- 51 - multiyear contracts, was not fully funded at its inception, and that the Government retained the right to cancel unfunded portions of Contract 2034 in certain circumstances. We find petitioner’s interpretation to be correct and consistent with the analysis of the above-quoted cases holding that the Government’s ability to cancel a multiyear contract is not discretionary, but is limited to situations in which Congress fails to appropriate funds for the goods ordered under the contract, or the Government no longer has a need for the goods ordered under the contract. Contract 2034 obligated the Air Force to fund each program year under the contract as long as Congress continued to appropriate funds and the Air Force continued to need the F-16's ordered under Contract 2034. If, for example, costs of petitioner’s performance dramatically declined during the term of Contract 2034, the Air Force was not entitled to cancel Contract 2034 or require petitioner to produce the remaining F-16's at a lower price. The Air Force’s ability to cancel prior to full funding of all 4 fiscal years was sufficiently limited as a matter of Government contracting law so as to deplete the substance of respondent's claim that the funding of each successive fiscal year was merely an increase in order quantity. The Air Force did not have unqualified or unlimited legal power to cancel, and the 480 aircraft procured were interdependently priced.Page: Previous 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Next
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