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the enhanced versions more affordable. One approach explored by
the Air Force and GENDYN was to use multiyear contracts (a
contract covering more than 1 year) rather than a series of
single-year contracts. From GENDYN’s point of view, single-year
contracts provided little incentive to invest in capital
equipment or otherwise attempt to reduce its costs.
Additionally, they did not allow GENDYN to take advantage of
quantity discounts in ordering materials from subcontractors and
related suppliers. Finally, GENDYN found the single-year
contract approach to be more expensive to negotiate and
administer, and it resulted in higher overhead costs per
aircraft.
The Air Force, however, could not make a contractual
commitment that transcended the Government's fiscal year because
of the Antideficiency Act, 31 U.S.C. sec. 1341 (1994) (formerly
31 U.S.C. sec. 665). The Antideficiency Act prohibits the
executive branch from obligating funds not yet appropriated by
Congress. Multiyear contracting is an exception to the full-
funding rule.
A multiyear contract enabled the Government to provide for
up to 5 years of requirements without authorized full funding at
the awarding of a contract. With a multiyear contract, the first
year's requirement is usually funded in full, but the ensuing
years’ are not. A multiyear contract commits the Government to
purchase the quantity of items specified in the contract. The
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