Multi-year Contracts Cancellation fee

[Locke]

If you have a multi-year contract for three years for the initial performance and include two option years to round out the 5 year PoP, does the cancellation fee only apply for the program years 2 and 3?

FAR Clause 52.217-2(d)states:

(1) Cost--

(i) Incurred by the Contractor and/or subcontractor;

(ii) Reasonably necessary for performance of the contract; and

(iii) That would have been equitably amortized over the entire multi-year contract period but, because of the cancellation, are not so amortized; and

(2) A reasonable profit or fee on the costs.

* Does over the entire multi-year contract period include any options or just the program years?

[Navy_Contracting_4]

Yes, the cancellation charge will only apply for program years 2 and 3.

You say you have a 3-year multi-year, so "over the entire multiyear contract period" includes only the period for those three years of requirements. The options are beyond the "multiyear period."

[Locke]

_{Thank you.}

_{That was my assumption.}