PUBLIC LAW 107-347—DEC. 17, 2002 116 STAT. 2933 competitively at a fair and reasonable price if the contract is limited in duration to a period of five years or less; and "(ii) usage of the information technology to be acquired is likely to continue for a period of time sufficient to generate reasonable benefit for the government. "(3) Contracts awarded pursuant to the authority of this section shall, to the maximum extent practicable, be performance-based contracts that identify objective outcomes and contain performance steindards that will be used to measure achievement and milestones that must be met before payment is made. "(4) Contracts awarded pursuant to the authority of this section shall include a provision containing a quantifiable baseline that is to be the basis upon which a savings share ratio is established that governs the amount of payment a contractor is to receive under the contract. Before commencement of performance of such a contract, the senior procurement executive of the agency shall determine in writing that the terms of the provision are quantifiable and will likely yield value to the Government. "(5)(A) The head of the agency may retain savings realized through the use of a share-in-savings contract under this section that are in excess of the total amount of savings paid to the contractor under the contract, but may not retain any portion of such savings that is attributable to a decrease in the number of civilian employees of the Federal Government performing the function. Except as provided in subparagraph (B), savings shall be credited to the appropriation or fund against which charges were made to csury out the contract and shall be used for information technology, "(B) Amounts retained by the agency under this subsection shall— "(i) without further appropriation, remain avadlable until expended; and "(ii) be applied first to fund any contingent liabilities associated with share-in-savings procurements that are not fully funded. "(b) CANCELLATION AND TERMINATION. —(1) If funds are not made available for the continuation of a share-in-savings contract entered into under this section in a subsequent fiscal year, the contract shall be canceled or terminated. The costs of cancellation or termination may be paid out of— "(A) appropriations available for the performance of the contract; "(B) appropriations available for acquisition of the information technology procured under the contract, and not otherwise obligated; or "(C) funds subsequently appropriated for payments of costs of cancellation or termination, subject to the limitations in paragraph (3). "(2) The amount payable in the event of cancellation or termination of a share-in-savings contract shall be negotiated with the contractor at the time the contract is entered into. "(3)(A) Subject to subparagraph (B), the head of an agency may enter into share-in-savings contracts under this section in any given fiscal year even if funds are not made specifically available for the full costs of cancellation or termination of the contract if funds are avcdlable and sufficient to make payments with respect to the first fiscal year of the contract and the following conditions
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