NASA/NOAA Anchor Tenancy

51 U.S.C. Section 50503 authorizes the Administrators of NASA and NOAA to enter into multi-year anchor tenancy contracts with termination liability.

§50503. Anchor tenancy and termination liability

(a) Anchor tenancy contracts. –
Subject to appropriations, the Administrator or the Administrator of the National Oceanic and Atmospheric Administration may enter into multiyear anchor tenancy contracts for the purchase of a good or service if the appropriate Administrator determines that –

  • (1) the good or service meets the mission requirements of the Administration or the National Oceanic and Atmospheric Administration, as appropriate;
  • (2) the commercially procured good or service is cost effective;
  • (3) the good or service is procured through a competitive process;
  • (4) existing or potential customers for the good or service other than the United States Government have been specifically identified;
  • (5) the long-term viability of the venture is not dependent upon a continued Government market or other nonreimbursable Government support; and
  • (6) private capital is at risk in the venture.

(b) Termination liability. –

  • (1) In general. – Contracts entered into under subsection (a) may provide for the payment of termination liability in the event that the Government terminates such contracts for its convenience.
  • (2) Fixed schedule of payments and limitation on liability. – Contracts that provide for the payment of termination liability, as described in paragraph (1), shall include a fixed schedule of such termination liability payments. Liability under such contracts shall not exceed the total payments which the Government would have made after the date of termination to purchase the good or service if the contract were not terminated.
  • (3) Use of funds. – Subject to appropriations, funds available for such termination liability payments may be used for purchase of the good or service upon successful delivery of the good or service pursuant to the contract. In such case, sufficient funds shall remain available to cover any remaining termination liability.

(c) Limitations. –

  • (1) Duration. – Contracts entered into under this section shall not exceed 10 years in duration.
  • (2) Fixed price. – Such contracts shall provide for delivery of the good or service on a firm, fixed price basis.
  • (3) Performance specifications. – To the extent practicable, reasonable performance specifications shall be used to define technical requirements in such contracts.
  • Failure to perform. – In any such contract, the appropriate Administrator shall reserve the right to completely or partially terminate the contract without payment of such termination liability because of the contractor’s actual or anticipated failure to perform its contractual obligations.

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