(b) SAMPLE CANCELLATION CEILING CLAUSE

(1) There is no FAR-level clause that sets forth cancellation ceilings for each year. However, FAR 17 requires that cancellation ceilings be established and specifies that such ceilings and dates applicable to each program year subject to a cancellation be included in a contract clause. Additionally, FAR 17 specifies that, in negotiated acquisitions, the ceilings be negotiated prior to contract award. The agreed upon cancellation ceilings and dates must then be included in the contract's Schedule, in accordance with paragraph FAR 52.217‑2, "Cancellation Under Multi-year Contracts." The sample clause below may be used to cite the cancellation ceilings.

Sample

CANCELLATION CEILING (CLAUSE)

Cancellation will occur if the Contracting Officer fails to notify the Contractor that funds are available by the respective dates indicated below. The following cancellation ceilings are established:

Second Program Year:

Cancellation Ceiling

 

-$_______NTE

Date/Period*

 

Third Program Year:

Cancellation Ceiling

 

-$_______NTE

Date/Period*

 

Fourth Program Year:

Cancellation Ceiling

 

-$_______NTE

Date/Period*

 

Fifth Program Year:

Cancellation Ceiling

 

-$_______NTE

Date/Period*

 

 

 

 

 

 

 

 

Figure 12.B

 

 

 

Note: * The dates entered here must be the same as the dates entered in the SCR on "Multi-year Contract Funding" discussed later in this chapter.