(ii) Step Two: Tailor the "Limitation of Price and Contractor Obligation" SCR if an EOQ Multi-year Contract will be Used.

Paragraph (c) of the suggested SCR in Step One is suitable for a non-EOQ multi-year contract. It must be changed for an EOQ multi-year contract, which does not require the contractor to perform work and incur costs applicable to out-year end items. The following language should work for most EOQ multi-year contracts:

"(c) The Contractor may incur labor, material, and other associated recurring costs to satisfy requirements of any program year under this contract, provided that the costs are (1) reasonable, allocable, and allowable; (2) properly incurred under the contract; and (3) either fully funded or funded with advance procurement funds consistent with special contract requirements entitled "Multi-year Contract Funding" and "Cancellation Particulars."