(ii)  Step Two: Establish the Points in Time When the Contract Could be Canceled.

Draw yourself a timeline beginning with the date you expect the multi-year contract to be awarded. Mark on the time line the points at which the contract could be canceled. You should estimate the cancellation ceiling associated with each potential cancellation on your time line.

Note: Follow steps three through eleven to estimate the cancellation ceiling for the cancellation that could occur at the end of the first year of the multi-year contract. Follow the steps again to estimate the cancellation ceiling for the cancellation that could occur at the end of the second year of the multi-year contract. Repeat the procedure for each year of potential cancellation.