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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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