Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues for Congress




Multiyear Procurement (MYP) and Block Buy
Contracting in Defense Acquisition:
Background and Issues for Congress

Updated July 28, 2020
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 for each use of MYP. There is a
permanent statute governing MYP contracting—10 U.S.C. 2306b. 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 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 because there is
no permanent statute governing the use of BBC that includes EOQ authority as
an automatic feature.
 BBC contracts are less likely to include cancellation penalties.
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.
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Contents
Introduction ..................................................................................................................................... 1
Issues for Congress ................................................................................................................... 1
Terminology and Scope of Report ............................................................................................ 1

An Air Force “Block Buy” That Is Not Discussed in This Report ..................................... 1
Contracting Mechanisms and Funding Approaches ............................................................ 1

Background ..................................................................................................................................... 3
Multiyear Procurement (MYP) ................................................................................................. 3
MYP in Brief ....................................................................................................................... 3
Potential Savings Under MYP ............................................................................................ 3
Permanent Statute Governing MYP .................................................................................... 5
Potential Consequences of Not Fully Funding an MYP Contract ...................................... 7
Effect on Flexibility for Making Procurement Changes ..................................................... 7
Congressional Approval ...................................................................................................... 7
Frequency of Use of MYP .................................................................................................. 8
Block Buy Contracting (BBC) .................................................................................................. 9
BBC in Brief ....................................................................................................................... 9
Terminology Alert: Block Buy Contracting vs. Block Buys ............................................. 10
Potential Savings Under BBC ........................................................................................... 10
Frequency of Use of BBC .................................................................................................. 11
Using BBC Rather than MYP ............................................................................................ 11

MYP and BBC vs. Contracts with Options .............................................................................. 11
Issues for Congress ........................................................................................................................ 12
Frequency of Using MYP and BBC ........................................................................................ 12
Permanent Statute for BBC ..................................................................................................... 13
Coast Guard Use of MYP and BBC ........................................................................................ 13

Legislative Activity for FY2021 .................................................................................................... 14
DOD FY2021 Proposals for New MYP and Block Buy Contracts ......................................... 14
FY2021 National Defense Authorization Act (H.R. 6395/S. 4049) ........................................ 14

House ................................................................................................................................ 14
Senate ................................................................................................................................ 16
FY2021 DOD Appropriations Act (H.R. 7617) ...................................................................... 20
House ................................................................................................................................ 20

Tables
Table 1. Contracting Mechanisms and Funding Approaches .......................................................... 2

Table B-1. Programs Approved for MYP in Annual DOD Appropriations Acts
From FY2011 Through FY2019................................................................................................. 27
Table B-2. Programs Approved for MYP in Annual DOD Appropriations Acts from
FY1990 Through FY2010 .......................................................................................................... 28

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Appendixes
Appendix A. Text of 10 U.S.C. 2306b ........................................................................................... 22
Appendix B. Programs Approved for MYP in Annual DOD Appropriations Acts Since
FY1990 ....................................................................................................................................... 27

Contacts
Author Information ........................................................................................................................ 30

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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
An Air Force “Block Buy” That Is Not Discussed in This Report
A contract that the Air Force has for the procurement of Evolved Expendable Launch Vehicle
(EELV) Launch Services (ELS) has in the past sometimes been referred to as a block buy, but it is
not an example of block buy contracting as discussed in this report. The Air Force in this instance
was using the term block buy to mean something different. This report does not discuss the ELS
contract. (For additional discussion, see “Terminology Alert: Block Buy Contracting vs. Block
Buys”
below.)
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

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
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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.
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 three Navy shipbuilding programs have used BBC 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
Most programs
(e.g., CVNs, LHAs,
contracting
DDG-1000s, and SSBN-
826s)
Contracting
MYP
Selected programs


mechanisms
Virginia class (boats 1-4),


Block buy
Littoral Combat Ship
contracting
(ships 5-26), and John
Lewis (TAO-205) class
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

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).
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.
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Background
Multiyear Procurement (MYP)
MYP in Brief
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’
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 5-year period
FY2021-FY2025, 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 FY2021, 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 FY2022, 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 5-year period FY2021-FY2025. DOD would award this
contract in FY2021, at the beginning of the five-year period, following
congressional approval to use MYP for the program, and congressional
appropriation of the FY2021 funding for the program. To continue the
implementation of the contract over the next four years, DOD would request the
FY2022 funding for the program as part of DOD’s proposed FY2022 budget, the
FY2023 funding as part of DOD’s proposed FY2023 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.”5 The briefing
states that CAPE up to that point had assessed MYP savings for four aircraft procurement

5 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.
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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%.6
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
of historical information on multiyear contracts, comparable annual costs, and the dynamic
acquisition environment.7
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 5-year contract. Procuring selected components in this manner under an MYP
contract is called an economic order quantity (EOQ) purchase.8 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.9

6 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.
7 Government Accountability Office, Defense Acquisitions[:] DOD’s Practices and Processes for Multiyear
Procurement Should Be Improved
, GAO-08-298, February 2008, p. 3.
8 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.
9 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
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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.10)
Permanent Statute Governing MYP
Is there a permanent statute governing MYP contracting? There is a permanent statute
governing MYP contracting—10 U.S.C. 2306b. 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. For the
text of 10 U.S.C. 2306b, see Appendix A. DOD’s use of MYP contracting is further governed by
DOD acquisition regulations.
Under this statute, what criteria must a program meet to qualify for MYP? 10 U.S.C. 2306b(a)
states that to qualify for MYP, a program must meet several criteria, including the following:
Significant savings. DOD must estimate that using an MYP contract would
result in “significant savings” compared with using annual contracting.

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
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.
10 Annual contracts can also include cancellation penalties.
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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. 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. 2306b also requires
DOD MYP contracts to be fixed-price type contracts.
What is meant by “significant savings”? The amount of savings required under 10 U.S.C. 2306b
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 National Defense
Authorization Act (S. 1356/P.L. 114-92 of November 25, 2015).11 The joint explanatory statement
for the FY2016 National Defense Authorization Act states the following regarding Section 811:
Amendment relating to multiyear contract authority for acquisition of property (sec. 811)
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.12
In addition, 10 U.S.C. 2306b 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

11 For a discussion of the earlier evolution of the savings requirement under 10 U.S.C. 2306b, 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.
12 Joint explanatory statement for H.R. 1735, the FY2016 National Defense Authorization Act, page 126 (PDF page
127 of 542). H.R. 1735 was vetoed by the President. A revised FY2016 National Defense Authorization Act, 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.
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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.13
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.
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.14 Congressional approval for DOD MYP
contracts with a value of more than $500 million must occur in two places: an annual DOD
appropriations act15 and an act other than the annual DOD appropriations act.16

13 10 U.S.C. 2306b, subsection (i)(4).
14 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.
15 10 U.S.C. 2306b, subsection (l)(3).
16 10 U.S.C. 2306b, subsection (i)(1).
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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 Table B-2, since FY2011, it has been Section 8010.
An annual national defense authorization act (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. 2306b.
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.
An August 28, 2017, press report states the following:
The Pentagon’s portfolio of active multiyear procurement contracts is on track to taper
from $10.7 billion in fiscal year 2017—or more than 8 percent of DOD procurement
spending—to $1.2 billion by FY-19, according to data recently compiled by the Pentagon
comptroller for lawmakers.
However, there are potential new block-buy deals in the works, including several large
Navy deals.
According to the Multiyear Procurement Contracts Report for FY-17, which includes data
current as of June 27, seven major defense acquisition programs are being purchased
through multiyear procurement contracts, collectively obligating the U.S. government to
spend $16 billion across the five-year spending plan with $14.5 billion of the commitments
lashed to FY-17 and FY-18.17
In an interview published on January 13, 2014, Sean Stackley, the Assistant Secretary of the Navy
for Research, Development, and Acquisition (i.e., the Navy’s acquisition executive), stated the
following:
What the industrial base clamors for is stability, so they can plan, invest, train their work
force. It gives them the ability in working with say, the Street [Wall Street], to better predict
their own performance, then meet expectations in the same fashion we try to meet our
expectations with the Hill.
It’s emblematic of stability that we’ve got more multiyear programs in the Department of
the Navy than the rest of the Department of Defense combined. We’ve been able to harvest
from that significant savings, and that has been key to solving some of our budget
problems. It’s allowed us in certain cases to put the savings right back into other programs
tied to requirements.18
A February 2012 briefing by the Cost Assessment and Program Evaluation (CAPE) office within
the Office of the Secretary of Defense (OSD) shows that the total dollar value of DOD MYP
contracts has remained more or less stable between FY2000 and FY2012 at roughly $7 billion to

17 Jason Sherman, “Active Multiyear Procurement Portfolio Dwindling, New Potential Deals on Deck,” Inside the
Navy
, August 28, 2017.
18 “Interview: Sean Stackley, US Navy’s Acquisition Chief,” Defense News, January 13, 2014: 22.
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$13 billion per year. The briefing shows that since the total size of DOD’s procurement budget
has increased during this period, the portion of DOD’s total procurement budget accounted for by
programs using MYP contracts has declined from about 17% in FY2000 to less than 8% in
FY2012.19 The briefing also shows that the Navy makes more use of MYP contracts than does the
Army or Air Force, and that the Air Force made very little use of MYP in FY2010-FY2012.20
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] 1982,21 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
has authorized the use of multiyear procurement for approximately 140 acquisition
programs, including some systems approved more than once.22
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.23 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. The
BBC contracts that were used by the Navy for procuring Littoral Combat Ships
(LCSs), for example, covered a period of seven years (FY2010-FY2016).
 Economic order quantity (EOQ) authority does not come automatically as part of
BBC authority because there is no permanent statute governing the use of BBC

19 Slide 4 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.
20 Slide 5 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.
21 S. 815/P.L. 97-86 of December 1, 1981, §909.
22 Government Accountability Office, Defense Acquisitions[:] DOD’s Practices and Processes for Multiyear
Procurement Should Be Improved
, GAO-08-298, February 2008, p. 5.
23 Using the hypothetical example introduced earlier involving the procurement of 20 aircraft over the five-year period
FY2018-FY2022, DOD would follow the same general path as it would under MYP: DOD would issue one contract
covering all 20 aircraft in FY2018, at the beginning of the five-year period, following congressional approval to use
BBC for the program, and congressional appropriation of the FY2018 funding for the program. To continue the
implementation of the contract over the next four years, DOD would request the FY2019 funding for the program as
part of DOD’s proposed FY2019 budget, the FY2020 funding as part of DOD’s proposed FY2020 budget, and so on.
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that includes EOQ authority as an automatic feature. To provide EOQ authority
as part of a BBC contract, the provision granting authority for using BBC in a
program may need to state explicitly that the authority to use BBC includes the
authority to use 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
National Defense Authorization Act (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 5-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 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
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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
over the six-year period FY2010-FY2015, to the two LCS builders.24 (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
is using a block buy contract to procure the first six ships in the program.25
A fourth example, arguably, is the Air Force’s KC-46 aerial refueling tanker program, which is
employing a fixed price incentive fee (FPIF) development contract that includes 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

24 For further discussion, see CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and
Issues for Congress
, by Ronald O'Rourke.
25 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.
26 For more on the KC-46 program, see CRS Report RL34398, Air Force KC-46A Tanker Aircraft Program, by
Jeremiah Gertler.
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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
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
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, as many observers
anticipate.
 The risks of using MYP have been reduced by Section 811 of the FY2008
National Defense Authorization Act (H.R. 4986/P.L. 110-181 of January 28,
2008), which amended 10 U.S.C. 2306b to strengthen the process for ensuring
that programs proposed for MYP meet certain criteria (see “Permanent Statute
Governing MYP”
). Since the value of MYP contracts equated to less than 8% of
DOD’s procurement budget in FY2012, compared to about 17% of DOD’s
procurement budget in FY2000, MYP likely could be used more frequently
without exceeding past experience regarding the share of DOD’s procurement
budget accounted for by MYP contracts.
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

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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years in response to changing strategic or budgetary circumstances. The risks of
reducing flexibility in this regard are increased now because of uncertainties in
the current strategic environment and because efforts to reduce federal budget
deficits could include reducing DOD spending, which could lead to a
reassessment of U.S. defense strategy and associated DOD acquisition programs.
 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.
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. 2306b) 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 substantial 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. 2306b.
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. 1), and 10 U.S.C. 2306b 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 its major acquisition programs. The authority is now codified at 14 U.S.C. 1137.
As discussed earlier in this report, the Navy in recent years has made extensive use of MYP and
BBC in its ship and aircraft acquisition programs, reducing the collective costs of those programs,
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the Navy estimates, by billions of dollars. 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 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. CRS estimates that
using multiyear contracting rather than contracts with options for the entire 25-ship OPC program
could reduce the cost of the OPC program by about $1 billion. The OPC program is the Coast
Guard’s top-priority acquisition program, and it represents a once-in-a-generation opportunity to
reduce the acquisition cost of a Coast Guard acquisition program by an estimated $1 billion. CRS
also estimates that using BBC for a three-ship polar icebreaker program could reduce the cost of
that program by upwards of $150 million. The Coast Guard has expressed some interest in using
BBC in the polar icebreaker program, but its baseline acquisition strategy for that program, like
its current acquisition strategy for the OPC program, is to use a contract with options.28
Legislative Activity for FY2021
DOD FY2021 Proposals for New MYP and Block Buy Contracts
As part of its FY2021 budget submission, DOD is proposing continued funding for implementing
several MYP contracts initiated in fiscal years prior to FY2021, but it has not highlighted any
requests for authority for new MYP or block buy contracts for major acquisition programs that
would begin in FY2021.29
FY2021 National Defense Authorization Act (H.R. 6395/S. 4049)
House
Section 807 of H.R. 6395 as reported by the House Armed Services Committee (H.Rept. 116-442
of July 9, 2020) states (emphasis added):
SEC. 807. ALTERNATIVE SPACE ACQUISITION SYSTEM FOR THE UNITED
STATES SPACE FORCE.
(a) MILESTONE DECISION AUTHORITY FOR MAJOR DEFENSE ACQUISITION
PROGRAMS AND MAJOR SYSTEMS.—
(1) PROGRAM EXECUTIVE OFFICER.—The Secretary of the Air Force may assign an
appropriate program executive officer as the milestone decision authority for major defense
acquisition programs of the United States Space Force.

28 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.
29 No requests for authority for new MYP or block contracts that would begin in FY2021 are shown in Department of
Defense, Program Acquisition Costs by Weapon System, United States Department of Defense Fiscal Year 2021
Budget Request, February 2020.
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(2) PROGRAM MANAGER.—The program executive officer assigned under paragraph
(1) may delegate authority over major systems to an appropriate program manager.
(b) ALTERNATIVE SPACE ACQUISITION SYSTEM.—
(1) IN GENERAL.—The Secretary of Defense shall take such actions necessary to develop
an acquisition pathway within the Department of Defense to be known as the ‘‘Alternative
Space Acquisition System’’ that is specifically tailored for space systems and programs in
order to achieve faster acquisition and more rapid fielding of critical systems (including by
using new commercial capabilities and services), while maintaining accountability for
effective programs that are delivered on time and on budget.
(2) GOAL.—The goal of the Alternative Space Acquisition System shall be to quickly and
effectively acquire space warfighting capabilities needed to address the requirements of the
national defense strategy (as defined under section 113(g) of title 10, United States Code).
(3) REPORT.—Not later than January 15, 2021, the Secretary of Defense shall submit
to the congressional defense committees a report on the Alternative Space Acquisition
System that includes the following:

(A) Proposed United States Space Force budget line items for fiscal year 2022, including—
(i) a comparison with budget line items for major defense acquisition programs and major
systems of the United States Space Force for three previous fiscal years; and
(ii) measures to ensure sufficient transparency related to the performance of the Alternative
Space Acquisition System and opportunities to oversee funding priorities for the
Alternative Space Acquisition System;
(B) Proposed revised, flexible, and streamlined options for joint requirements validation in
order to be more responsive and innovative, while ensuring the ability of the Joint Chiefs
of Staff to ensure top-level system requirements are properly prioritized to address joint
warfighting needs;
(C) A list of acquisition programs of the United States Space Force for which
multiyear procurement authorities are recommended.

(D) A list of space acquisition programs that may be able to use existing alternative
acquisition pathways.
(E) Policies for a new Alternative Space Acquisition System with specific acquisition key
decision points and reporting requirements for development, fielding, and sustainment
activities that meets the requirements of the adaptive acquisition framework (as described
in Department of Defense Instruction 5000.02, ‘‘Operation of the Adaptive Acquisition
Framework’’);
(F) Updated determination authority for procurement of useable end items that are not
weapon systems.
(G) Policies and a governance structure for a separate United States Space Force budget
topline, corporate process, and portfolio management process.
(H) An analysis of the risks and benefits of the delegation of the authority of the head of
contracting activity authority to the Chief of Space Operations in a manner that would not
expand the operations of the United States Space Force.
(c) COMPTROLLER GENERAL REVIEW.—Not later than 60 days after the submission
of the report required under subsection (b)(3), the Comptroller General of the United States
shall review such report and submit to the congressional defense committees an analysis
and recommendations based on such report .
(d) DEFINITIONS.—In this section:
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(1) MAJOR DEFENSE ACQUISITION PROGRAM.—The term ‘‘major defense
acquisition program’’ has the meaning given in section 2430 of title 10, United States
Code.
(2) MAJOR SYSTEM.—The term ‘‘major system’’ has the meaning given in section 2302
of title 10, United States Code.
(3) MILESTONE DECISION AUTHORITY.—The term ‘‘milestone decision authority’’
has the meaning given in section 2431a of title 10, United States Code.
(4) PROGRAM EXECUTIVE OFFICER; PROGRAM MANAGER.—The terms
‘‘program executive officer’’ and ‘‘program manager’’ have the meanings given those
terms, respectively, in section 1737 of title 10, United States Code.
H.Rept. 116-442 states:
DDG–51 multiyear procurement
The committee continues to support the 355-ship fleet codified in the National Defense
Authorization Act for Fiscal Year 2018 (Public Law 115–91) as an essential part of the
National Defense Strategy and its emphasis on near-peer competitors such as Russia and
China. DDG–51 destroyers are the backbone of the surface fleet, providing multi-mission
flexibility and increasing capability with the introduction of Flight III and the AN/SPY–6
radar. With plans for the future Large Surface Combatant toward the end of this decade,
and the current multiyear procurement of DDG–51s running through fiscal year 2022, it is
imperative that another 10-ship multiyear contract is awarded for fiscal year 2023 to ensure
that Flight III capability will be available to the fleet. Such efforts will further strengthen
the defense industrial base, maximize savings, and provide the shipyards a clear projection
of work. Therefore, the committee encourages the Secretary of Defense and the Secretary
of the Navy to make all necessary steps that will allow for another multiyear contract for
DDG–51 Flight IIIs beginning in fiscal year 2023. (Page 17)
Senate
Section 124 of S. 4049 as reported by the Senate Armed Services Committee (S.Rept. 116-236 of
June 24, 2020) states:
SEC. 124. PROCUREMENT AUTHORITIES FOR CERTAIN AMPHIBIOUS
SHIPBUILDING PROGRAMS.
(a) CONTRACT AUTHORITY.—
(1) PROCUREMENT AUTHORIZED.—In fiscal year 2021, the Secretary of the Navy
may enter into one or more contracts for the procurement of three San Antonio-class
amphibious ships and one America-class amphibious ship.
(2) PROCUREMENT IN CONJUNCTION WITH EX
ISTING CONTRACTS.—The ships authorized to be procured under paragraph (1) may
be procured as additions to existing contracts covering such programs.
(b) CERTIFICATION REQUIRED.—A contract may not be entered into under subsection
(a) unless the Secretary of the Navy certifies to the congressional defense commit tees, in
writing, not later than 30 days before entry into the contract, each of the following, which
shall be prepared by the milestone decision authority for such programs:
(1) The use of such a contract is consistent with the Department of the Navy’s projected
force structure requirements for amphibious ships.
(2) The use of such a contract will result in significant savings compared to the total
anticipated costs of carrying out the program through annual contracts. In certifying cost
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savings under the preceding sentence, the Secretary shall include a written explanation
of—
(A) the estimated end cost and appropriated funds by fiscal year, by hull, without the
authority provided in subsection (a);
(B) the estimated end cost and appropriated funds by fiscal year, by hull, with the authority
provided in subsection (a);
(C) the estimated cost savings or increase by fiscal year, by hull, with the authority
provided in subsection (a);
(D) the discrete actions that will accomplish such cost savings or avoidance; and
(E) the contractual actions that will ensure the estimated cost savings are realized.
(3) There is a reasonable expectation that throughout the contemplated contract period the
Secretary of the Navy will request funding for the contract at the level required to avoid
contract cancellation.
(4) There is a stable design for the property to be acquired and the technical risks associated
with such property are not excessive.
(5) The estimates of both the cost of the contract and the anticipated cost avoidance through
the use of a contract authorized under subsection (a) are realistic.
(6) The use of such a contract will promote the national security of the United States.
(7) 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
(as defined under section 221 of title 10, United States Code) for such fiscal year will
include the funding required to execute the program without cancellation.
(c) AUTHORITY FOR ADVANCE PROCUREMENT.—The Secretary of the Navy may
enter into one or more contracts for advance procurement associated with a vessel or
vessels for which authorization to enter into a contract is provided under subsection (a),
and for systems and subsystems associated with such vessels in economic order quantities
when cost savings are achievable.
(d) CONDITION FOR OUT-YEAR CONTRACT PAY
MENTS.—A contract entered into under subsection (a) shall provide that any obligation
of the United States to make a payment under the contract for a fiscal year is subject to the
availability of appropriations for that purpose for such fiscal year.
(e) MILESTONE DECISION AUTHORITY DEFINED.—In this section. the term
‘‘milestone decision authority’’ has the meaning given the term in section 2366a(d) of title
10, United States Code.
Regarding Section 124, S.Rept. 116-236 states:
Procurement authorities for certain amphibious shipbuilding programs (sec. 124)
The committee recommends a provision that would allow the Secretary of the Navy to
enter into one or more contracts for the procurement of three San Antonio-class amphibious
ships and one America-class amphibious ship.
The committee notes that the Assistant Secretary of the Navy for Research, Development,
and Acquisition testified on March 4, 2020, that the authorities provided in this provision
would be ‘‘tremendously beneficial’’ and added, ‘‘[W]e will look forward to those
authorities, should they come in the [National Defense Authorization Act for Fiscal Year
2021].’’
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The committee further notes that the Navy is estimating savings of 8 to 12 percent, or
roughly $1 billion, for the multiple ship procurement of these 4 ships as compared to 4
separate ship procurement contracts.
Accordingly, this provision would provide the necessary authorities for implementing such
an approach. (Page 10)
Section 141 of S. 4049 as reported by the committee states:
SEC. 141. ECONOMIC ORDER QUANTITY CONTRACTING AUTHORITY FOR F–
35 JOINT STRIKE FIGHTER PROGRAM.
(a) AUTHORITY FOR ADVANCE PROCUREMENT AND ECONOMIC ORDER
QUANTITY.—The Secretary of Defense may enter into one or more contracts, beginning
with the fiscal year 2020 program year, for the procurement of economic order quantities
of material and equipment for the F–35 aircraft program for use in procurement contracts
to be awarded for such program during fiscal years 2021 through 2023.
(b) LIMITATION.—The total amount obligated in fiscal year 2021 under all contracts
entered into under subsection (a) shall not exceed $493,000,000.
(c) PRELIMINARY FINDINGS.—Before entering into a contract under subsection (a),
the Secretary shall make each of the following findings with respect to such contract:
(1) The use of such a contract will result in significant savings of the total anticipated costs
of carrying out the program through annual contracts.
(2) The minimum need for the property to be procured is expected to remain substantially
unchanged during the contemplated contract period in terms of production rate,
procurement rate, and total quantities.
(3) There is a reasonable expectation that, throughout the contemplated contract period, the
Secretary will request funding for the contract at the level required to avoid contract
cancellation.
(4) There is a stable design for the property to be procured, and the technical risks
associated with such property are not excessive.
(5) The estimates of both the cost of the contract and the anticipated cost avoidance through
the use of an economic order quantity contract are realistic.
(6) Entering into the contract will promote the national security interests of the United
States.
(d) CERTIFICATION REQUIREMENT.—Except as provided in subsection (e), the
Secretary of Defense may not enter into a contract under subsection (a) until 30 days after
the Secretary certifies to the congressional defense committees, in writing, that each of the
following conditions is satisfied:
(1) A sufficient number of end items of the system being acquired under such contract have
been delivered at or within the most recently available estimates of the program acquisition
unit cost or procurement unit cost for such system to determine that the estimates of the
unit costs are realistic.
(2) 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
submitted to Congress under section 221 of title 10, United States Code, for that fiscal year
will include the funding required to execute the program without cancellation.
(3) The contract is a fixed-price type contract.
(4) The proposed contract provides for production at not less than minimum economic rates
given the existing tooling and facilities.
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(5) The Secretary has determined that each of the conditions described in paragraphs (1)
through (6) of subsection (c) will be met by such contract and has provided the basis for
such determination to the congressional defense committees.
(6) The determination under paragraph (5) was made after the completion of a cost analysis
performed by the Director of Cost Assessment and Program Evaluation for the purpose of
section 2334(f)(2) of title 10, United States Code, and the analysis supports that
determination.
(e) EXCEPTION.—Notwithstanding subsection (d), the Secretary of Defense may enter
into a contract under subsection (a) on or after December 1, 2020, if—
(1) the Director of Cost Assessment and Program Evaluation has not completed a cost
analysis of the preliminary findings made by the Secretary under subsection (c) with
respect to the contract;
(2) the Secretary certifies to the congressional defense committees, in writing, that each of
the conditions described in paragraphs (1) through (5) of subsection (d) is satisfied; and
(3) a period of 30 days has elapsed following the date on which the Secretary submits the
certification under paragraph (2).
Section 1025 of S. 4049 as reported by the committee states (emphasis added):
SEC. 1025. SENSE OF CONGRESS ON ACTIONS NECESSARY TO ACHIEVE A 355-
SHIP NAVY.
It is the sense of Congress that to achieve the national policy of the United States to have
available, as soon as practicable, not fewer than 355 battle force ships—
(1) the Navy must be adequately resourced to increase the size of the Navy in accordance
with the national policy, which includes the associated ships, aircraft, personnel,
sustainment, and munitions;
(2) across fiscal years 2021 through 2025, the Navy should start construction on not fewer
than—
(A) 12 Arleigh Burke-class destroyers;
(B) 10 Virginia-class submarines;
(C) 2 Columbia-class submarines;
(D) 3 San Antonio-class amphibious ships;
(E) 1 LHA-class amphibious ship;
(F) 6 John Lewis-class fleet oilers; and
(G) 5 guided missile frigates;
(3) new guided missile frigate construction should increase to a rate of between two and
four ships per year once design maturity and construction readiness permit;
(4) the Columbia-class submarine program should be funded with additions to the Navy
budget significantly above the historical average, given the critical single national mission
that these vessels will perform and the high priority of the shipbuilding budget for
implementing the National Defense Strategy;
(5) stable shipbuilding rates of construction should be maintained for each vessel
class, utilizing multi-year or block buy contract authorities when appropriate, until a
deliberate transition plan is identified
; and
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(6) prototyping of potential new shipboard sub systems should be accelerated to build
knowledge systematically, and, to the maximum extent practicable, shipbuilding
prototyping should occur at the subsystem-level in advance of ship design.
S.Rept. 116-236 states:
DDG–51 destroyer multi-year procurement
The committee continues to support the national policy of achieving at least a 355-ship
fleet, as codified in the National Defense Authorization Act for Fiscal Year 2018 (Public
Law 115–91), which is integral to the National Defense Strategy and its emphasis on near-
peer competition with Russia and China.
The committee views DDG–51 destroyers as the backbone of the surface fleet, providing
multi-mission flexibility and increasing capability with introduction of Flight III and the
AN/SPY–6 radar. With plans for construction of a new class of Large Surface Combatants
(LSCs) toward the end of this decade and the current multi-year procurement of DDG–51s
ending in fiscal year 2022, the committee believes that it is imperative that the Navy award
another DDG–51 multi-year contract beginning in fiscal year 2023. This contract is critical
to ensuring that Flight III capability continues to be delivered to the fleet and the industrial
base is maintained to support the LSC acquisition strategy.
Accordingly, the committee urges the Secretary of Defense and the Secretary of the Navy
to make all necessary plans to award another multi-year contract for DDG–51 Flight III
destroyers in fiscal year 2023, including long lead material purchases in fiscal year 2022.
(Page 49)
FY2021 DOD Appropriations Act (H.R. 7617)
House
In H.R. 7617 as reported by the House Appropriations Committee (H.Rept. 116-453 of July 16,
2020), Section 8010 states:
Sec. 8010. None of the funds provided in this Act shall be available to initiate: (1) a
multiyear contract that employs economic order quantity procurement in excess of
$20,000,000 in any one year of the contract or that includes an unfunded contingent
liability in excess of $20,000,000; or (2) a 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, unless the congressional defense committees have been
notified at least 30 days in advance of the proposed contract award: Provided, That no part
of any appropriation contained in this Act shall be available to 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: Provided further, That no part of any appropriation
contained in this Act shall be available to initiate multiyear procurement contracts for any
systems or component thereof if the value of the multiyear contract would exceed
$500,000,000 unless specifically provided in this Act: Provided further, That no multiyear
procurement contract can be terminated without 30-day prior notification to the
congressional defense committees: Provided further, That the execution of multiyear
authority shall require the use of a present value analysis to determine lowest cost
compared to an annual procurement: Provided further, That none of the funds provided in
this Act may be used for a multiyear contract executed after the date of the enactment of
this Act unless in the case of any such contract—
(1) the Secretary of Defense has submitted to Congress a budget request for full funding of
units to be procured through the contract and, in the case of a contract for procurement of
aircraft, that includes, for any aircraft unit to be procured through the contract for which
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procurement funds are requested in that budget request for production beyond advance
procurement activities in the fiscal year covered by the budget, full funding of procurement
of such unit in that fiscal year;
(2) cancellation provisions in the contract do not include consideration of recurring
manufacturing costs of the contractor associated with the production of unfunded units to
be delivered under the contract;
(3) the contract provides that payments to the contractor under the contract shall not be
made in advance of incurred costs on funded units; and
(4) the contract does not provide for a price adjustment based on a failure to award a follow-
on contract.
H.Rept. 116-453 states, “Language is included [in the text of H.R. 7617] under the heading
‘Shipbuilding and Conversion, Navy’ that allows funds to be available for multiyear procurement
of critical components to support the common missile compartment of nuclear-powered vessels.”
This is a reference to a provision in the paragraph of H.R. 7617 that makes appropriations for the
Shipbuilding and Conversion, Navy (SCN) appropriation account that relates to the use of SCN
funding that is executed in accordance with 10 U.S.C. 2218a, the statute that governs a DOD fund
known as the National Sea-Based Deterrence Fund:
Provided further, That funds appropriated or otherwise made available by this Act for
Columbia Class Submarine (AP) [advance procurement] may be available for the purposes
authorized by subsections (f), (g), (h) or (i) of section 2218a of title 10, United States Code,
only in accordance with the provisions of the applicable subsection.30
H.Rept. 116-453 also states:
DDG–51 MULTI YEAR PROCUREMENT
The Committee continues to support the Navy’s stated goal of a 355-ship fleet, which is an
essential part of the National Defense Strategy and its emphasis on near-peer competitors.
The Committee recognizes that DDG–51 Destroyers are the backbone of the surface fleet,
providing multi-mission flexibility and increasing capability with the introduction of the
Flight III variant. The Committee understands the Navy has plans to develop and procure
a future Large Surface Combatant in the near future, and notes that the current multi-year
procurement of DDG–51s will end in fiscal year 2022. The Committee believes that a
follow-on DDG–51 multiyear procurement contract awarded for fiscal year 2023 will
ensure that Flight III capability will be available to the fleet and the domestic industrial
base will be sustained until the award of the Large Surface Combatant contract. The
Committee encourages the Secretary of the Navy to review the potential benefits of
awarding a multi-year contract for DDG–51 Flight IIIs in fiscal year 2023. (Page 185)



30 For more on the National Sea-Based Deterrence Fund, see CRS Report R41129, Navy Columbia (SSBN-826) Class
Ballistic Missile Submarine Program: Background and Issues for Congress
, by Ronald O'Rourke.
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Appendix A. Text of 10 U.S.C. 2306b
The text of 10 U.S.C. 2306b as of December 19, 2019, is as follows:
§2306b. 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 significant savings of the total anticipated
costs of carrying out the program 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.
(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
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(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;
(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
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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 the following:
(A) 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.
(B) Confirmation that the preliminary findings of the agency head under subparagraph (A)
were supported by a preliminary cost analysis performed by the Director of Cost
Assessment and Program Evaluation.
(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 2334(e)(2) 1 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
2433(d) 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.
(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.
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(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, Technology, and Logistics.
(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.
(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:
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(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.
(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 two tables, programs approved for MYP in annual DOD appropriations
acts since FY1990. Table B-1 covers FY2011 to the present, and Table B-2 covers FY1990
through FY2010.
Table B-1. Programs Approved for MYP in Annual DOD Appropriations Acts
From FY2011 Through FY2019
Fiscal
Year
Bill/Law
Section on MYP
Programs(s) Approved for MYP
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 5
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
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
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Fiscal
Year
Bill/Law
Section on MYP
Programs(s) Approved for MYP
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-2. 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
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
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Fiscal
Year
Bill/Law
Section on MYP
Program(s) Approved for MYP
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
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
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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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Congressional Research Service
R41909 · VERSION 92 · UPDATED
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