FAR 17.105—Policy.

Uses.

FAR 17.105-1 explains when the multi-year contracting method may be used and what findings must support that decision. It covers two different approval standards: one for civilian agencies generally, and a more specific standard for DoD, NASA, and the Coast Guard when buying supplies. It also states that multi-year contracting may be used for supplies or services, and it addresses the funding risk that if later-year appropriations are not made, the agency must cancel the contract. In practice, this section is about balancing competition, economy, and program stability against the risk of committing to future requirements before all funds are available. Contracting officers and program officials use it to justify whether a multi-year approach is appropriate, while contractors need to understand that these contracts can be canceled if future funding does not materialize.

Objectives.

FAR 17.105-2 explains the policy objectives that justify using multi-year contracting. It does not itself authorize every multi-year contract; instead, it identifies the benefits the Government should seek when deciding whether a multi-year approach is appropriate. The section names eight specific objectives: lower costs, enhanced standardization, reduced administrative burden, continuity of production or performance, stabilization of contractor workforces, avoidance of repeated quality-control setup, broader competition, and incentives for productivity investments. In practice, this provision helps contracting officers and program officials evaluate whether a multi-year strategy is likely to produce measurable value over annual contracting. It is especially relevant when requirements involve startup costs, recurring production, long lead times, or opportunities for efficiency gains that are lost if the Government recompetes every year. The section is a planning and justification tool, helping agencies align acquisition strategy with mission needs and cost-effectiveness.