(a) WHY YOU NEED TO VALIDATE MULTI-YEAR SAVINGS

(1) It is a statutory requirement. 10 USC 2306b(a) says the head of an agency may enter into multi-year contracts whenever "the use of such a contract will result in substantial savings of the total anticipated costs of carrying out the program through annual contracts" and "the estimates of both the cost of the contract and the anticipated cost avoidance through the use of a multi-year contract are realistic."

(2) It is a regulatory requirement. This requirement has been implemented in the FAR and DFARS. The FAR and DFARS require that "a multi-year contract may not be executed until" the agency head makes a written determination that the multi-year criteria have been met. The FAR and DFARS do not tie this requirement to a specific milestone in the acquisition process. AFFARS cites that before entering into any multi-year contract, the contracting officer shall review current statute and other Congressional language for potential restrictions.