strategies
for Increasing Multiyear Procurement, Staff Working Paper, pp. 10-12, accessed October 15, 2020, at
https://www.cbo.gov/sites/default/files/99th-congress-1985-1986/reports/doc16a_2.pdf, and David R. Sutton, Miltiyear
Procurement: A Desktop Guide, Naval Postgraduate School thesis, June 1997, pp. 7-10, accessed October 15, 2020, at
https://calhoun.nps.edu/bitstream/handle/10945/8709/multiyearprocure00sutt.pdf.
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• Significant savings or necessary industrial base stability. DOD must estimate
that using an MYP contract would result in either “significant savings” compared
with using annual contracting or “necessary defense industrial base stability not
otherwise achievable” through annual contracting.
• Realistic cost estimates. DOD’s estimates of the cost of the MYP contract and
the anticipated savings must be realistic.
• Stable need for the items. DOD must expect that its minimum need for the
items will remain substantially unchanged during the contract in terms of
production rate, procurement rate, and total quantities.
• Stable design for the items. The design for the items to be acquired must be
stable, and the technical risks associated with the items must not be excessive.
10 U.S.C. 3501 includes provisions requiring the Secretary of Defense or certain other DOD
officials to find, determine, or certify that these and other statutory requirements for using MYP
contracts have been met, and provisions requiring the heads of DOD agencies to provide written
notifications of certain things to the congressional defense committees 30 days before awarding
or initiating an MYP contract, or 10 days before terminating one. 10 U.S.C. 3501 also requires
DOD MYP contracts to be fixed-price type contracts.
Criterion of “necessary industrial base stability.” The criterion of “necessary defense industrial
base stability not otherwise achievable” through annual contracting was added by Section 820 of
the FY2024 National Defense Authorization Act (NDAA) (H.R. 2670/P.L. 118-31 of December
22, 2023). The provision originated as Section 801 of the Senate-passed version of the FY2024
NDAA (S. 2226). The Senate Armed Services Committee’s report on S. 2226 (S.Rept. 118-58 of
July 12, 2023) stated
In section 1244 of the James M. Inhofe National Defense Authorization Act for Fiscal Year
2023 (Public Law 117–263), the committee authorized the use of multiyear procurements
for a number of munitions related to refilling stocks used in the Ukraine conflict and to
strengthen the readiness of U.S. forces. The committee notes with concern that this
authority has not been fully utilized for a number of munitions on the list due to limited
projected cost savings achieved through a multiyear contract versus single year contracts.
The committee believes the use of multiyear contracts offer more advantages than only
cost savings. These contracts can also provide a clear demand signal to industry, which
helps industry plan labor and material needs more effectively, and can better position it to
meet the demands of U.S. requirements. Therefore, the committee believes the Department
of Defense should factor in industrial base concerns as well as projected cost savings when
considering the use of multiyear contracts. (Page 181)
What is meant by “significant savings”? The amount of savings required under 10 U.S.C. 3501
to qualify for using an MYP contract has changed over time; the requirement was changed from
“substantial savings” to “significant savings” by Section 811 of the FY2016 NDAA (S. 1356/P.L.
114-92 of November 25, 2015).14 The joint explanatory statement for the FY2016 NDAA states
the following regarding Section 811 (emphasis added):
Amendment relating to multiyear contract authority for acquisition of property (sec. 811)

14 For a discussion of the earlier evolution of the savings requirement under 10 U.S.C. 3501, including a figure
graphically summarizing the legislative history of the requirement, see Government Accountability Office, Defense
Acquisitions[:] DOD’s Practices and Processes for Multiyear Procurement Should Be Improved, GAO-08-298,
February 2008, pp. 21-22, including Figure 3 on p. 22.
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The House bill contained a provision (sec. 806) that would strike the existing requirement
that the head of an agency must determine that substantial savings would be achieved
before entering into a multiyear contract.
The Senate amendment contained no similar provision.
The Senate recedes with an amendment that would require that significant savings would
be achieved before entering into a multiyear contract.
The conferees agree that the government should seek to maximize savings whenever it
pursues multiyear procurement. However, the conferees also agree that significant
savings (estimated to be greater than $250.0 million), and other benefits, may be
achieved even if it does not equate to a minimum of 10 percent savings over the cost of an
annual contract. The conferees expect a request for authority to enter into a multiyear
contract will include (1) the estimated cost savings, (2) the minimum quantity needed, (3)
confirmation that the design is stable and the technical risks are not excessive, and (4) any
other rationale for entering into such a contract.15
In addition, 10 U.S.C. 3501 states the following:
If for any fiscal year a multiyear contract to be entered into under this section is authorized
by law for a particular procurement program and that authorization is subject to certain
conditions established by law (including a condition as to cost savings to be achieved under
the multiyear contract in comparison to specified other contracts) and if it appears (after
negotiations with contractors) that such savings cannot be achieved, but that significant
savings could nevertheless be achieved through the use of a multiyear contract rather than
specified other contracts, the President may submit to Congress a request for relief from
the specified cost savings that must be achieved through multiyear contracting for that
program. Any such request by the President shall include details about the request for a
multiyear contract, including details about the negotiated contract terms and conditions.16
What is meant by “stable design”? The term “stable design” is generally understood to mean that
the design for the items to be procured is not expected to change substantially during the period
of the contract. Having a stable design is generally demonstrated by having already built at least a
few items to that design (or in the case of a shipbuilding program, at least one ship to that design)
and concluding, through testing and operation of those items, that the design does not require any
substantial changes during the period of the contract.
Potential Consequences of Not Fully Funding an MYP Contract
What happens if Congress does not provide the annual funding requested by DOD to continue
the implementation of the contract? If Congress does not provide the funding requested by DOD
to continue the implementation of an MYP contract, DOD would be required to renegotiate,
suspend, or terminate the contract. Terminating the contract could require the government to pay
a cancellation penalty to the contractor. Renegotiating or suspending the contract could also have
a financial impact.

15 Joint explanatory statement for H.R. 1735, the FY2016 NDAA, page 126 (PDF page 127 of 542). H.R. 1735 was
vetoed by the President. A revised FY2016 NDAA, S. 1356, was then passed and enacted into law. There was no new
joint explanatory statement for S. 1356. For the parts of S. 1356 that were unchanged from H.R. 1735, the joint
explanatory statement for H.R. 1735 in effect serves as the joint explanatory statement for S. 1356.
16 10 U.S.C. 3501, subsection (i)(4).
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Effect on Flexibility for Making Procurement Changes
What effect does using MYP have on flexibility for making procurement changes? A principal
potential disadvantage of using MYP is that it can reduce Congress’s and DOD’s flexibility for
making changes (especially reductions) in procurement programs in future years in response to
changing strategic or budgetary circumstances, at least without incurring cancellation penalties.
In general, the greater the portion of DOD’s procurement account that is executed under MYP
contracts, the greater the potential loss of flexibility. The use of MYP for executing some portion
of the DOD procurement account means that if policymakers in future years decide to reduce
procurement spending below previously planned levels, the spending reduction might fall more
heavily on procurement programs that do not use MYP, which in turn might result in a less-than-
optimally balanced DOD procurement effort.
Congressional Approval
How does Congress approve the use of MYP? Congress approves the use of MYP on a case-by-
case basis, typically in response to requests by DOD.17 Congressional approval for DOD MYP
contracts with a value of more than $500 million must occur in two places: an annual DOD
appropriations act18 and an act other than the annual DOD appropriations act.19
In annual DOD appropriations acts, the provision permitting the use of MYP for one or more
defense acquisition programs is typically included in the title containing general provisions,
which typically is Title VIII. As shown in the tables in Appendix B, since FY2011, it has been
Section 8010.
An NDAA is usually the act other than an appropriations act in which provisions granting
authority for using MYP contracting on individual defense acquisition programs are included.
Such provisions typically occur in Title I of the NDAA, the title covering procurement programs.
Provisions in which Congress approves the use of MYP for a particular defense acquisition
program may include specific conditions for that program in addition to the requirements and
conditions of 10 U.S.C. 3501.
Frequency of Use of MYP
How often is MYP used? MYP is used for a limited number of DOD acquisition programs. As
shown in the Appendix B, annual DOD appropriations acts since FY1990 typically have
approved the use of MYP for zero to a few DOD programs each year. A 2008 Government
Accountability Office (GAO) report stated the following:
Although DOD had been entering into multiyear contracts on a limited basis prior to the
1980s, the Department of Defense Authorization Act, [for fiscal year] 1982,20 codified the
authority for DOD to procure on a multiyear basis major weapon systems that meet certain
criteria. Since that time, DOD has annually submitted various weapon systems as multiyear
procurement candidates for congressional authorization. Over the past 25 years, Congress

17 The Anti-Deficiency Act (31 U.S.C. 1341) prohibits the making of contracts in advance of appropriations. A
multiple-year commitment may be made when authorized by Congress by entering into a firm commitment for one
year and making the government’s liability for future years contingent on funds becoming available.
18 10 U.S.C. 3501, subsection (l)(3).
19 10 U.S.C. 3501, subsection (i)(1).
20 S. 815/P.L. 97-86 of December 1, 1981, §909.
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has authorized the use of multiyear procurement for approximately 140 acquisition
programs, including some systems approved more than once.21
Block Buy Contracting (BBC)
BBC in Brief
What is BBC, and how does it compare to MYP? BBC is similar to MYP in that it permits DOD
to use a single contract for more than one year’s worth of procurement of a given kind of item
without having to exercise a contract option for each year after the first year.22 BBC is also
similar to MYP in that DOD needs congressional approval for each use of BBC.
BBC differs from MYP in the following ways:
• There is no permanent statute governing the use of BBC.
• There is no requirement that BBC be approved in both a DOD appropriations act
and an act other than a DOD appropriations act.
• Programs being considered for BBC do not need to meet any legal criteria to
qualify for BBC, because there is no permanent statute governing the use of BBC
that establishes such criteria.
• A BBC contract can cover more than five years of planned procurements.
• Economic order quantity (EOQ) authority—the authority to bring forward
selected key components of the items to be procured under the contract and
purchase the components in batch form during the first year or two of the
contract—does not come automatically as part of BBC authority (as it does with
MYP authority), because there is no permanent statute governing the use of BBC
that includes EOQ authority as an automatic feature. For EOQ to be part of a
block buy contract, the legislative provision authorizing the block contract must
explicitly include authority for using EOQ.
• BBC contracts are less likely to include cancellation penalties.
Given the one key similarity between BBC and MYP (the use of a single contract for more than
one year’s worth of procurement), and the various differences between BBC and MYP, BBC
might be thought of as a less formal stepchild of MYP.
When and why was BBC invented? BBC was invented by Section 121(b) of the FY1998 NDAA
(H.R. 1119/P.L. 105-85 of November 18, 1997), which granted the Navy the authority to use a
single contract for the procurement of the first four Virginia (SSN-774) class attack submarines.
The 4 boats were scheduled to be procured during the five-year period FY1998-FY2002 in annual
quantities of 1-1-0-1-1. Congress provided the authority granted in Section 121(b) at least in part
to reduce the combined procurement cost of the four submarines. Using MYP was not an option
for the Virginia-class program at that time because the Navy had not even begun, let alone

21 Government Accountability Office, Defense Acquisitions[:] DOD’s Practices and Processes for Multiyear
Procurement Should Be Improved, GAO-08-298, February 2008, p. 5.
22 Using the hypothetical example introduced earlier involving the procurement of 20 aircraft over the five-year period
FY2024-FY2028, DOD would follow the same general path as it would under MYP: DOD would issue one contract
covering all 20 aircraft in FY2024, at the beginning of the five-year period, following congressional approval to use
BBC for the program, and congressional appropriation of the FY2024 funding for the program. To continue the
implementation of the contract over the next four years, DOD would request the FY2025 funding for the program as
part of DOD’s proposed FY2025 budget, the FY2026 funding as part of DOD’s proposed FY2026 budget, and so on.
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finished, construction of the first Virginia-class submarine, and consequently could not
demonstrate that it had a stable design for the program.
When Section 121(b) was enacted, there was no name for the contracting authority it provided.
The term block buy contracting came into use later, when observers needed a term to refer to the
kind of contracting authority that Congress authorized in Section 121(b). As discussed in the next
section, this can cause confusion, because the term block buy was already being used in
discussions of DOD acquisition to refer to something else.
Terminology Alert: Block Buy Contracting vs. Block Buys
What’s the difference between block buy contracting and block buys? In discussions of defense
procurement, the term “block buy” by itself (without “contracting” at the end) has sometimes
been used to refer to something quite different from block buy contracting—namely, the simple
act of funding the procurement of more than one copy of an item in a single year, particularly
when no more than one item of that kind might normally be funded in a single year. For example,
when Congress funded the procurement of two aircraft carriers in FY1983, and another two in
FY1988, these acts were each referred to as block buys, because aircraft carriers are normally
procured one at a time, several years apart from one another. This alternate meaning of the term
block buy predates by many years the emergence of the term block buy contracting.
The term block buy is still used in this alternate manner, which can lead to confusion in
discussions of defense procurement. For example, for FY2017, the Air Force requested funding
for procuring five Evolved Expendable Launch Vehicles (EELVs) for its EELV Launch Services
(ELS) program, and sometimes referred to this as a block buy.
At the same time, Navy officials sometimes refer to the use of block buy contracts for the first
four Virginia-class submarines, and in the LCS program, as block buys, when they might be more
specifically referred to as instances of block buy contracting.
Potential Savings Under BBC
How much can BBC save, compared with MYP? BBC can reduce the unit procurement costs of
ships by amounts less than or perhaps comparable to those of MYP, if the authority granted for
using BBC explicitly includes authority for making economic order quantity (EOQ) purchases of
components. If the authority granted for using BBC does not explicitly include authority for
making EOQ purchases, then the savings from BBC will be less. Potential savings under BBC
might also be less than those under MYP if the BBC contract does not include a cancellation
penalty, or includes one that is more limited than typically found in an MYP contract, because
this might give the contractor less confidence than would be the case under an MYP contract that
the future stream of business will materialize as planned, which in turn might reduce the amount
of money the contractor invests to optimize its workforce and production facilities for producing
the items to be procured under the contract.
Frequency of Use of BBC
How frequently has BBC been used? Since its use at the start of the Virginia-class program,
BBC has been used very rarely. The Navy did not use it again in a shipbuilding program until
December 2010, when it awarded two block buy contracts, each covering 10 LCSs to be procured
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over the six-year period FY2010-FY2015, to the two LCS builders.23 (Each contract was later
amended to include an 11th ship in FY2016, making for a total of 22 ships under the two
contracts.) A third example is the John Lewis (TAO-205) class oiler program, in which the Navy
used a block buy contract to procure the first six ships in the program.24 A fourth example are the
two Gerald R. Ford (CVN-78) class aircraft carriers CVN-80 and CVN-81, which were procured
as a two-ship block buy (although the Navy generally refers to it simply as a two-ship buy, rather
than as a two-ship block buy).25
An additional example, arguably, is the Air Force’s KC-46 aerial refueling tanker program, which
employed a fixed price incentive fee (FPIF) development contract that included a “back end”
commitment to procure certain minimum numbers of KC-46s in certain fiscal years.26
Using BBC Rather than MYP
When might BBC be suitable as an alternative to MYP? BBC might be particularly suitable as
an alternative to MYP in cases where using a multiyear contract can reduce costs, but the program
in question cannot meet all the statutory criteria needed to qualify for MYP. As shown in the case
of the first four Virginia-class boats, this can occur at or near the start of a procurement program,
when design stability has not been demonstrated through the production of at least a few of the
items to be procured (or, for a shipbuilding program, at least one ship).
MYP and BBC vs. Contracts with Options
What is the difference between an MYP or block buy contract and a contract with options? The
military services sometimes use contracts with options to procure multiple copies of an item that
are procured over a period of several years. The Navy, for example, used a contract with options
to procure Lewis and Clark (TAKE-1) class dry cargo ships that were procured over a period of
several years. A contract with options can be viewed as somewhat similar to an MYP or block
buy contract in that a single contract is used to procure several years’ worth of procurement of a
given kind of item.
There is, however, a key difference between an MYP or block buy contract and a contract with
options: In a contract with options, the service is under no obligation to exercise any of the
options, and a service can choose to not exercise an option without having to make a penalty
payment to the contractor. In contrast, in an MYP or block buy contract, the service is under an
obligation to continue implementing the contract beyond the first year, provided that Congress
appropriates the necessary funds. If the service chooses to terminate an MYP or block buy
contract, and does so as a termination for government convenience rather than as a termination
for contractor default, then the contractor can, under the contract’s termination for convenience
clause, seek a payment from the government for cost incurred for work that is complete or in
process at the time of termination, and may include the cost of some of the investments made in
anticipation of the MYP or block buy contract being fully implemented. The contractor can do

23 For further discussion, see CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and
Issues for Congress, by Ronald O'Rourke.
24 For further discussion, see CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program:
Background and Issues for Congress, by Ronald O'Rourke.
25 For more on the CVN-78 class program, see CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier
Program: Background and Issues for Congress, by Ronald O'Rourke.
26 For more on the KC-46 program, see CRS Report RL34398, Air Force KC-46A Pegasus Tanker Aircraft Program,
coordinated by John R. Hoehn.
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this even if the MYP or block buy contract does not elsewhere include a provision for a
cancellation penalty.27
As a result of this key difference, although a contract with options looks like a multiyear contract,
it operates more like a series of annual contracts, and it cannot achieve the kinds of savings that
are possible under MYP and BBC.
Issues for Congress
Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in
the future more frequently, less frequently, or about as frequently as they are currently used; and
whether to create a permanent statute to govern the use of BBC, analogous to the permanent
statute that governs the use of MYP.
Frequency of Using MYP and BBC
Overview
Should MYP and BBC in the future be used more frequently, less frequently, or about as
frequently as they are currently used? Supporters of using MYP and BBC more frequently in the
future might argue the following:
• Since MYP and BBC can reduce procurement costs, making greater use of MYP
and BBC can help DOD get more value out of its available procurement funding.
This can be particularly important if DOD’s budget in real (i.e., inflation-
adjusted) terms remains flat or declines in coming years.
• The risks of using MYP have been reduced by Section 811 of the FY2008 NDAA
(H.R. 4986/P.L. 110-181 of January 28, 2008), which amended what is now 10
U.S.C. 3501 to strengthen the process for ensuring that programs proposed for
MYP meet certain criteria (see “Permanent Statute Governing MYP”).
Supporters of using MYP and BBC less frequently in the future, or at least no more frequently
than now, might argue the following:
• Using MYP and BBC more frequently would further reduce Congress’s and
DOD’s flexibility for making changes in DOD procurement programs in future
years in response to changing strategic or budgetary circumstances.
• Since actual savings from using MYP and BBC rather than annual contracting
can be difficult to observe or verify, it is not clear that the financial benefits of
using MYP or BBC more frequently in the future would be worth the resulting
further reduction in Congress’s and DOD’s flexibility for making changes in
procurement programs in future years in response to changing strategic or
budgetary circumstances.

27 Source: Telephone discussion with Elliott Branch, Deputy Assistant Secretary of the Navy for Acquisition &
Procurement, October 3, 2011, and email from Navy Office of legislative Affairs, October 11, 2011. Under the
termination for convenience clause, the contractor can submit a settlement proposal to the service, which would
become the basis for a negotiation between the contractor and the service on the amount of the payment.
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Interest in Using Multiyear Contracting for Procuring Munitions
The war in Ukraine heightened interest among Members of Congress, DOD officials, industry
officials, and other observers in making increased use of multiyear contracting for procuring
munitions, particularly so as to encourage munitions makers to make investments for expanding
their production facilities for supporting increased annual procurement rates.28 Section 1244(c) of
the FY2023 NDAA (H.R. 7776/P.L. 117-263 of December 23, 2022) provided authority for using
multiyear contracting for the following munitions:
• 864,000 XM1128, XM1113, M107, and M795 155mm artillery shells;
• 12,000 AGM-179 Joint Air-to-Ground Missiles (JAGMs);
• 700 M142 High Mobility Artillery Rocket Systems (HIMARS);
• 1,700 MGM-140 Army Tactical Missile Systems (ATACMS);
• 2,600 Harpoon anti-ship cruise missiles;
• 1,250 Naval Strike Missiles (NSMs) (anti-ship missiles);
• 106,000 Guided Multiple Launch Rocket Systems (GMLRS);
• 3,850 PATRIOT Advanced Capability-3 (PAC-3) Missile Segment Enhancement
(MSE);
• 5,600 FIM-92 Stinger air defense missiles;
• 28,300 FGM-148 Javelin anti-tank missiles;
• 5,100 AIM-120 Advanced Medium-Range Air-to-Air Missiles (AMRAAMs);
• 2,250,000 Modular Artillery Charge System (MACS);
• 12,050 155m Excalibur M982A1 artillery shells;
• 950 Long Range Anti-Ship Missiles (LRASMs);
• 3,100 Joint Air-to-Surface Standoff Missiles (JASSMs);
• 1,500 Standard Missle-6 (SM-6) surface-to-air missiles; and
• 5,100 Sidewinder Missiles (AIM-9X) air-to-air missiles.

28 See Stephen Losey, “Gen. CQ Brown: Multiyear Missile Buys Would Stabilize Industry,” Defense News, June 7,
2023; Joe Gould, “Army to Seek Multiyear Munitions Buys in Next Budget,” Defense News, March 3, 2023;
Mackenzie Eaglen and Bill Greenwalt, “The Army’s Multiyear Contracts Are a Model for Other Services,” Defense
News, February 3, 2023; Rich Abott, “Navy Looks To Expand Naval Strike Missile Production For Multiyear
Procurement,” Defense Daily, December 13, 2022; Nick Wilson, “Navy Signals Interest in Multiyear Procurement for
Naval Strike Missiles,” Inside Defense, December 12, 2022; Jen Judson, “US Army Weighs Multiyear Contracts for
Munitions to Aid Ukraine,” Defense News, November 21, 2022; Matthew Beinart, “Army Acquisition Chief Cites
Munitions That Could ‘Potentially’ Benefit From Multi-Year Buy Authorities,” Defense Daily, November 22, 2022;
Lee Hudson, “Raytheon Backs Multiyear Buy for Munitions, CFO says,” Politico Pro, November 8, 2022; Joe Gould,
“Congress Poised to Back Multiyear Weapons Purchases, LaPlante Says,” Defense News, November 7, 2022; Matthew
Beinart, “Congress Will Support Authority For Multi-Year Munitions Procurements, LaPlante Says,” Defense Daily,
November 7, 2022; Brian Everstine, “Top U.S. Navy Officer Calls For Multiyear Weapons Procurement,” Aviation
Week, October 19, 2022; John Ferrari, “Four Steps the Pentagon Can Take to Fix the Munitions Industrial Base,” The
Hill, October 17, 2022; Andrew Eversden, “Army Acquisition Chief ‘Not Uncomfortable’ with US Stockpiles,
Considers Multi-Year Deals,” Breaking Defense, September 14, 2022; Mackenzie Eaglen and Bill Greenwalt,
“Multiyear Contracts Could Solve Plenty of Pentagon Problems,” Defense News, September 28, 2022; Marcus
Weisgerber, “US Should Place Multiyear Munitions Orders to Protect Supply, Pentagon Arms Chief Says,” Defense
One, September 7, 2022; Lee Hudson, “LaPlante Wants Multiyear Contracts for Missiles,” Politico Pro, September 7,
2022.
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Regarding Section 1244(c), the joint explanatory statement for H.R. 7776/P.L. 117-263 states
(emphasis added)
We recognize that the Department of Defense (DOD) would benefit from temporary
acquisition flexibilities to increase the Department’s stocks of critical munitions, provide
material and related services to allies and partners that have supported Ukraine, and provide
material and services to Ukraine. We also support enabling the Secretary of Defense to
enter into cooperative acquisition agreements through the North Atlantic Treaty
Organization (NATO) Support and Procurement Organization. Finally, we believe
providing multi-year procurement authority for certain munitions programs is
essential to increase the Department’s stocks of such munitions, improve warfighting
readiness, provide the defense industrial base with predictable production
opportunities and firm contractual commitments, ensure consistent funding across
the Department’s Future Years Defense Program, increase and expand defense
industrial capacity, and coordinate the timing and funding for capital expenditures
with defense contractors. (PDF page 295 of 748)
Adequacy of Information Submitted for MYP Contracts
Do the military services submit to Congress adequate information regarding MYP contracts?
An August 2022 GAO report addressing this question in relation to Navy MYP contracts stated
The Navy used multiyear procurement—a special method to contract for multiple years of
requirements in a single contract—for seven critical weapon system programs in fiscal
years 2021 and 2022. This contracting method can save the government money through
procurement efficiencies but can include future financial commitments. GAO reviewed the
seven programs and found that the budget requests for three programs included quantity
reductions when compared to their multiyear contracts or previous Navy plans. This
hampered their efforts to meet warfighting needs:
• DDG 51 destroyers. The budget request for fiscal year 2022 included funds to procure
one of the two ships in the program’s multiyear contracts. Instead of requesting funding
for the second ship, the Navy requested $33 million to cover the government’s cancellation
liability for reducing its procurement to one ship in fiscal year 2022.
• V-22 aircraft. The budget request for fiscal year 2022 included funds to procure eight of
the 11 aircraft in the program’s multiyear contract for the budget year. The Navy used
additional aircraft funded but not procured in fiscal year 2021 to offset the reduced request
and meet the stated contract quantity for fiscal year 2022.
• Virginia class submarines. The budget request in fiscal year 2021 included funding for
one submarine. This met the multiyear contract quantity but departed from previous
multiyear procurement plans, the steady practice of procuring two of the submarines each
year, and congressional direction.
Navy officials told GAO that affordability was the primary driver leading to the reduction
in quantities requested for DDG 51 and V-22 in the fiscal year 2022 budget. However,
GAO found that Department of Defense financial management regulation does not require
the Navy to notify the congressional defense committees of its rationale for budget
decisions that do not support the procurement quantities stated in multiyear contracts. The
lack of such notification can hamper the ability of the committees to oversee programs and
make decisions without having to request supplemental information and explanations from
the Navy.
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The Navy included additional quantities for the DDG 51, V-22, and Virginia class
programs in unfunded priorities lists provided to the defense committees. Congress
ultimately decided to fund the procurement of additional quantities.29
Permanent Statute for BBC
Should Congress create a permanent statute to govern the use of BBC, analogous to the
permanent statute (10 U.S.C. 3501) that governs the use of MYP? Supporters of creating a
permanent statute to govern the use of BBC might argue the following:
• Such a statute could encourage greater use of BBC, and thereby increase savings
in DOD procurement programs by giving BBC contracting a formal legal
standing and by establishing a clear process for DOD program managers to use in
assessing whether their programs might be considered suitable for BBC.
• Such a statute could make BBC more advantageous by including a provision that
automatically grants EOQ authority to programs using BBC, as well as
provisions establishing qualifying criteria and other conditions intended to reduce
the risks of using BBC.
Opponents of creating a permanent statute to govern the use of BBC might argue the following:
• A key advantage of BBC is that it is not governed by a permanent statute. The
lack of such a statute gives DOD and Congress full flexibility in determining
when and how to use BBC for programs that may not qualify for MYP, but for
which a multiyear contract of some kind might produce significant savings.
• Such a statute could encourage DOD program managers to pursue their programs
using BBC rather than MYP. This could reduce discipline in DOD multiyear
contracting if the qualifying criteria in the BBC statute are less demanding than
the qualifying criteria in 10 U.S.C. 3501.
Coast Guard Use of MYP and BBC
Should the Coast Guard should begin making use of MYP and BBC? Although the Coast Guard
is part of the Department of Homeland Security (DHS), the Coast Guard is a military service and
a branch of the U.S. Armed Forces at all times (14 U.S.C. 101), and 10 U.S.C. 3501 provides
authority for using MYP not only to DOD, but also to the Coast Guard (and the National
Aeronautics and Space Administration as well). In addition, Section 311 of the Frank LoBiondo
Coast Guard Authorization Act of 2018 (S. 140/P.L. 115-282 of December 4, 2018) provides
permanent authority for the Coast Guard to use block buy contracting with EOQ purchases of
components in major acquisition programs. The authority is now codified at 14 U.S.C. 1137.
The Navy in recent years has made extensive use of MYP and BBC in its ship and aircraft
acquisition programs. The Coast Guard, like the Navy, procures ships and aircraft. In contrast to
the Navy, however, the Coast Guard has never used MYP or BBC in its ship or aircraft
acquisition programs. Instead, the Coast has tended to use contracts with options. As discussed
earlier, although a contract with options looks like a multiyear contract, it operates more like a
series of annual contracts, and it cannot achieve the kinds of savings that are possible under MYP
and BBC. CRS in recent years has testified and reported on the possibility of using BBC or MYP

29 Government Accountability Office, Multiyear Procurement[:] Navy Should Provide Congress More Complete
Information on Budget Request Decisions, GAO-22-105966, August 2022, Highlights page.
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in Coast Guard ship acquisition programs, particularly the Coast Guard’s 25-ship Offshore Patrol
Cutter (OPC) program and the Coast Guard’s three-ship polar icebreaker program.30
Legislative Activity for FY2025
Proposals for MYP and Block Buy Contracts in DOD’s FY2025
Budget Submission
DOD’s FY2025 budget submission requested continued funding for implementing several MYP
contracts initiated in fiscal years prior to FY2025, and highlights the following proposed new
MYP and block buy contracts that would begin in FY2025:
• a five-year (FY2025-FY2029) MYP contract for CH-53K King Stallion heavy
lift helicopter engines, to be procured by the Department of the Navy for use by
the Marine Corps, and
• a two-year (FY2025-FY2026) block buy contract for CH-53K King Stallion
heavy lift helicopter airframes, to be procured by the Department of the Navy for
use by the Marine Corps.
FY2025 National Defense Authorization Act (H.R. 8070)
House
In H.R. 8070 as reported by the House Armed Services Committee (H.Rept. 118-529 of May 31,
2024) and passed by the House on June 14, 2024:
• Section 133 would provide authority for an MYP contract for CH–53K
helicopters and T408 engines for CH-53K helicopters.
• Section 809A would direct DOD, in coordination with the Office of Management
and Budget (OMB) and GAO, to include in each year’s budget submission an
annex with recommendations on priority items in the areas of shipbuilding,
fighter aircraft, submarines, ground vehicle systems, unmanned aerial systems
(UASs), and goods needed to address supply chain disruptions and constraints for
DOD that could be considered under an MYP contract covering more than one
but less than three years that were not considered as such in the budget
submission, and the rationale excluding such priority items from the budget
submission.
• Section 1058 would direct the Navy to submit a report on the price elasticity of
the labor supply for the industrial base for building and maintaining naval vessels
that is to include, among other things, an assessment of and recommendation for
any extraordinary relief that may be appropriate for fixed-price, MYP contracts
for Virginia-class submarines in order to increase pay and benefits for workers at
shipyards and supplier firms under those contracts.

30 For additional discussion, see CRS Testimony TE10004, The Status of Coast Guard Cutter Acquisition Programs, by
Ronald O'Rourke; CRS Report R42567, Coast Guard Cutter Procurement: Background and Issues for Congress, by
Ronald O'Rourke; and CRS Report RL34391, Coast Guard Polar Security Cutter (Polar Icebreaker) Program:
Background and Issues for Congress, by Ronald O'Rourke.
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H.Rept. 118-529 states:
F–15EX multiyear procurement strategy implementation
The committee notes that the U.S. Air Force’s tactical fighter capacity is currently
insufficient to meet combatant commander warfighting requirements. It is imprudent to
prematurely curtail F–15EX aircraft production and rely upon a single tactical fighter
manufacturing production line during a time of diminishing tactical fighter aircraft capacity
in the fleet. The committee notes that the use of multi-year procurement (MYP) contracts
offers more advantages than only cost savings. MYPs also provide a clear demand signal
to industry and more efficiently position manufacturers to meet the demands of the
military. Such a MYP contract could drive additional stability and predictability into the
F–15EX supply chain and drive significant cost savings. The committee encourages the
Secretary of the Air Force to consider utilizing a MYP for future F–15EX procurement.
(Page 33)
FY2025 DOD Appropriations Act (H.R. 8774)
House
In H.R. 8774 as reported by the House Appropriations Committee (H.Rept. 118-557 of June 17,
2024) and passed by the House on June 28, 2024:
• Section 8010, a recurring provision that provides limitations and conditions on
the use of funds to initiate MYP contracts, would provide authority for MYP
contracts for CH-53K helicopters and Virginia-class submarines.

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Appendix A. Text of 10 U.S.C. 3501
The text of 10 U.S.C. 3501 (which was previously codified at 10 U.S.C. 2306b)31 as of April 24,
2024, is as follows:
§3501. Multiyear contracts: acquisition of property
(a) In General.-To the extent that funds are otherwise available for obligation, the head of
an agency may enter into multiyear contracts for the purchase of property whenever the
head of that agency finds each of the following:
(1) That the use of such a contract will result in-
(A) significant savings of the total anticipated costs of carrying out the program through
annual contracts; or
(B) necessary defense industrial base stability not otherwise achievable through annual
contracts.
(2) That the minimum need for the property to be purchased is expected to remain
substantially unchanged during the contemplated contract period in terms of production
rate, procurement rate, and total quantities.
(3) That there is a reasonable expectation that throughout the contemplated contract period
the head of the agency will request funding for the contract at the level required to avoid
contract cancellation.
(4) That there is a stable design for the property to be acquired and that the technical risks
associated with such property are not excessive.
(5) That the estimates of both the cost of the contract and the anticipated cost avoidance
through the use of a multiyear contract are realistic.
(6) In the case of a purchase by the Department of Defense, that the use of such a contract
will promote the national security of the United States.
(7) In the case of a contract in an amount equal to or greater than $500,000,000, that the
conditions required by subparagraphs (C) through (F) of subsection (i)(3) will be met, in
accordance with the Secretary’s certification and determination under such subsection, by
such contract.
(b) Regulations.-(1) Each official named in paragraph (2) shall prescribe acquisition
regulations for the agency or agencies under the jurisdiction of such official to promote the
use of multiyear contracting as authorized by subsection (a) in a manner that will allow the
most efficient use of multiyear contracting.
(2)(A) The Secretary of Defense shall prescribe the regulations applicable to the
Department of Defense.

31 A codification note for 10 U.S.C. 3501 states
Pub. L. 116–283, §1822(b)–(l), which had initially directed the transfers of various subsections of
section 2306b of this title [i.e., Title 10] to sections 3501 to 3511, was amended by Pub. L. 117–81,
§1701(k)(2), by striking out subsecs. (b) to (l) and adding a new subsec. (b). After that amendment,
such transfers were no longer directed. Instead, Pub. L. 116–283, §1822(b), as added by Pub. L.
117–81, directed the transfer of section 2306b of this title in its entirety to this section, thereby
omitting what would have been sections 3502 to 3511 of this title. The transfer of section 2306b to
this section was executed by transferring the text only of section 2306b, as the section designation
and catchline had already been enacted by Pub. L. 116–283, §1822(a), as amended by Pub. L. 117–
81, §1701(k)(1)(B).
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(B) The Secretary of Homeland Security shall prescribe the regulations applicable to the
Coast Guard, except that the regulations prescribed by the Secretary of Defense shall apply
to the Coast Guard when it is operating as a service in the Navy.
(C) The Administrator of the National Aeronautics and Space Administration shall
prescribe the regulations applicable to the National Aeronautics and Space Administration.
(c) Contract Cancellations.-The regulations may provide for cancellation provisions in
multiyear contracts to the extent that such provisions are necessary and in the best interests
of the United States. The 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.
(d) Participation by Subcontractors, Vendors, and Suppliers.-In order to broaden the
defense industrial base, the regulations shall provide that, to the extent practicable-
(1) multiyear contracting under subsection (a) 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
(2) 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.
(e) Protection of Existing Authority.-The regulations shall provide that, to the extent
practicable, the administration of this section, and of the regulations prescribed under this
section, shall not be carried out in a manner to preclude or curtail the existing ability of an
agency-
(1) to provide for competition in the production of items to be delivered under such a
contract; or
(2) to provide for termination of a prime contract the performance of which is deficient
with respect to cost, quality, or schedule.
(f) Cancellation or Termination for Insufficient Funding.-In the event funds are not made
available for the continuation of a contract made under this section into a subsequent fiscal
year, the contract shall be canceled or terminated. The costs of cancellation or termination
may be paid from-
(1) appropriations originally available for the performance of the contract concerned;
(2) appropriations currently available for procurement of the type of property concerned,
and not otherwise obligated; or
(3) funds appropriated for those payments.
(g) Contract Cancellation Ceilings Exceeding $100,000,000.-(1) 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 congressional defense committees, and such contract may not then be
awarded until the end of a period of 30 days beginning on the date of such notification.
(2) In the case of a contract described in subsection (a) with a cancellation ceiling described
in paragraph (1), if the budget for the contract does not include proposed funding for the
costs of contract cancellation up to the cancellation ceiling established in the contract, the
head of the agency concerned shall, as part of the certification required by subsection
(i)(1)(A),1 give written notification to the congressional defense committees of-
(A) the cancellation ceiling amounts planned for each program year in the proposed
multiyear procurement contract, together with the reasons for the amounts planned;
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(B) the extent to which costs of contract cancellation are not included in the budget for the
contract; and
(C) a financial risk assessment of not including budgeting for costs of contract cancellation.
(h) Defense Acquisitions of Weapon Systems.-In the case of the Department of Defense,
the authority under subsection (a) includes authority to enter into the following multiyear
contracts in accordance with this section:
(1) A multiyear contract for the purchase of a weapon system, items and services associated
with a weapon system, and logistics support for a weapon system.
(2) A multiyear contract for advance procurement of components, parts, and materials
necessary to the manufacture of a weapon system, including a multiyear contract for such
advance procurement that is entered into in order to achieve economic-lot purchases and
more efficient production rates.
(i) Defense Acquisitions Specifically Authorized by Law.-(1) In the case of the Department
of Defense, a multiyear contract in an amount equal to or greater than $500,000,000 may
not be entered into under this section unless the contract is specifically authorized by law
in an Act other than an appropriations Act.
(2) In submitting a request for a specific authorization by law to carry out a defense
acquisition program using multiyear contract authority under this section, the Secretary of
Defense shall include in the request a report containing preliminary findings of the agency
head required in paragraphs (1) through (6) of subsection (a), together with the basis for
such findings.
(3) A multiyear contract may not be entered into under this section for a defense acquisition
program that has been specifically authorized by law to be carried out using multiyear
contract authority unless the Secretary of Defense certifies in writing, not later than 30 days
before entry into the contract, that each of the following conditions is satisfied:
(A) The Secretary has determined that each of the requirements in paragraphs (1) through
(6) of subsection (a) will be met by such contract and has provided the basis for such
determination to the congressional defense committees.
(B) The Secretary’s determination under subparagraph (A) was made after completion of
a cost analysis conducted on the basis of section 3226(b) of this title, and the analysis
supports the determination.
(C) The system being acquired pursuant to such contract has not been determined to have
experienced cost growth in excess of the critical cost growth threshold pursuant to section
4374 of this title within 5 years prior to the date the Secretary anticipates such contract (or
a contract for advance procurement entered into consistent with the authorization for such
contract) will be awarded.
(D) A sufficient number of end items of the system being acquired under such contract
have been delivered at or within the most current estimates of the program acquisition unit
cost or procurement unit cost for such system to determine that current estimates of such
unit costs are realistic.
(E) During the fiscal year in which such contract is to be awarded, sufficient funds will be
available to perform the contract in such fiscal year, and the future-years defense program
for such fiscal year will include the funding required to execute the program without
cancellation.
(F) The contract is a fixed price type contract.
(G) The proposed multiyear contract provides for production at not less than minimum
economic rates given the existing tooling and facilities.
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(4) If for any fiscal year a multiyear contract to be entered into under this section is
authorized by law for a particular procurement program and that authorization is subject to
certain conditions established by law (including a condition as to cost savings to be
achieved under the multiyear contract in comparison to specified other contracts) and if it
appears (after negotiations with contractors) that such savings cannot be achieved, but that
significant savings could nevertheless be achieved through the use of a multiyear contract
rather than specified other contracts, the President may submit to Congress a request for
relief from the specified cost savings that must be achieved through multiyear contracting
for that program. Any such request by the President shall include details about the request
for a multiyear contract, including details about the negotiated contract terms and
conditions.
(5)(A) The Secretary may obligate funds for procurement of an end item under a multiyear
contract for the purchase of property only for procurement of a complete and usable end
item.
(B) The Secretary may obligate funds appropriated for any fiscal year for advance
procurement under a contract for the purchase of property only for the procurement of those
long-lead items necessary in order to meet a planned delivery schedule for complete major
end items that are programmed under the contract to be acquired with funds appropriated
for a subsequent fiscal year (including an economic order quantity of such long-lead items
when authorized by law).
(6) The Secretary may make the certification under paragraph (3) notwithstanding the fact
that one or more of the conditions of such certification are not met, if the Secretary
determines that, due to exceptional circumstances, proceeding with a multiyear contract
under this section is in the best interest of the Department of Defense and the Secretary
provides the basis for such determination with the certification.
(7) The Secretary may not delegate the authority to make the certification under paragraph
(3) or the determination under paragraph (6) to an official below the level of Under
Secretary of Defense for Acquisition and Sustainment.
(j) Defense Contract Options for Varying Quantities.-The Secretary of Defense may
instruct the Secretary of the military department concerned to incorporate into a proposed
multiyear contract negotiated priced options for varying the quantities of end items to be
procured over the period of the contract.
(k) Multiyear Contract Defined.-For the purposes of this section, a multiyear contract is a
contract for the purchase of property for more than one, but not more than five, program
years. Such a contract may provide that performance under the contract during the second
and subsequent years of the contract is contingent upon the appropriation of funds and (if
it does so provide) may provide for a cancellation payment to be made to the contractor if
such appropriations are not made.
(l) Various Additional Requirements With Respect to Multiyear Defense Contracts.-(1)(A)
The head of an agency may not initiate a contract described in subparagraph (B) unless the
congressional defense committees are notified of the proposed contract at least 30 days in
advance of the award of the proposed contract.
(B) Subparagraph (A) applies to the following contracts:
(i) A multiyear contract-
(I) that employs economic order quantity procurement in excess of $20,000,000 in any one
year of the contract; or
(II) that includes an unfunded contingent liability in excess of $20,000,000.
(ii) Any contract for advance procurement leading to a multiyear contract that employs
economic order quantity procurement in excess of $20,000,000 in any one year.
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(2) The head of an agency may not initiate a multiyear contract for which the economic
order quantity advance procurement is not funded at least to the limits of the Government’s
liability.
(3) The head of an agency may not initiate a multiyear procurement contract for any system
(or component thereof) if the value of the multiyear contract would exceed $500,000,000
unless authority for the contract is specifically provided in an appropriations Act.
(4) Each report required by paragraph (5) with respect to a contract (or contract extension)
shall contain the following:
(A) The amount of total obligational authority under the contract (or contract extension)
and the percentage that such amount represents of-
(i) the applicable procurement account; and
(ii) the agency procurement total.
(B) The amount of total obligational authority under all multiyear procurements of the
agency concerned (determined without regard to the amount of the multiyear contract (or
contract extension)) under multiyear contracts in effect at the time the report is submitted
and the percentage that such amount represents of-
(i) the applicable procurement account; and
(ii) the agency procurement total.
(C) The amount equal to the sum of the amounts under subparagraphs (A) and (B), and the
percentage that such amount represents of-
(i) the applicable procurement account; and
(ii) the agency procurement total.
(D) The amount of total obligational authority under all Department of Defense multiyear
procurements (determined without regard to the amount of the multiyear contract (or
contract extension)), including any multiyear contract (or contract extension) that has been
authorized by the Congress but not yet entered into, and the percentage that such amount
represents of the procurement accounts of the Department of Defense treated in the
aggregate.
(5) The head of an agency may not enter into a multiyear contract (or extend an existing
multiyear contract), the value of which would exceed $500,000,000 (when entered into or
when extended, as the case may be), until the Secretary of Defense submits to the
congressional defense committees a report containing the information described in
paragraph (4) with respect to the contract (or contract extension).
(6) The head of an agency may not terminate a multiyear procurement contract until 10
days after the date on which notice of the proposed termination is provided to the
congressional defense committees.
(7) The execution of multiyear contracting authority shall require the use of a present value
analysis to determine lowest cost compared to an annual procurement.
(8) This subsection does not apply to the National Aeronautics and Space Administration
or to the Coast Guard.
(9) In this subsection:
(A) The term “applicable procurement account” means, with respect to a multiyear
procurement contract (or contract extension), the appropriation account from which
payments to execute the contract will be made.
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(B) The term “agency procurement total” means the procurement accounts of the agency
entering into a multiyear procurement contract (or contract extension) treated in the
aggregate.
(m) Increased Funding and Reprogramming Requests.-Any request for increased funding
for the procurement of a major system under a multiyear contract authorized under this
section shall be accompanied by an explanation of how the request for increased funding
affects the determinations made by the Secretary under subsection (i).
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Appendix B. Programs Approved for MYP in
Annual DOD Appropriations Acts Since FY1990
This appendix presents, in three tables, programs approved for MYP in annual DOD
Appropriations Acts since FY1990. Table B-1 covers fiscal years since FY2022. Table B-2
covers FY2011 through FY2021, and Table B-3 covers FY1990 through FY2010.
Table B-1. Programs Approved for MYP in Annual Appropriations Acts Since FY2022
Fiscal
Year
Bill/Law
Section on MYP
Program(s) Approved for MYP
2024
H.R. 2882/P.L. 118-47
Section 8010 of Division A
Naval Strike Missile
Guided Multiple Launch Rocket System
PATRIOT Advanced Capability-3 Missile Segment
Enhancement
Long Range Anti-Ship Missile
Joint Air-to-Surface Standoff Missile
Advanced Medium-Range Air-to-Air Missile
USS Virginia Class (SSN–774)
2023
H.R. 2617/P.L. 117-328
Section 8010 of Division C
Up to 15 DDG–51 Arleigh Burke Class Guided Missile
Destroyers
2022
H.R. 2471/P.L. 117-103
Section 8010 of Division C
UH/HH-60M Black Hawk helicopter
AH–64E Apache helicopter
Source: Table prepared by CRS based on text of bil s.
Table B-2. Programs Approved for MYP in Annual DOD Appropriations Acts
From FY2011 Through FY2021
Fiscal
Year
Bill/Law
Section on MYP
Programs(s) Approved for MYP
2021
H.R. 133/P.L. 116-260
Section 8010 of Division C [none]
2020
H.R. 1158/P.L. 116-93
Section 8010 of Division A [none]
2019
H.R. 6157/P.L. 115-245 Section 8010 of Division A Standard Missile–3 IB
Standard Missile–6
F/A–18E/F Super Hornet and EA–18G Aircraft variants
E–2D Advanced Hawkeye (AHE) Aircraft
C–130J, KC–130J, HC–130J, MC–130J, AC–130J
Aircraft
SSN Virginia Class Submarines and Government-
furnished equipment
2018
H.R. 1625/P.L. 115-141 Section 8010 of Division C V–22 Osprey aircraft variants (may not exceed five
years)
up to 13 SSN Virginia Class Submarines and
Government-furnished equipment
DDG–51 Arleigh Burke class Flight III guided missile
destroyers, the MK41 Vertical Launching Systems, and
associated Government-furnished systems and
subsystems
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Fiscal
Year
Bill/Law
Section on MYP
Programs(s) Approved for MYP
2017
H.R. 244/P.L. 115-31
Section 8010 of Division C AH–64E Apache Helicopter and UH–60M Blackhawk
Helicopter
2016
H.R. 2029/P.L. 114-113 Section 8010 of Division C [none]
2015
H.R. 83/P.L. 113-235
Section 8010 of Division C [none]
2014
H.R. 3547/P.L. 113-76
Section 8010 of Division C E-2D Advanced Hawkeye
SSN 774 Virginia class submarine
KC-130J, C-130J, HC-130J, MC-130J, AC-130J aircraft,
and government-furnished equipment
2013
H.R. 933/P.L. 113-6
Section 8010 of Division C F/A-18E, F/A-18F, and EA-18G aircraft
Up to 10 DDG-51 destroyers, as well as the AEGIS
Weapon Systems, MK 41 Vertical Launching Systems,
and Commercial Broadband Satellite Systems
associated with those ships
Virginia class submarines and government-furnished
equipment
CH-47 Chinook helicopters
V-22 Osprey aircraft variants
2012
H.R. 2055/P.L. 112-74
Section 8010 of Division A UH–60M/HH–60M and MH–60R/MH–60S Helicopter
Airframes
MH–60R/S Mission Avionics and Common Cockpits
2011
H.R. 1473/P.L. 112-10
Section 8010 of Division A Navy MH-60R/S helicopter systems
Source: Table prepared by CRS based on text of bil s.
Table B-3. Programs Approved for MYP in Annual DOD Appropriations Acts
from FY1990 Through FY2010
Fiscal
Year
Bill/Law
Section on MYP
Program(s) Approved for MYP
2010
H.R. 3326/P.L. 111-118
Section 8011 of Division A
F-18 aircraft variants
2009
H.R. 2638/P.L. 110-329
Section 8011 of Division C
SSN Virginia class submarine
2008
H.R. 3222/P.L. 110-116
Section 8010 of Division A
Army CH-47 Chinook helicopter
M1A2 Abrams System Enhancement Package
upgrades
M2A3/M3A3 Bradley upgrades
SSN Virginia Class submarine
2007
H.R. 5631/P.L. 109-289
Section 8008 of Division A
C-17 Globemaster
F-22A
MH-60R Helicopters
MH-60R Helicopter mission equipment
V-22 Osprey
2006
H.R. 2863/P.L. 109-148
Section 8008 of Division A
UH-60/MH-60 helicopters
C-17 Globemaster
Apache Block II Conversion
Modernized Target Acquisition Designation
Sight/Pilot Night Vision Sensor (MTADS/PNVS)
2005
H.R. 4613/P.L. 108-287
Section 8008
Lightweight 155mm Howitzer
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Fiscal
Year
Bill/Law
Section on MYP
Program(s) Approved for MYP
2004
H.R. 2658/P.L. 108-87
Section 8008
F/A-18 aircraft
E-2C aircraft
Tactical Tomahawk missile
Virginia Class submarine
2003
H.R. 5010/P.L. 107-248
Section 8008
C-130 aircraft
FMTV
F/A-18E and F engine
2002
H.R. 3338/P.L. 107-117
Section 8008 of Division A
UH-60/CH-60 aircraft
C-17
F/A-18E and F engine
2001
H.R. 4576/P.L. 106-259
Section 8008
Javelin missile
M2A3 Bradley fighting vehicle
DDG-51 destroyer
UH-60/CH-60 aircraft
2000
H.R. 2561/P.L. 106-79
Section 8008
Longbow Apache helicopter
Javelin missile
Abrams M1A2 Upgrade
F/A-18E/F aircraft
C-17 aircraft
F-16 aircraft
1999
H.R. 4103/P.L. 105-262
Section 8008
E-2C aircraft
Longbow Hellfire missile
Medium Tactical Vehicle Replacement (MTVR)
1998
H.R. 2266/P.L. 105-56
Section 8008
Apache Longbow radar
AV-8B aircraft
Family of Medium Tactical Vehicles
1997
H.R. 3610/P.L. 104-208
Section 8009 of Section
Javelin missiles
101(b) of Title I of Division
Army Tactical Missile System (ATACMS)
A
Mk19-3 grenade machine guns
M16A2 rifles
M249 Squad Automatic Weapons
M4 carbine rifles
M240B machine guns
Arleigh Burke (DDG-15 [sic:51] class destroyers
1996
H.R. 2126/P.L. 104-61
Section 8010
UH-60 Blackhawk helicopter
Apache Longbow helicopter
M1A2 tank upgrade
1995
H.R. 4650/P.L. 103-335
Section 8010
MK19-3 grenade machine guns
M16A2 rifles
M249 Squad Automatic Weapons
M4 carbine rifles
1994
H.R. 3116/P.L. 103-139
Section 8011
[none]
1993
H.R. 5504/P.L. 102-396
Section 9013a
Defense Support Satellites 23, 24 and 25
Enhanced Modular Signal Processor
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1992
H.R. 2521/P.L. 102-172
Section 8013
MK-48 ADCAP Torpedo
UH-60 Black Hawk helicopter
Army Tactical missile
1991
H.R. 5803/P.L. 101-511
Section 8014
Line of Sight-Rear (Avenger)—Pedestal Mounted
Stinger
Family of Medium Tactical Vehicles (FMTV)
LCAC Landing Craft
LHD Amphibious Ship
MK-45 Gun Mount/MK-6 Ammo Hoist
NAVSTAR Global Positioning Satellite (GPS)
Defense Support Program Satellites 22 and 23
1990
H.R. 3072/P.L. 101-165
Section 9021a
M-1 tank engines
M-1 tank fire control
Bradley Fighting Vehicle
Family of Heavy Tactical Vehicles
Maverick Missile (AGM-65D)
SH-60B/F helicopter
DDG-51 destroyer (two years)
Source: Table prepared by CRS based on text of bil s.
a. In H.R. 5504/P.L. 102-396 and H.R. 3072/P.L. 101-165, the general provisions title was Title IX.

Author Information

Ronald O'Rourke

Specialist in Naval Affairs

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