Is anyone familiar with any regulations which allow for 40 year contracts anywhere in the federal govt?

By joel hoffman on Monday, March 05, 2001 - 06:47 pm:

Do you mean 40 years without any renewals in between, or do you mean contract extensions for 40 years?

By formerfed on Tuesday, March 06, 2001 - 07:36 am:

Several situations come to mind. Can you be more specific on the circumstances that prompted this question? Or are you just curious in general?

By Anonymous on Tuesday, March 06, 2001 - 11:21 am:

I guess I mean with renewals. Someone mentioned to me that such contracts were being done now but I cannot find anything ,anywhere that alludes to it. I am looking to see what is possible these days.

By formerfed on Tuesday, March 06, 2001 - 12:48 pm:

FAR part 17 limits contract periods to 5 years, unless otherwise approved in accordance with agency procedures. For starters, many agencies permit longer terms. This is particularly true with facility and plant operations. I heard one Energy contract is going on many decades of existance. GSA has very long term contracts for lease of real property. I'm aware of a recent award for 30 years. Also, the FAR part 17 restriction doesn't apply to IT. There are many, many IT contracts for very long term (but I haven't heard of any close to 40 years).

By joel hoffman on Tuesday, March 06, 2001 - 02:41 pm:

Bob, I believe, mentioned earlier, that there are some contracts with DOE, which have the same contract numbers, as when they were issued under the COE's Manhattan Project! As long as DOE can justify Part 6 exemptions from CICA, they probably can renew the contracts.

Happy Sails!
Joel

By bob antonio on Tuesday, March 06, 2001 - 03:09 pm:

Here is a list of some contracts. In theory, a Federally Funded Research and Development Center contract could last for eternity.

These listed contracts would fall under DOE's Management and Operating (M&O) contracts in Part 70 of the DEAR. You can find it under regulations to the left.

They usually were for 5 years with a renewal period. In my opinion, although M&O and FFRDC contracts, the following list fall into a special category--with no formal name--that may last for a great deal longer. They all exceed 50 years with the same contractor and have never been competed. The actual clauses have changed over their lives but they are the initial contract numbers.

http://www.radix.net/~ambrose/forumUCCON.htm

By Anonymous on Tuesday, March 06, 2001 - 09:06 pm:

FAR Part 17 does not generally limit the length of contracts. FAR Part 17 says that when a contract includes options it may not exceed five years in length or procure more than five years' worth of requirements for supplies unless approved in accordance with agency procedures.

The contract between the U.S. and the University of California for the operation of Los Alamos National Laboratory has been in effect since 1943.

The most important limit on the length of a contract is the source of funding.

By formerfed on Wednesday, March 07, 2001 - 07:17 am:

Anon,

I don't follow your last comment - "the most important limit on length is source of funding". Most funding is annual. What are you implying?

Assuming agency regs permit longer than five years. From a practical standpoint, vendor's reluctance to bid finitely determinable option prices in out-years will restrict contract length. If companies choose to bid long periods, they most likely will include large contingencies.

By bob antonio on Wednesday, March 07, 2001 - 07:23 am:

I posted a note of this on the Today's News page. It is a contract for 50 years under the Residential Communities Initiative.

http://www.dtic.mil/armylink/news/Mar2001/r20010306meaderci.html

By bob antonio on Wednesday, March 07, 2001 - 07:42 am:

Here is another program that permits contracts up to 25 years. It is similar to the idea behind the RCI above.

http://www.eren.doe.gov/femp/financing/espc_intro.html

I seem to remember 40 years attached to untility contracts somewhere. However, I cannot remember where.

By Anonymous on Wednesday, March 07, 2001 - 08:01 am:

Thanks to all--you guys are the best.

By formerfed on Wednesday, March 07, 2001 - 08:09 am:

Bob,

Thanks. This is an excellent example of some of the truly innovative and creative things going on today. It also ties into some comments I made in another thread about the need for 1102's to break out of the "regulation expert" mode into a "business broker".

By Scott on Thursday, March 08, 2001 - 11:45 am:

This is new language in our budget...if we do one for 40 years I will let you know!! With this wide language I feel any term we justify has reasonable is allowed.

SEC. 119. Not with standing any other provision of law, including section4(d) of the Service Contract Act of 1965 (41U.S.C. 353(d)), the Attorney General hereafter may enter into contracts and other agreements, of any reasonable duration, for detention or incarceration space or facilities, including related services, on any reasonable basis.

This title may be cited as the "Department of Justice Appropriations Act, 2001"

By bob antonio on Thursday, March 08, 2001 - 12:44 pm:

Thanks Scott. What is the reasonable life for a prison?

By Anonymous on Thursday, March 08, 2001 - 03:53 pm:

10 to 20

By Scott on Friday, March 09, 2001 - 02:37 pm:

Approx...35-50 years

By Rob Lloyd on Monday, March 19, 2001 - 02:45 pm:

At the former Defense Fuel Supply Center (now Defense Energy Supply Center), there was a contract with Caltex known as the "Evergreen" contract. As I recall, the contract began around WW2 and continued at least to 1980. Before the Govt would award a new contract in a particular region, Caltex was given an opportunity to match or beat the price, and their contract would be modified to keep it going. We sometimes referred to this as a "large business set-aside," since Caltex was not small.

By Paul McQuade on Wednesday, April 04, 2001 - 12:07 pm:

There are some unique contract situations out there, such as with USFS. They are authorized until Title 16 to enter into a 100 year contract in 1946...which is about half up.

I recall a study, in the procurement context I believe, that discouraged the use of long term contracts based upon the complications they create. I think GAO might have done it in the 1970s or 80s. Does anyone know?