22 U.S.C. § 2679a: Procurement contracts

appropriations are available and adequate for payment for the first fiscal year and for all potential cancellation costs; and the need of the Government for the property or service being acquired over the period of the contract is reasonably firm and continuing; such a contract will serve the best interests of the United States by encouraging effective competition or promoting economies in performance and operation; and such a method of contracting will not inhibit small business participation. In the event that funds are not made available for the continuation of such a contract into a subsequent fiscal year, the contract shall be cancelled and any cancellation costs incurred shall be paid from appropriations originally available for the performance of the contract, appropriations currently available for the acquisition of similar property or services and not otherwise obligated, or appropriations made for such cancellation payments.