ABSTRACT

Multiyear Procurement (MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues for Congress [November 30, 2011]   [open pdf - 380KB]

"Multiyear procurement (MYP) and block buy contracting (BBC) are special contracting mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number of defense acquisition programs. Compared to the standard or default approach of annual contracting, MYP and BBC have the potential for reducing weapon procurement costs by several percent. [...] BBC is similar to MYP in that it permits DOD to use a single contract for more than one year's worth of procurement of a given kind of item without having to exercise a contract option for each year after the first year. BBC is also similar to MYP in that DOD needs congressional approval for each use of BBC. BBC differs from MYP in the following ways: (1) There is no permanent statute governing the use of BBC. (2) There is no requirement that BBC be approved in both a DOD appropriations act and an act other than a DOD appropriations act. (3) Programs being considered for BBC do not need to meet any legal criteria to qualify for BBC, because there is no permanent statute governing the use of BBC that establishes such criteria. (4) A BBC contract can cover more than five years of planned procurements. (5) Economic order quantity (EOQ) authority--the authority to bring forward selected key components of the items to be procured under the contract and purchase the components in batch form during the first year or two of the contract--does not come automatically as part of BBC authority because there is no permanent statute governing the use of BBC that includes EOQ authority as an automatic feature. (6) BBC contracts are less likely to include cancellation penalties. Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used, and whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute that governs the use of MYP."

Report Number:
CRS Report for Congress, R41909
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Date:
2011-11-30
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Copyright:
Public Domain
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