(a) HOW TO DEVELOP A CLIN STRUCTURE FOR A MULTI-YEAR CONTRACT
(1) General Guidelines. The FAR does not direct how multi-year contract CLINs are to be structured. Any approach is acceptable as long as it meets the basic rules for construction of CLINs in DFARS 204.71 and is within the general guidelines described below. The circumstances of the acquisition will determine what and how many CLINs are to be included in the solicitation and contract. However, the following general guidelines apply whether you will be using an EOQ multi-year contract or a Non-EOQ multi-year contract.
(i) The CLIN structure should be integrated with cancellation, funding, and other clauses and SCRs explaining how the CLINs are intended to work.
(ii) Research, Development, Test and Evaluation (RDT&E) CLINs should be clearly excepted from the multi-year label and the operation of the multi-year clauses as multi-year procurement does not apply to RDT&E.
(iii) Do not use the term "advance-buy" or "advance procurement" in both the annual-buy and multi-year contexts. It has too much potential for confusing people, particularly in a solicitation that requests both annual-buy and multi-year proposals. Instead, consistently use "long lead" in the annual-buy context and "advance procurement" and/or "EOQ" in the multi-year context. (This guideline should be followed throughout the contractual document.) The reasons for this guideline are that:
(A) The only form of advance procurement authorized on an annual-buy contract is long lead. AFFARS 5317.7402 establishes policies and procedures for long lead contracting.
(B) A multi-year contract may involve two forms of Advance procurement:
(1) Long lead advance procurement, necessary to meet a planned production delivery schedule, and/or;
(2) EOQ advance procurement, unique to multi-year contracts, which is undertaken for the purpose of reducing the cost of production end items (i.e. to save money).
In a multi-year contract involving both long lead and EOQ requirements, long lead can usually be accommodated within the EOQ acquisitions done early in the multi-year contract. Hence, EOQ tends to be the dominant form of advance procurement in the EOQ multi-year contract.
(iv) The CLINs should be structured so the associated costs can be readily identified and segregated to provide fiscal year integrity. Each fiscal year requirement must stand on its own and the funds for each fiscal year, with the exception of no year funds, must be separately accounted for and not intermingled.
(2) Developing a CLIN Structure
This subsection will take you through the following steps to develop a CLIN structure for your multi-year solicitation and resulting contract:
• Step One: Develop a Table of Requirements
• Step Three: Verify That Your CLIN Structure Accurately Reflects Requirements and Funding Constraints