- 49 - 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 unfundedPage: Previous 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 Next
Last modified: May 25, 2011