General Dynamics Corporation and Subsidiaries - Page 49

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          the aircraft approached the 480th unit, the possibility and                 
          potential for significant impact from design and production                 
          problems must lessen.  We have no difficulty, however, finding              
          that the 480 aircraft to be manufactured under Contract 2034 were           
          interdependently priced.                                                    
               Contract 2034 imposed a binding obligation on the Air Force            
          to fund successive program years, except in the event that                  
          Congress failed to appropriate funds or the Air Force terminated            
          the contract for convenience or default.  The successive funding            
          of each fiscal year did not constitute a new order or exercise of           
          an option.  In Beta Sys., Inc. v. United States, 838 F.2d 1179,             
          1183 n.2 (Fed. Cir. 1988), the court explained the operation of a           
          multiyear contract and the effect of funding as follows:                    
               When the government enters into a multi-year                           
               procurement, as here, the negotiated terms apply to the                
               full procurement whether or not funding has been                       
               approved for all years of the contract.  This contract,                
               like all governmental undertakings, contains the                       
               panoply of clauses by which the government can                         
               terminate the contract, or authorize the stepwise                      
               progression of its performance over its multi-year                     
               term.  These assorted termination rights do not relieve                
               either the government or the contractor of its                         
               obligations as set forth in a multi-year contract that                 
               is not terminated.  Otherwise, rational multi-year and                 
               long-lead procurement would be impossible.  [Citation                  
               omitted.]                                                              
               A multiyear contract obligates the Government to complete              
          the funding for the entire contract absent a valid basis for                
          canceling the contract:                                                     
                    The fact that the requirements for the years after                
               the first year in a multi-year procurement are unfunded                



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