FAR Part 17 - Special Contracting Methods (Multi-Year Contracts, Options, Interagency Acquisitions / Economy Act, Management and Operating Contracts, Reverse Auctions)

What FAR Part 17 - Special Contracting Methods (Multi-Year Contracts, Options, Interagency Acquisitions / Economy Act, Management and Operating Contracts, Reverse Auctions) requires

Federal Acquisition Regulation (FAR) Part 17 governs special contracting methods used when standard award structures are inappropriate. Subpart 17.1 (Multi-Year Contracting) implements 41 USC 3903 (civilian) and 10 USC 3501 (DoD) authorising contracts covering more than 1 but not more than 5 program years without separate option exercises; nondefense agencies must determine the need is reasonably firm and continuing and the approach serves the best interests of the United States, while DoD, NASA, and Coast Guard require cost savings, stable design, minimal technical risk, reasonable expectation of continued funding, and realistic estimates. Each program year except the first remains cancellable and the contracting officer establishes a cancellation ceiling excluding amounts for prior years' requirements with nonrecurring costs amortised across program years. Congressional notification thresholds under FAR 17.108 are USD 20 million (nondefense) and USD 200 million (DoD/NASA/Coast Guard) with a 31-day wait period. Clause 52.217-2 (Cancellation Under Multi-year Contracts) is required. Subpart 17.2 (Options) governs unilateral option exercise: the option must be exercised in writing within the period specified in the contract; before exercise the contracting officer must determine in writing that funds are available, the option fulfils an existing Government need, exercise is the most advantageous method considering price and other factors, the option was synopsised under FAR Part 5 (unless exempt), the contractor is not on the SAM exclusion list, past performance has been considered, and current performance is acceptable. Total basic plus option periods for services are limited to 5 years under FAR 17.204(e). Clauses 52.217-3 through 52.217-9 cover evaluation and exercise of options. Subpart 17.5 (Interagency Acquisitions) governs acquisitions where one agency uses another agency's contract or contracting services; the Economy Act at 31 USC 1535 is the default authority requiring a determination and findings (D&F) that interagency acquisition is in the best interest, supplies cannot be obtained as conveniently or economically by direct contracting, and one of three specific circumstances applies; assisted acquisitions require a written interagency agreement before solicitation while direct acquisitions do not. Multi-agency contracts and Government-wide Acquisition Contracts (GWACs) require a business-case analysis by the servicing agency. Subpart 17.6 (Management and Operating Contracts) governs M&O contracts for Government-owned, contractor-operated (GOCO) facilities with prohibited functions specified at 17.603 and 5-year review cycles at 17.605. Subpart 17.7 governs interagency acquisitions for DoD requiring nondefense agency compliance certification under 17.703. Subpart 17.8 (Reverse Auctions) authorises reverse auctions for clearly-defined commercial requirements with multiple offerors and prohibits use for design-build construction, architect-engineer services, sealed bidding, and personal protective equipment per NDAA limits.

Pillar: Public Sector & Government Procurement · Authority: Federal Acquisition Regulatory Council (DOD, GSA, NASA) issuing the Federal Acquisition Regulation under 41 USC 1303 and 48 CFR Chapter 1; statutory bases: 41 USC 3903 (civilian multi-year contracting), 10 USC 3501 (DoD multi-year contracting), 31 USC 1535 (Economy Act for interagency acquisitions), 40 USC 11302 (GWAC authority for IT); Office of Management and Budget for interagency acquisition policy · Version: 1.0.0 · Last updated: 2026-06-02

Primary source: https://www.acquisition.gov/far/part-17

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Primary Citations — 7 traced to source

• FAR Part 17 Section 17.103 (Multi-year contract definition): 'Multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years. A multi-year contract may be terminated for either the convenience of the Government or for default. The Government may, but is not required to, identify and allocate cancellation charges among the program years.'
• FAR Part 17 Section 17.105-2(a) (Multi-year contracting agency findings - non-DoD/NASA/Coast Guard): 'Except for DoD, NASA, and the Coast Guard, agencies may enter into a multi-year contract if the head of the agency determines that - (1) The need for the supplies or services is reasonably firm and continuing over the period of the contract; and (2) A multi-year contract will serve the best interests of the United States by encouraging full and open competition or promoting economy in administration, performance, and operation of the agency's programs.' DoD, NASA, and Coast Guard agency findings under 17.105-2(b) include cost savings, stable design, minimal technical risk, reasonable expectation of continued funding, and realistic estimates.

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