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  • Question

    Is there existing literature or guidelines with how an Advacned Acquisition Contract (AAC) can be utilized?


    Answer

    Advance acquisition contracts (AAC) refer to what the DFARS calls "advance procurements" at DFARS 217.103. It provides for an exception to the "full funding" policy that requires components be acquired in same fiscal year as the associated end item. AACs are typically used for major systems that require materials, parts, and components be produced well before full-rate production begins. Congressional authorization is required for such contracts. This excerpt is taken from the DoD Financial Management Regulation:

    "Advance Procurement. Authority provided in an appropriations act to obligate and disburse during a fiscal year before that in which the related end item is procured. The funds are added to the budget authority for the fiscal year and deducted from the budget authority of the succeeding fiscal year. Used in major acquisition programs for advance procurement of components whose long-lead-times require purchase early in order to reduce the overall procurement lead-time of the major end item. Advance procurement of long lead components is an exception to the DoD 'full funding' policy and must be part of the President’s budget request."

    I don't know of any documentation that contains specific guidance on AAPs, other than the brief DFARS/FMR coverage of advance procurements mentioned above.

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