The following has triggered quite the debate at work:

We have a 6 1/2 year year Foreign Military Sales (FMS) requirement. It will be a "C Type" contract with no options. It will be funded 100% upfront with non-expiring FMS funds. 

Will this be a multi-year or multiple year contract?

What difference does it make?

What if someone told you that it is neither?

FAR 17.103 - Multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years. A multi-year contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds, and (if it does so provide) may provide for a cancellation payment to be made to the contractor if appropriations are not made. The key distinguishing difference between multi-year contracts and multiple year contracts is that multi-year contracts, defined in the statutes cited at 17.101, buy more than 1 year’s requirement (of a product or service) without establishing and having to exercise an option for each program year after the first.

 

Here is the start but a read of 10 USC 2306b may help as well........"(a) In general. --To the extent that funds are otherwise available for obligation, the head of an agency may enter into multiyear contracts for the purchase of property whenever the head of that agency finds each of the following:....."

3 hours ago, Fear & Loathing in Contracting said:

The following has triggered quite the debate at work:

We have a 6 1/2 year year Foreign Military Sales (FMS) requirement. It will be a "C Type" contract with no options. It will be funded 100% upfront with non-expiring FMS funds. 

Will this be a multi-year or multiple year contract?

For what purpose are you trying to classify the contract?

11 minutes ago, Don Mansfield said:

non-expiring FMS funds

By this do you mean funds provided by the foreign country?

1 hour ago, Retreadfed said:

By this do you mean funds provided by the foreign country?

yes sir

 

2 hours ago, Don Mansfield said:

For what purpose are you trying to classify the contract?

How the contract is classified will drive what type of approvals I will have to pursue from those above me. 

4 hours ago, C Culham said:

FAR 17.103 - Multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years. A multi-year contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds, and (if it does so provide) may provide for a cancellation payment to be made to the contractor if appropriations are not made. The key distinguishing difference between multi-year contracts and multiple year contracts is that multi-year contracts, defined in the statutes cited at 17.101, buy more than 1 year’s requirement (of a product or service) without establishing and having to exercise an option for each program year after the first.

 

Here is the start but a read of 10 USC 2306b may help as well........"(a) In general. --To the extent that funds are otherwise available for obligation, the head of an agency may enter into multiyear contracts for the purchase of property whenever the head of that agency finds each of the following:....."

thank you- yes I have read through these- and since we are buying more 6 1/2 years worth of a requirement at one time and there are no options- sure looks like a multi-year contract to me. When I raised this with my supervisor, he said no way it was multi-year since it was not approved by Congress. I went to the Policy folks at HQ and they agree with me... but then legal came back and agreed with my supervisor. We are all at a loss at this point and are open to some other opinions hahaha!

Fear, have you thought about contacting DSCA to find out what they think since they are the experts on FMS procurements?

52 minutes ago, Fear & Loathing in Contracting said:

How the contract is classified will drive what type of approvals I will have to pursue from those above me. 

Ok, but what set of rules are trying to apply? There's no universal definition of multi-year contract. Are you asking to determine whether FAR subpart 17.1 applies? If so, then the contract you described would not meet the definition of multi-year contract if you would be purchasing for more than 5 program years.

Fear,

I asked what difference does it make, and Don asked what set of rules are you trying to apply.  These are both fair questions.

The GAO decision at the link below discusses the two, and shows how sometimes a contract is both and sometimes it is neither.

https://www.gao.gov/decisions/appro/302358.htm

3 hours ago, Don Mansfield said:

Ok, but what set of rules are trying to apply? There's no universal definition of multi-year contract. Are you asking to determine whether FAR subpart 17.1 applies? If so, then the contract you described would not meet the definition of multi-year contract if you would be purchasing for more than 5 program years.

No expert here but I like finding stuff that will help.  @Retreadfedprobably has the best idea but I did want to provide the following.  Like always a specific offered as exemplified by  Don's post also depends on more specifics.....

Noted FAR 17.104(a) provides an exception.  As FMS funds are considered to be "nonexpiring" makes me wonder if the 5 year rule has an exception for FMS.  https://www.dcma.mil/Portals/31/Documents/Policy/DCMA-MAN-2501-03.pdf

Yet a read of the DFARS provides only discussion on use of options for FMS contracts making me wonder if it is the only idea available for a proposed 6.5 year FMS contract need.  https://www.acquisition.gov/dfarspgi/pgi-217.202-use-options.#DFARS-PGI_PGI_217.202

In the the end if it is okay not to use options by statute then my simple read is that it is a multiple year contract and somehow the exception at 17.104 fits.

Beyond asking DSCA it would be interesting to ask the decision makers these questions. 

1.   Supervisor why can we do a contract for 6.5 years if not approved by congress? After all it seems the supervisor is fine with 6.5 years unless he/she is also encouraging options?   

2.  Policy folks why do you agree?  Or in other words do you have a statute you can point me to that suggests that a 6.5 year contract is okay?  The 17.104 exception could then apply.

3. Legal on what basis do you believe their is no congressional authority for 6.5 year contract.

In the end - 6.5 year contract if there is statutory exception - multi-year.   If no statutory exception a base period contract (something like ji's GAO decision example) option periods - multiple year.

 

To me, it’s neither.  Unless I’m missing something it seems like a contract for some defined quantity over a 6.5 year period.  There aren’t options and full funding is provided upfront.

“22.1001 Definitions...

Multiple year contracts means contracts having a term of more than 1 year regardless of fiscal year funding.”

Although multi-year contracts are multiple year contracts, the definition for multi-year contracts limits such to five years. So, to answer the original question, it’s a multiple year contract but not a multi-year contract.

FMS cases have their own specific authorities, don’t they?

Synonyms for “regardless” and “regardless of” from LEXICO:

“SYNONYMS

irrespective of, without regard to, without reference to, disregarding, unmindful of, heedless of, careless about, careless of, indifferent to, unconcerned about, without consideration of, negligent of, setting aside, discounting, ignoring, notwithstanding, no matter, despite, in spite of, for all

informal irregardless of”

After reading Joel’s post, I looked further into this.  I’m always skeptical of anything DOL is responsible for (FAR 22) because it’s so biased in DOLs positions.  Anyway the GAO decision ji20874 cited has this information from Cibiinic and Nash

Quote

A few years after the enactment of FASA, Professors Cibinic and Nash noted the "confusion" created by the failure to distinguish between "multi-year contracting" and "multiple year contracts": 

" Multiple-Year Requirements Contracts Distinguished We use the term multiple-year' to distinguish such a contract from a multiyear' contract. This is not just an exercise in semantics. Considerable confusion has arisen through overly broad use of the term "multiyear." That term should only be used when referring to the unique arrangements covered in FAR Subpart 17.1 . . . . At present, FAR Part 17 does not use the term multiple-year contract.' We use it here to refer to a contract that covers performance over a number of years but is not a multiyear contract. It could be a contract for supplies or nonseverable services that require more than one year to perform." 

Ralph C. Nash and John Cibinic, Multiple-Year Task and Delivery Order Contracts: Can Annual Funds Be Used?, Nash & Cibinic Report, June 1996 at 31. [13] See also W.Noel Keyes, Keyes Encyclopedic Dictionary of Contract and Procurement Law , 5th Ed., 1992 at 30, 32 (definitions of "multi-year contracts" and "multiple year contracts"). 

In this instance it’s a fully funded contract extending over a period that doesn’t include options.  It’s not a multi-year contract.  Why even go further?  The multiple year term isn’t mentioned anywhere in the FAR except for part 22 which DoL uses to administer compensation laws.

Hmmmm....The Red Book Vol I, Chapter 5, page 5-37- Excerpt with footnote......

"Any discussion of multiyear contracting must inevitably combine the bona fide needs rule with material from Chapter 6 on the Antideficiency Act and from Chapter 7 on obligations. The term “multiyear contract” has been used in a variety of situations to describe a variety of contracts touching more than one fiscal year. To prevent confusion, we think it is important to start by establishing a working definition. A multiyear contract, as we use the term in this discussion, is a contract covering the requirements, or needs, of more than one fiscal year.22 A contract for the needs of the current year, even though performance may extend over several years, is not a multiyear contract. We discuss contracts such as these, where performance may extend beyond the end of the fiscal year, in sections B.4 and B.5 of this chapter. Thus, a contract to construct a ship that will take 3 years to complete is not a multiyear contract; a contract to construct one ship a year for the next 3 years is.

22 This is essentially the same as the definition in the Federal Acquisition Regulation, “a contract for the purchase of supplies or services for more than 1, but not more than 5, program years.” 48 C.F.R. § 17.103."

And even though I will be in the minority it seems to me that FAR 17.103 does mention multiple year in distinguishing multi-year, ergo a definition by default so to speak.

"The key distinguishing difference between multi-year contracts and MULTIPLE YEAR contracts is that multi-year contracts, defined in the statutes cited at 17.101, buy more than 1 year’s requirement (of a product or service) without establishing and having to exercise an option for each program year after the first."

Further read of the Red Book got me to the point of why stop now.......of interest.  And I have gone 360 and suggest that Retreads suggestion to contact DSAA is the best idea.

From page 3-38 of the Vol I...short but interesting excerpt....emphasis added

"A good illustration of how all of this can work is found in B-222666, Jan. 11, 1988. The Defense Security Assistance Agency (DSAA) is responsible for issuing instructions and procedures for Foreign Military Sales (FMS) transactions...."

And from https://samm.dsca.mil/chapter/chapter-6#C6.T1.   Again emphasis added.....

C6.3. - Case Execution - Acquisition

C6.3.1. Compliance with DoD Regulations and Procedures. Acquisition for FMS purchasers must be in accordance with DoD regulations and other applicable USG procedures. This affords the foreign purchaser the same benefits and protection that apply to DoD procurement and is one of the principal reasons why foreign governments and international organizations prefer to procure through FMS channels. FMS requirements may be consolidated with USG requirements or placed on separate contract whichever is more expedient and cost effective. Federal Acquisition Regulation (FAR) provisions applicable to the DoD also apply to FMS procurements. While all FAR and Defense FAR Supplement (DFARS) clauses apply to FMS procurements, Table C6.T1. lists selected sections with unique application to FMS.

Not disagreeing with anything posted but I’m not sure if any of Carl’s research applies.  Money from foreign governments goes into a special US Trust Fund.  It has no fiscal year identity like appropriated funds.  So I don’t see the Bona Fide Need rule applying.  In other words, needs are those of a foreign government who’s furnishing money and there are no appropriation actions by the US.

19 hours ago, formerfed said:

 It has no fiscal year identity like appropriated funds.

No disagreement yet it would be my view that in the scheme of things that the rest of the reasoning applies.  In other words multi-year is an issue directly related to appropriation law and as such determining what is and what is not multi-year is determined from that standpoint.  By example you hold up bona fide need yet you do not hold up antideficiency as well.  Not that I want to get into some discussion about antideficiency but generally speaking if there is no money in the trust fund and someone used money from it I would suspect one enters the world of antideficiency.  I realize in the scheme of things this could not happen these days with all the electronic checks and balances but all the same using money that congress did not allow (via a trust fund) gets you there.

Added is a full read of the DCMA Fund Cycle document I posted a link too previously. I could be way off but once the trust fund is established, which in fact is a combination of foreign and appropriated dollars, all become the trust fund "color of money".   As such it does not expire as you provide by saying "no fiscal year" identity.  Which by my reasoning circles me back to the FAR stated exception to the 5 year standard and then brings in the multi-year definition that if the OP's contract if in fact buying more than one years requirement and it does not use options it is a multi-year contract. 

All said I keep repeating myself in different context to the thoughts posted by others so I will just resign myself from this discussion thread with the thought that I hope the OP finds someone within his/her leadership that will give an answer that helps move the project forward.

 

6 hours ago, C Culham said:

All said I keep repeating myself in different context to the thoughts posted by others so I will just resign myself from this discussion thread with the thought that I hope the OP finds someone within his/her leadership that will give an answer that helps move the project forward.

 

👍 Happy Thanksgiving Carl