FAR 17.109

(a) The contracting officer shall insert the clause at 52.217-2 , Cancellation Under Multi-year Contracts, in solicitations and contracts when a multi-year contract is contemplated. (b) Economic price adjustment clauses . Economic price adjustment clauses are adaptable to multi-year contracting needs. When the period of production is likely to warrant a labor and material costs contingency in the contract price, the contracting officer should normally use an economic price adjustment clause (see 16.203 ). When contracting for services, the contracting officer- (1) Shall add the clause at 52.222-43 , Fair Labor Standards Act and Service Contract Labor Standards- Price Adjustment (Multiple Year and Option Contracts), when the contract includes the clause at 52.222-41 , Service Contract Labor Standards; (2) May modify the clause at 52.222-43 in overseas contracts when laws, regulations, or international agreements require contractors to pay higher wage rates; or (3) May use an economic price adjustment clause authorized by 16.203 , when potential fluctuations require coverage and are not included in cost contingencies provided for by the clause at 52.222-43 .

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