The Financial Cost and Benefit of Multi-Year Procurements

June, 2013
IDA document: D-4895
FFRDC: Systems and Analyses Center
Type: Documents
Division: Cost Analysis and Research Division
Authors:

Authors

Bruce R. Harmon, Scot A. Arnold See more authors

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The Financial Cost and Benefit of Multi-Year Procurements

Multi-year procurement (MYP) allows the Department of Defense to enter into up to a five-year contract to procure items that would otherwise be purchased through annual lot buys. By reducing the government’s flexibility to change the quantities it buys each year, the contractor must commit to a significant price reduction over annual purchases of the same quantity.