Five-Year Limit on Government Contracts

The FAR has language (below) for contracting officers to follow to limit contracts in length to 5 years. The limitation generally has exceptions for contracting officers to allow for contracts exceeding 5 years. See the United States Department of Interior pdf on this page as an example.

File:DIAPR 2010-25 - DOI Approval for Contracts Exceeding 5 years.pdf

There is no specific statue preventing contracts from being more than 5 years, and this only applies to US Government "Prime Contracts." It does not apply to subcontracts.

FAR § 16.505(c)(1

A limitation on task order contracts for advisory and assistance services;

The limit in FAR § 16.505(c)(1) on the total ordering period of task order contracts for advisory and assistance services is not a limit on the duration of contractor performance.

FAR § 17.104(a)

A limitation on multi-year contracts;

The limit mentioned in FAR § 17.104(a) on multi-year contracts is not a limit on the delivery period of multi-year supply contracts. It is not an absolute limit on either multi-year supply or multi-year service contracts with options or award terms.

FAR § 17.204(e)

A limitation on contracts with options;

The limit in FAR § 17.204(e) on the total of the basic and option periods and quantities is not statutory and agencies can waive it in accordance with their own procedures. FAR § 22.1002-1, a limitation on contracts covered by the Service Contract Act of 1965, as amended, 41 U.S.C. § 353(d).

217.204 Contracts

(e)(i) Notwithstanding FAR 17.204(e), the ordering period of a task order or delivery order contract (including a contract for information technology) awarded by DoD pursuant to 10 U.S.C. 2304a—

(A) May be for any period up to 5 years;

(B) May be subsequently extended for one or more successive periods in accordance with an option provided in the contract or a modification of the contract; and

(C) Shall not exceed 10 years unless the head of the agency determines in writing that exceptional circumstances require a longer ordering period.