olume i—parts to ederal acquisition regulationin the acquisition process. (6) the system must...

VOLUME I—PARTS 1 TO 51

FEDERALACQUISITION

REGULATION

ISSUED MARCH 2005 BY THE:

GENERAL SERVICES ADMINISTRATIONDEPARTMENT OF DEFENSENATIONAL AERONAUTICS AND SPACE ADMINISTRATION(This edition includes the consolidation of all Federal Acquisition Circulars through 2001-27)

TITLE 48—FEDERAL ACQUISITION REGULATIONS SYSTEM

Chapter 1

FEDERAL ACQUISITION REGULATION

Volume I

FOREWORD

This March 2005 edition is a complete reissue of the Federal AcquisitionRegulation (FAR). It includes all Federal Acquisition Circulars through2001-27.

The FAR is the primary regulation for use by all Federal Executive agencies intheir acquisition of supplies and services with appropriated funds. It becameeffective on April 1, 1984, and is issued within applicable laws under the jointauthorities of the Administrator of General Services, the Secretary of Defense,and the Administrator for the National Aeronautics and Space Administration,under the broad policy guidelines of the Administrator, Office of FederalProcurement Policy, Office of Management and Budget.

The FAR precludes agency acquisition regulations that unnecessarily repeat,paraphrase, or otherwise restate the FAR, limits agency acquisition regulationsto those necessary to implement FAR policies and procedures within an agency,and provides for coordination, simplicity, and uniformity in the Federalacquisition process. It also provides for agency and public participation indeveloping the FAR and agency acquisition regulation.


General Structure and Subparts

SUBCHAPTER A—GENERAL

PART 1—FEDERAL ACQUISITION REGULATIONS SYSTEM1.1 Purpose, Authority, Issuance1.2 Administration1.3 Agency Acquisition Regulations1.4 Deviations from the FAR1.5 Agency and Public Participation1.6 Career Development, Contracting Authority, and Responsibilities1.7 Determinations and Findings

PART 2—DEFINITIONS OF WORDS AND TERMS2.1 Definitions2.2 Definitions Clause

PART 3—IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST3.1 Safeguards3.2 Contractor Gratuities to Government Personnel3.3 Reports of Suspected Antitrust Violations3.4 Contingent Fees3.5 Other Improper Business Practices3.6 Contracts with Government Employees or Organizations Owned or Controlled by Them3.7 Voiding and Rescinding Contracts3.8 Limitation on the Payment of Funds to Influence Federal Transactions3.9 Whistleblower Protections for Contractor Employees

PART 4—ADMINISTRATIVE MATTERS4.1 Contract Execution4.2 Contract Distribution4.3 Paper Documents4.4 Safeguarding Classified Information Within Industry4.5 Electronic Commerce in Contracting4.6 Contract Reporting4.7 Contractor Records Retention4.8 Government Contract Files4.9 Taxpayer Identification Number Information4.10 Contract Line Items4.11 Central Contractor Registration4.12 Annual Representations and Certifications

i

STRUCTURE FEDERAL ACQUISITION REGULATION

SUBCHAPTER B—COMPETITION AND ACQUISITION PLANNING

PART 5—PUBLICIZING CONTRACT ACTIONS5.1 Dissemination of Information5.2 Synopses of Proposed Contract Actions5.3 Synopses of Contract Awards5.4 Release of Information5.5 Paid Advertisements5.6 Publicizing Multi-Agency Use Contracts

PART 6—COMPETITION REQUIREMENTS6.1 Full and Open Competition6.2 Full and Open Competition After Exclusion of Sources6.3 Other Than Full and Open Competition6.4 Sealed Bidding and Competitive Proposals6.5 Competition Advocates

PART 7—ACQUISITION PLANNING7.1 Acquisition Plans7.2 Planning for the Purchase of Supplies in Economic Quantities7.3 Contractor Versus Government Performance7.4 Equipment Lease or Purchase7.5 Inherently Governmental Functions

PART 8—REQUIRED SOURCES OF SUPPLIES AND SERVICES8.1 Excess Personal Property8.2 [Reserved]8.3 [Reserved]8.4 Federal Supply Schedules8.5 Acquisition of Helium8.6 Acquisition from Federal Prison Industries, Inc.8.7 Acquisition from Nonprofit Agencies Employing People Who Are Blind or Severely Disabled8.8 Acquisition of Printing and Related Supplies8.9 [Reserved]8.10 [Reserved]8.11 Leasing of Motor Vehicles

PART 9—CONTRACTOR QUALIFICATIONS9.1 Responsible Prospective Contractors9.2 Qualifications Requirements9.3 First Article Testing and Approval9.4 Debarment, Suspension, and Ineligibility9.5 Organizational and Consultant Conflicts of Interest9.6 Contractor Team Arrangements9.7 Defense Production Pools and Research and Development Pools

ii

FEDERAL ACQUISITION REGULATION STRUCTURE

PART 10—MARKET RESEARCH

PART 11—DESCRIBING AGENCY NEEDS11.1 Selecting and Developing Requirements Documents11.2 Using and Maintaining Requirements Documents11.3 Acceptable Material11.4 Delivery or Performance Schedules11.5 Liquidated Damages11.6 Priorities and Allocations11.7 Variation in Quantity11.8 Testing

PART 12—ACQUISITION OF COMMERCIAL ITEMS12.1 Acquisition of Commercial Items—General12.2 Special Requirements for the Acquisition of Commercial Items12.3 Solicitation Provisions and Contract Clauses for the Acquisition of Commercial Items12.4 Unique Requirements Regarding Terms and Conditions for Commercial Items12.5 Applicability of Certain Laws to the Acquisition of Commercial Items12.6 Streamlined Procedures for Evaluation and Solicitation for Commercial Items

SUBCHAPTER C—CONTRACTING METHODS AND CONTRACT TYPES

PART 13—SIMPLIFIED ACQUISITION PROCEDURES13.1 Procedures13.2 Actions At or Below the Micro-Purchase Threshold13.3 Simplified Acquisition Methods13.4 Fast Payment Procedure13.5 Test Program for Certain Commercial Items

PART 14—SEALED BIDDING14.1 Use of Sealed Bidding14.2 Solicitation of Bids14.3 Submission of Bids14.4 Opening of Bids and Award of Contract14.5 Two-Step Sealed Bidding

PART 15—CONTRACTING BY NEGOTIATION15.1 Source Selection Processes and Techniques15.2 Solicitation and Receipt of Proposals and Information15.3 Source Selection15.4 Contract Pricing15.5 Preaward, Award, and Postaward Notifications, Protests, and Mistakes15.6 Unsolicited Proposals

PART 16—TYPES OF CONTRACTS16.1 Selecting Contract Types16.2 Fixed-Price Contracts16.3 Cost-Reimbursement Contracts16.4 Incentive Contracts16.5 Indefinite-Delivery Contracts16.6 Time-and-Materials, Labor-Hour, and Letter Contracts16.7 Agreements

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PART 17—SPECIAL CONTRACTING METHODS17.1 Multi-year Contracting17.2 Options17.3 [Reserved]17.4 Leader Company Contracting17.5 Interagency Acquisitions Under the Economy Act17.6 Management and Operating Contracts

PART 18—RESERVED

SUBCHAPTER D—SOCIOECONOMIC PROGRAMS

PART 19—SMALL BUSINESS PROGRAMS19.1 Size Standards19.2 Policies19.3 Determination of Small Business Status for Small Business Programs19.4 Cooperation with the Small Business Administration19.5 Set-Asides for Small Business19.6 Certificates of Competency and Determinations of Responsibility19.7 The Small Business Subcontracting Program19.8 Contracting with the Small Business Administration (The 8(a) Program)19.9 Very Small Business Pilot Program19.10 Small Business Competitiveness Demonstration Program19.11 Price Evaluation Adjustment for Small Disadvantaged Business Concerns19.12 Small Disadvantaged Business Participation Program19.13 Historically Underutilized Business Zone (HUBZone) Program19.14 Service-Disabled Veteran-Owned Small Business Procurement Program

PART 20—RESERVED

PART 21—RESERVED

PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS22.1 Basic Labor Policies22.2 Convict Labor22.3 Contract Work Hours and Safety Standards Act22.4 Labor Standards for Contracts Involving Construction22.5 [Reserved]22.6 Walsh-Healey Public Contracts Act22.7 [Reserved]22.8 Equal Employment Opportunity22.9 Nondiscrimination Because of Age22.10 Service Contract Act of 1965, as Amended22.11 Professional Employee Compensation22.12 [Reserved]22.13 Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans22.14 Employment of Workers with Disabilities22.15 Prohibition of Acquisition of Products Produced by Forced or Indentured Child Labor22.16 Notification of Employee Rights Concerning Payment of Union Dues or Fees

iv


PART 23—ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE23.1 [Reserved]23.2 Energy and Water Efficiency and Renewable Energy23.3 Hazardous Material Identification and Material Safety Data23.4 Use of Recovered Materials23.5 Drug-Free Workplace23.6 Notice of Radioactive Material23.7 Contracting for Environmentally Preferable Products and Services23.8 Ozone-Depleting Substances23.9 Contractor Compliance with Toxic Chemical Release Reporting23.10 Federal Compliance with Right-to-Know Laws and Pollution Prevention Requirements

PART 24—PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION24.1 Protection of Individual Privacy24.2 Freedom of Information Act

PART 25—FOREIGN ACQUISITION25.1 Buy American Act—Supplies25.2 Buy American Act—Construction Materials25.3 [Reserved]25.4 Trade Agreements25.5 Evaluating Foreign Offers—Supply Contracts25.6 Trade Sanctions25.7 Prohibited Sources25.8 Other International Agreements and Coordination25.9 Customs and Duties25.10 Additional Foreign Acquisition Regulations25.11 Solicitation Provisions and Contract Clauses

PART 26—OTHER SOCIOECONOMIC PROGRAMS26.1 Indian Incentive Program26.2 Disaster or Emergency Assistance Activities26.3 Historically Black Colleges and Universities and Minority Institutions

SUBCHAPTER E—GENERAL CONTRACTING REQUIREMENTS

PART 27—PATENTS, DATA, AND COPYRIGHTS27.1 General27.2 Patents27.3 Patent Rights under Government Contracts27.4 Rights in Data and Copyrights27.5 [Reserved]27.6 Foreign License and Technical Assistance Agreements

PART 28—BONDS AND INSURANCE28.1 Bonds and Other Financial Protections28.2 Sureties and Other Security for Bonds28.3 Insurance

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PART 29—TAXES29.1 General29.2 Federal Excise Taxes29.3 State and Local Taxes29.4 Contract Clauses

PART 30—COST ACCOUNTING STANDARDS ADMINISTRATION30.1 General30.2 CAS Program Requirements30.3 CAS Rules and Regulations [Reserved]30.4 Cost Accounting Standards [Reserved]30.5 Cost Accounting Standards for Educational Institutions [Reserved]30.6 CAS Administration

PART 31—CONTRACT COST PRINCIPLES AND PROCEDURES31.1 Applicability31.2 Contracts with Commercial Organizations31.3 Contracts with Educational Institutions31.4 [Reserved]31.5 [Reserved]31.6 Contracts with State, Local, and Federally Recognized Indian Tribal Governments31.7 Contracts with Nonprofit Organizations

PART 32—CONTRACT FINANCING32.1 Non-Commercial Item Purchase Financing32.2 Commercial Item Purchase Financing32.3 Loan Guarantees for Defense Production32.4 Advance Payments for Non-Commercial Items32.5 Progress Payments Based on Costs32.6 Contract Debts32.7 Contract Funding32.8 Assignment of Claims32.9 Prompt Payment32.10 Performance-Based Payments32.11 Electronic Funds Transfer

PART 33—PROTESTS, DISPUTES, AND APPEALS33.1 Protests33.2 Disputes and Appeals

SUBCHAPTER F—SPECIAL CATEGORIES OF CONTRACTING

PART 34—MAJOR SYSTEM ACQUISITION34.0 General34.1 Testing, Qualification and Use of Industrial Resources Developed Under Title III, Defense Production Act

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PART 35—RESEARCH AND DEVELOPMENT CONTRACTING

PART 36—CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS36.1 General36.2 Special Aspects of Contracting for Construction36.3 Two-Phase Design-Build Selection Procedures36.4 [Reserved]36.5 Contract Clauses36.6 Architect-Engineer Services36.7 Standard and Optional Forms for Contracting for Construction, Architect-Engineer Services, and Dismantling,

Demolition, or Removal of Improvements

PART 37—SERVICE CONTRACTING37.1 Service Contracts—General37.2 Advisory and Assistance Services37.3 Dismantling, Demolition, or Removal of Improvements37.4 Nonpersonal Health Care Services37.5 Management Oversight of Service Contracts37.6 Performance-Based Contracting

PART 38—FEDERAL SUPPLY SCHEDULE CONTRACTING38.1 Federal Supply Schedule Program38.2 Establishing and Administering Federal Supply Schedules

PART 39—ACQUISITION OF INFORMATION TECHNOLOGY39.1 General39.2 Electronic and Information Technology

PART 40—RESERVED

PART 41—ACQUISITION OF UTILITY SERVICES41.1 General41.2 Acquiring Utility Services41.3 Requests for Assistance41.4 Administration41.5 Solicitation Provision and Contract Clauses41.6 Forms41.7 Formats

vii


SUBCHAPTER G—CONTRACT MANAGEMENT

PART 42—CONTRACT ADMINISTRATION AND AUDIT SERVICES42.1 Contract Audit Services42.2 Contract Administration Services42.3 Contract Administration Office Functions42.4 Correspondence and Visits42.5 Postaward Orientation42.6 Corporate Administrative Contracting Officer42.7 Indirect Cost Rates42.8 Disallowance of Costs42.9 Bankruptcy42.10 [Reserved]42.11 Production Surveillance and Reporting42.12 Novation and Change-of-Name Agreements42.13 Suspension of Work, Stop-Work Orders, and Government Delay of Work42.14 Traffic and Transportation Management42.15 Contractor Performance Information42.16 Small Business Contract Administration42.17 Forward Pricing Rate Agreements

PART 43—CONTRACT MODIFICATIONS43.1 General43.2 Change Orders43.3 Forms

PART 44—SUBCONTRACTING POLICIES AND PROCEDURES44.1 General44.2 Consent to Subcontracts44.3 Contractors’ Purchasing Systems Reviews44.4 Subcontracts for Commercial Items and Commercial Components

PART 45—GOVERNMENT PROPERTY45.1 General45.2 Competitive Advantage45.3 Providing Government Property to Contractors45.4 Contractor Use and Rental of Government Property45.5 Management of Government Property in the Possession of Contractors45.6 Reporting, Reutilization, and Disposal

PART 46—QUALITY ASSURANCE46.1 General46.2 Contract Quality Requirements46.3 Contract Clauses46.4 Government Contract Quality Assurance46.5 Acceptance46.6 Material Inspection and Receiving Reports46.7 Warranties46.8 Contractor Liability for Loss of or Damage to Property of the Government

viii


PART 47—TRANSPORTATION47.1 General47.2 Contracts for Transportation or for Transportation-Related Services47.3 Transportation in Supply Contracts47.4 Air Transportation by U.S.-Flag Carriers47.5 Ocean Transportation by U.S.-Flag Vessels

PART 48—VALUE ENGINEERING48.1 Policies and Procedures48.2 Contract Clauses

PART 49—TERMINATION OF CONTRACTS49.1 General Principles49.2 Additional Principles for Fixed-Price Contracts Terminated for Convenience49.3 Additional Principles for Cost-Reimbursement Contracts Terminated for Convenience49.4 Termination for Default49.5 Contract Termination Clauses49.6 Contract Termination Forms and Formats

PART 50—EXTRAORDINARY CONTRACTUAL ACTIONS50.1 General50.2 Delegation of and Limitations on Exercise of Authority50.3 Contract Adjustments50.4 Residual Powers

PART 51—USE OF GOVERNMENT SOURCES BY CONTRACTORS51.1 Contractor Use of Government Supply Sources51.2 Contractor Use of Interagency Fleet Management System (IFMS) Vehicles

SUBCHAPTER H—CLAUSES AND FORMS

PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES52.1 Instructions for Using Provisions and Clauses52.2 Text of Provisions and Clauses52.3 Provision and Clause Matrix

PART 53—FORMS53.1 General53.2 Prescription of Forms53.3 Illustration of Forms

APPENDIX

INDEX

ix


SUBCHAPTER A—GENERAL

Sec.

PART 1—FEDERAL ACQUISITION REGULATIONS SYSTEM

1.000 Scope of part.

Subpart 1.1—Purpose, Authority, Issuance1.101 Purpose.1.102 Statement of guiding principles for the Federal

Acquisition System.1.102-1 Discussion.1.102-2 Performance standards.1.102-3 Acquisition Team.1.102-4 Role of the Acquisition Team.1.103 Authority.1.104 Applicability.1.105 Issuance.1.105-1 Publication and code arrangement.1.105-2 Arrangement of regulations.1.105-3 Copies.1.106 OMB approval under the Paperwork Reduction

Act.1.107 Certifications.1.108 FAR conventions.

Subpart 1.2—Administration1.201 Maintenance of the FAR.1.201-1 The two councils.1.201-2 FAR Secretariat.1.202 Agency compliance with the FAR.

Subpart 1.3—Agency Acquisition Regulations1.301 Policy.1.302 Limitations.1.303 Publication and codification.1.304 Agency control and compliance procedures.

Subpart 1.4—Deviations from the FAR1.400 Scope of subpart.1.401 Definition.1.402 Policy.

1.403 Individual deviations.1.404 Class deviations.1.405 Deviations pertaining to treaties and executive

agreements.

Subpart 1.5—Agency and Public Participation1.501 Solicitation of agency and public views.1.501-1 Definition.1.501-2 Opportunity for public comments.1.501-3 Exceptions.1.502 Unsolicited proposed revisions.1.503 Public meetings.

Subpart 1.6—Career Development, Contracting Authority, and Responsibilities

1.601 General.1.602 Contracting officers.1.602-1 Authority.1.602-2 Responsibilities.1.602-3 Ratification of unauthorized commitments.1.603 Selection, appointment, and termination of

appointment.1.603-1 General.1.603-2 Selection.1.603-3 Appointment.1.603-4 Termination.

Subpart 1.7—Determinations and Findings1.700 Scope of subpart.1.701 Definition.1.702 General.1.703 Class determinations and findings.1.704 Content.1.705 Supersession and modification.1.706 Expiration.1.707 Signatory authority.

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1-2

SUBPART 1.1—PURPOSE, AUTHORITY, ISSUANCE 1.102-2

1.1-1

1.000 Scope of part.This part sets forth basic policies and general information

about the Federal Acquisition Regulations System includingpurpose, authority, applicability, issuance, arrangement, num-bering, dissemination, implementation, supplementation,maintenance, administration, and deviation. Subparts 1.2, 1.3,and 1.4 prescribe administrative procedures for maintainingthe FAR System.

Subpart 1.1—Purpose, Authority, Issuance

1.101 Purpose.The Federal Acquisition Regulations System is established

for the codification and publication of uniform policies andprocedures for acquisition by all executive agencies. The Fed-eral Acquisition Regulations System consists of the FederalAcquisition Regulation (FAR), which is the primary docu-ment, and agency acquisition regulations that implement orsupplement the FAR. The FAR System does not include inter-nal agency guidance of the type described in 1.301(a)(2).

1.102 Statement of guiding principles for the Federal Acquisition System.(a) The vision for the Federal Acquisition System is to

deliver on a timely basis the best value product or service tothe customer, while maintaining the public’s trust and fulfill-ing public policy objectives. Participants in the acquisitionprocess should work together as a team and should be empow-ered to make decisions within their area of responsibility.

(b) The Federal Acquisition System will—(1) Satisfy the customer in terms of cost, quality, and

timeliness of the delivered product or service by, forexample—

(i) Maximizing the use of commercial products andservices;

(ii) Using contractors who have a track record of suc-cessful past performance or who demonstrate a current supe-rior ability to perform; and

(iii) Promoting competition;(2) Minimize administrative operating costs;(3) Conduct business with integrity, fairness, and

openness; and(4) Fulfill public policy objectives.

(c) The Acquisition Team consists of all participants inGovernment acquisition including not only representatives ofthe technical, supply, and procurement communities but alsothe customers they serve, and the contractors who provide theproducts and services.

(d) The role of each member of the Acquisition Team is toexercise personal initiative and sound business judgment inproviding the best value product or service to meet the cus-tomer’s needs. In exercising initiative, Government membersof the Acquisition Team may assume if a specific strategy,

practice, policy or procedure is in the best interests of the Gov-ernment and is not addressed in the FAR, nor prohibited bylaw (statute or case law), Executive order or other regulation,that the strategy, practice, policy or procedure is a permissibleexercise of authority.

1.102-1 Discussion.(a) Introduction. The statement of Guiding Principles for

the Federal Acquisition System (System) represents a concisestatement designed to be user-friendly for all participants inGovernment acquisition. The following discussion of theprinciples is provided in order to illuminate the meaning of theterms and phrases used. The framework for the Systemincludes the Guiding Principles for the System and the sup-porting policies and procedures in the FAR.

(b) Vision. All participants in the System are responsiblefor making acquisition decisions that deliver the best valueproduct or service to the customer. Best value must be viewedfrom a broad perspective and is achieved by balancing themany competing interests in the System. The result is a systemwhich works better and costs less.

1.102-2 Performance standards.(a) Satisfy the customer in terms of cost, quality, and time-

liness of the delivered product or service. (1) The principalcustomers for the product or service provided by the Systemare the users and line managers, acting on behalf of the Amer-ican taxpayer.

(2) The System must be responsive and adaptive to cus-tomer needs, concerns, and feedback. Implementation ofacquisition policies and procedures, as well as considerationof timeliness, quality, and cost throughout the process, musttake into account the perspective of the user of the product orservice.

(3) When selecting contractors to provide products orperform services, the Government will use contractors whohave a track record of successful past performance or whodemonstrate a current superior ability to perform.

(4) The Government must not hesitate to communicatewith the commercial sector as early as possible in the acqui-sition cycle to help the Government determine the capabilitiesavailable in the commercial marketplace. The Governmentwill maximize its use of commercial products and services inmeeting Government requirements.

(5) It is the policy of the System to promote competitionin the acquisition process.

(6) The System must perform in a timely, high quality,and cost-effective manner.

(7) All members of the Team are required to employplanning as an integral part of the overall process of acquiringproducts or services. Although advance planning is required,each member of the Team must be flexible in order to accom-modate changing or unforeseen mission needs. Planning is a

1.102-3 FEDERAL ACQUISITION REGULATION

1.1-2

tool for the accomplishment of tasks, and application of itsdiscipline should be commensurate with the size and nature ofa given task.

(b) Minimize administrative operating costs. (1) In orderto ensure that maximum efficiency is obtained, rules, regula-tions, and policies should be promulgated only when theirbenefits clearly exceed the costs of their development, imple-mentation, administration, and enforcement. This applies tointernal administrative processes, including reviews, and torules and procedures applied to the contractor community.

(2) The System must provide uniformity where it con-tributes to efficiency or where fairness or predictability isessential. The System should also, however, encourage inno-vation, and local adaptation where uniformity is not essential.

(c) Conduct business with integrity, fairness, and open-ness. (1) An essential consideration in every aspect of theSystem is maintaining the public’s trust. Not only must theSystem have integrity, but the actions of each member of theTeam must reflect integrity, fairness, and openness. The foun-dation of integrity within the System is a competent, experi-enced, and well-trained, professional workforce.Accordingly, each member of the Team is responsible andaccountable for the wise use of public resources as well as act-ing in a manner which maintains the public’s trust. Fairnessand openness require open communication among team mem-bers, internal and external customers, and the public.

(2) To achieve efficient operations, the System mustshift its focus from “risk avoidance” to one of “risk manage-ment.” The cost to the taxpayer of attempting to eliminate allrisk is prohibitive. The Executive Branch will accept andmanage the risk associated with empowering local procure-ment officials to take independent action based on their pro-fessional judgment.

(3) The Government shall exercise discretion, usesound business judgment, and comply with applicable lawsand regulations in dealing with contractors and prospectivecontractors. All contractors and prospective contractors shallbe treated fairly and impartially but need not be treated thesame.

(d) Fulfill public policy objectives. The System must sup-port the attainment of public policy goals adopted by the Con-gress and the President. In attaining these goals, and in itsoverall operations, the process shall ensure the efficient use ofpublic resources.

1.102-3 Acquisition Team.The purpose of defining the Federal Acquisition Team

(Team) in the Guiding Principles is to ensure that participantsin the System are identified beginning with the customer andending with the contractor of the product or service. By iden-tifying the team members in this manner, teamwork, unity ofpurpose, and open communication among the members of the

Team in sharing the vision and achieving the goal of the Sys-tem are encouraged. Individual team members will participatein the acquisition process at the appropriate time.

1.102-4 Role of the Acquisition Team.(a) Government members of the Team must be empowered

to make acquisition decisions within their areas of responsi-bility, including selection, negotiation, and administration ofcontracts consistent with the Guiding Principles. In particular,the contracting officer must have the authority to the maxi-mum extent practicable and consistent with law, to determinethe application of rules, regulations, and policies, on a specificcontract.

(b) The authority to make decisions and the accountabilityfor the decisions made will be delegated to the lowest levelwithin the System, consistent with law.

(c) The Team must be prepared to perform the functionsand duties assigned. The Government is committed to providetraining, professional development, and other resources nec-essary for maintaining and improving the knowledge, skills,and abilities for all Government participants on the Team,both with regard to their particular area of responsibilitywithin the System, and their respective role as a team member.The contractor community is encouraged to do likewise.

(d) The System will foster cooperative relationshipsbetween the Government and its contractors consistent withits overriding responsibility to the taxpayers.

(e) The FAR outlines procurement policies and proceduresthat are used by members of the Acquisition Team. If a policyor procedure, or a particular strategy or practice, is in the bestinterest of the Government and is not specifically addressedin the FAR, nor prohibited by law (statute or case law), Exec-utive order or other regulation, Government members of theTeam should not assume it is prohibited. Rather, absence ofdirection should be interpreted as permitting the Team to inno-vate and use sound business judgment that is otherwise con-sistent with law and within the limits of their authority.Contracting officers should take the lead in encouraging busi-ness process innovations and ensuring that business decisionsare sound.

1.103 Authority.(a) The development of the FAR System is in accordance

with the requirements of the Office of Federal ProcurementPolicy Act of 1974 (Pub. L. 93-400), as amended byPub. L. 96-83.

(b) The FAR is prepared, issued, and maintained, and theFAR System is prescribed jointly by the Secretary of Defense,the Administrator of General Services, and the Administrator,National Aeronautics and Space Administration, under theirseveral statutory authorities.

SUBPART 1.1—PURPOSE, AUTHORITY, ISSUANCE 1.106

1.1-3

1.104 Applicability.The FAR applies to all acquisitions as defined in Part 2 of

the FAR, except where expressly excluded.

1.105 Issuance.

1.105-1 Publication and code arrangement.(a) The FAR is published in—

(1) The daily issue of the Federal Register;(2) Cumulated form in the Code of Federal Regulations

(CFR); and(3) A separate loose-leaf edition.

(b) The FAR is issued as Chapter 1 of Title 48, CFR. Sub-sequent chapters are reserved for agency acquisition regula-tions that implement or supplement the FAR (seeSubpart 1.3). The CFR Staff will assign chapter numbers torequesting agencies.

(c) Each numbered unit or segment (e.g., part, subpart, sec-tion, etc.) of an agency acquisition regulation that is codifiedin the CFR shall begin with the chapter number. However, thechapter number assigned to the FAR will not be included inthe numbered units or segments of the FAR.

1.105-2 Arrangement of regulations.(a) General. The FAR is divided into subchapters, parts

(each of which covers a separate aspect of acquisition), sub-parts, sections, and subsections.

(b) Numbering. (1) The numbering system permits the dis-crete identification of every FAR paragraph. The digits to theleft of the decimal point represent the part number. The num-bers to the right of the decimal point and to the left of the dashrepresent, in order, the subpart (one or two digits), and the sec-tion (two digits). The number to the right of the dash repre-sents the subsection. Subdivisions may be used at the sectionand subsection level to identify individual paragraphs. Thefollowing example illustrates the make-up of a FAR numbercitation (note that subchapters are not used with citations):

(2) Subdivisions below the section or subsection levelconsist of parenthetical alpha numerics using the followingsequence:

(a)(1)(i)(A)(1)(i)

(c) References and citations. (1) Unless otherwise stated,cross-references indicate parts, subparts, sections, subsec-tions, paragraphs, subparagraphs, or subdivisions of thisregulation.

(2) This regulation may be referred to as the FederalAcquisition Regulation or the FAR.

(3) Using the FAR coverage at 9.106-4(d) as a typicalillustration, reference to the—

(i) Part would be “FAR Part 9” outside the FAR and“Part 9” within the FAR.

(ii) Subpart would be “FAR Subpart 9.1” outside theFAR and “Subpart 9.1’’ within the FAR.

(iii) Section would be “FAR 9.106” outside the FARand “9.106” within the FAR.

(iv) Subsection would be “FAR 9.106-4” outside theFAR and “9.106-4” within the FAR.

(v) Paragraph would be “FAR 9.106-4(d)” outsidethe FAR and “9.106-4(d)” within the FAR.

(4) Citations of authority (e.g., statutes or Executiveorders) in the FAR shall follow the Federal Register formguides.

1.105-3 Copies.Copies of the FAR in Federal Register, loose-leaf,

CD-ROM, and CFR form may be purchased from the—

Superintendent of DocumentsGovernment Printing Office (GPO)Washington, DC 20402.

1.106 OMB approval under the Paperwork Reduction Act.The Paperwork Reduction Act of 1980 (Pub. L. 96-511)

imposes a requirement on Federal agencies to obtain approvalfrom the Office of Management and Budget (OMB) beforecollecting information from 10 or more members of the pub-lic. The information collection and recordkeeping require-ments contained in this regulation have been approved by theOMB. The following OMB control numbers apply:

PartSubpartSectionSubsection

25.108-2

FAR segment OMB Control Number3.103 9000-00183.4 9000-00034.102 9000-00334.5 9000-01374.602 9000-01454.603 9000-01454.7 9000-00344.9 9000-00975.405 9000-00367.2 9000-00828.5 9000-01139.1 9000-00119.2 9000-002014.201 9000-003414.202-4 9000-004014.202-5 9000-003914.205 9000-0037

1.106 FEDERAL ACQUISITION REGULATION

1.1-4

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1.1-5

52.216-17 9000-006752.219-9 9000-000652.219-10 9000-000652.219-19 9000-010052.219-20 9000-010052.219-21 9000-010052.219-22 9000-015052.219-23 9000-015052.219-25 9000-015052.222-2 9000-006552.222-4 1215-011952.222-6 1215-014052.222-8 1215-0149 and

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9000-006052.236-15 9000-005852.236-19 9000-006452.241-1 9000-012652.241-3 9000-012252.241-7 9000-012352.241-13 9000-012452.242-12 9000-005652.243-1 9000-002652.243-2 9000-002652.243-3 9000-002652.243-4 9000-002652.243-6 9000-002652.243-7 9000-0026



1.1-6

1.107 Certifications.In accordance with Section 29 of the Office of Federal Pro-

curement Policy Act (41 U.S.C. 425), as amended bySection 4301 of the Clinger-Cohen Act of 1996 (PublicLaw 104-106), a new requirement for a certification by a con-tractor or offeror may not be included in this chapter unless—

(a) The certification requirement is specifically imposedby statute; or

(b) Written justification for such certification is providedto the Administrator for Federal Procurement Policy by theFederal Acquisition Regulatory Council, and the Administra-tor approves in writing the inclusion of such certificationrequirement.

52.245-2 9000-007552.245-3 9000-007552.245-5 9000-007552.245-7 9000-007552.245-8 9000-007552.245-9 9000-007552.245-10 9000-007552.245-11 9000-007552.245-16 9000-007552.245-17 9000-007552.245-18 9000-007552.246-2 9000-007752.246-3 9000-007752.246-4 9000-007752.246-5 9000-007752.246-6 9000-007752.246-7 9000-007752.246-8 9000-007752.246-10 9000-007752.246-12 9000-007752.246-15 9000-007752.247-2 9000-005352.247-29 9000-006152.247-30 9000-006152.247-31 9000-006152.247-32 9000-006152.247-33 9000-006152.247-34 9000-006152.247-35 9000-006152.247-36 9000-006152.247-37 9000-006152.247-38 9000-006152.247-39 9000-006152.247-40 9000-006152.247-41 9000-006152.247-42 9000-006152.247-43 9000-006152.247-44 9000-006152.247-48 9000-006152.247-51 9000-005752.247-53 9000-005552.247-57 9000-006152.247-63 9000-005452.247-64 9000-006152.248-1 9000-002752.248-2 9000-002752.248-3 9000-002752.249-2 9000-002852.249-3 9000-002852.249-5 9000-002852.249-6 9000-0028

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1.1-7

1.108 FAR conventions.The following conventions provide guidance for interpret-

ing the FAR:(a) Words and terms. Definitions in Part 2 apply to the

entire regulation unless specifically defined in another part,subpart, section, provision, or clause. Words or terms definedin a specific part, subpart, section, provision, or clause havethat meaning when used in that part, subpart, section, provi-sion, or clause. Undefined words retain their common dictio-nary meaning.

(b) Delegation of authority. Each authority is delegableunless specifically stated otherwise (see 1.102-4(b)).

(c) Dollar thresholds. Unless otherwise specified, a spe-cific dollar threshold for the purpose of applicability is thefinal anticipated dollar value of the action, including the dollarvalue of all options. If the action establishes a maximum quan-tity of supplies or services to be acquired or establishes a ceil-ing price or establishes the final price to be based on futureevents, the final anticipated dollar value must be the highestfinal priced alternative to the Government, including the dol-lar value of all options.

(d) Application of FAR changes to solicitations and con-tracts. Unless otherwise specified—

(1) FAR changes apply to solicitations issued on or afterthe effective date of the change;

(2) Contracting officers may, at their discretion, includethe FAR changes in solicitations issued before the effectivedate, provided award of the resulting contract(s) occurs on orafter the effective date; and

(3) Contracting officers may, at their discretion, includethe changes in any existing contract with appropriateconsideration.

(e) Citations. When the FAR cites a statute, Executiveorder, Office of Management and Budget circular, Office ofFederal Procurement Policy policy letter, or relevant portionof the Code of Federal Regulations, the citation includes allapplicable amendments, unless otherwise stated.

(f) Imperative sentences. When an imperative sentencedirects action, the contracting officer is responsible for theaction, unless another party is expressly cited.

1.1-8


SUBPART 1.2—ADMINISTRATION 1.202

1.2-1

Subpart 1.2—Administration

1.201 Maintenance of the FAR.

1.201-1 The two councils.(a) Subject to the authorities discussed in 1.103, revisions

to the FAR will be prepared and issued through the coordi-nated action of two councils, the Defense Acquisition Regu-lations Council (DAR Council) and the Civilian AgencyAcquisition Council (CAA Council). Members of thesecouncils shall—

(1) Represent their agencies on a full-time basis;(2) Be selected for their superior qualifications in terms

of acquisition experience and demonstrated professionalexpertise; and

(3) Be funded by their respective agencies.(b) The chairperson of the CAA Council shall be the rep-

resentative of the Administrator of General Services. Theother members of this council shall be one each representativefrom the—

(1) Departments of Agriculture, Commerce, Energy,Health and Human Services, Homeland Security, Interior,Labor, State, Transportation, and Treasury; and

(2) Environmental Protection Agency, Social SecurityAdministration, Small Business Administration, and Depart-ment of Veterans Affairs.

(c) The Director of the DAR Council shall be the represen-tative of the Secretary of Defense. The operation of the DARCouncil will be as prescribed by the Secretary of Defense.Membership shall include representatives of the militaryDepartments, the Defense Logistics Agency, and the NationalAeronautics and Space Administration.

(d) Responsibility for processing revisions to the FAR isapportioned by the two councils so that each council has cog-nizance over specified parts or subparts.

(e) Each council shall be responsible for—

(1) Agreeing on all revisions with the other council;(2) Submitting to the FAR Secretariat (see 1.201-2) the

information required under paragraphs 1.501-2(b) and (e) forpublication in the Federal Register of a notice soliciting com-ments on a proposed revision to the FAR;

(3) Considering all comments received in response tonotice of proposed revisions;

(4) Arranging for public meetings;(5) Preparing any final revision in the appropriate FAR

format and language; and(6) Submitting any final revision to the FAR Secretariat

for publication in the Federal Register and printing fordistribution.

1.201-2 FAR Secretariat.(a) The General Services Administration is responsible for

establishing and operating the FAR Secretariat to print, pub-lish, and distribute the FAR through the Code of Federal Reg-ulations system (including a loose-leaf edition with periodicupdates).

(b) Additionally, the FAR Secretariat shall provide the twocouncils with centralized services for—

(1) Keeping a synopsis of current FAR cases and theirstatus;

(2) Maintaining official files;(3) Assisting parties interested in reviewing the files on

completed cases; and(4) Performing miscellaneous administrative tasks per-

taining to the maintenance of the FAR.

1.202 Agency compliance with the FAR.Agency compliance with the FAR (see 1.304) is the

responsibility of the Secretary of Defense (for the militarydepartments and defense agencies), the Administrator of Gen-eral Services (for civilian agencies other than NASA), and theAdministrator of NASA (for NASA activities).

1.2-2


SUBPART 1.3—AGENCY ACQUISITION REGULATIONS 1.304

1.3-1

Subpart 1.3—Agency Acquisition Regulations

1.301 Policy.(a)(1) Subject to the authorities in paragraph (c) of this sec-

tion and other statutory authority, an agency head may issueor authorize the issuance of agency acquisition regulationsthat implement or supplement the FAR and incorporate,together with the FAR, agency policies, procedures, contractclauses, solicitation provisions, and forms that govern thecontracting process or otherwise control the relationshipbetween the agency, including any of its suborganizations,and contractors or prospective contractors.

(2) Subject to the authorities in paragraph (c) of this sec-tion and other statutory authority, an agency head may issueor authorize the issuance of internal agency guidance at anyorganizational level (e.g., designations and delegations ofauthority, assignments of responsibilities, work-flow proce-dures, and internal reporting requirements).

(b) Agency heads shall establish procedures to ensure thatagency acquisition regulations are published for comment inthe Federal Register in conformance with the procedures inSubpart 1.5 and as required by section 22 of the Office of Fed-eral Procurement Policy Act, as amended (41 U.S.C. 418b),and other applicable statutes, when they have a significanteffect beyond the internal operating procedures of the agencyor have a significant cost or administrative impact on contrac-tors or offerors. However, publication is not required for issu-ances that merely implement or supplement higher levelissuances that have previously undergone the public commentprocess, unless such implementation or supplementationresults in an additional significant cost or administrativeimpact on contractors or offerors or effect beyond the internaloperating procedures of the issuing organization. Issuancesunder 1.301(a)(2) need not be publicized for public comment.

(c) When adopting acquisition regulations, agencies shallensure that they comply with the Paperwork Reduction Act(44 U.S.C. 3501, et seq.) as implemented in 5 CFR 1320 (see1.106) and the Regulatory Flexibility Act (5 U.S.C. 601,et seq.). Normally, when a law requires publication of a pro-posed regulation, the Regulatory Flexibility Act applies andagencies must prepare written analyses, or certifications asprovided in the law.

(d) Agency acquisition regulations implementing or sup-plementing the FAR are, for—

(1) The military departments and defense agencies,issued subject to the authority of the Secretary of Defense;

(2) NASA activities, issued subject to the authorities ofthe Administrator of NASA; and

(3) The civilian agencies other than NASA, issued bythe heads of those agencies subject to the overall authority ofthe Administrator of General Services or independent author-ity the agency may have.

1.302 Limitations.Agency acquisition regulations shall be limited to—(a) Those necessary to implement FAR policies and proce-

dures within the agency; and(b) Additional policies, procedures, solicitation provi-

sions, or contract clauses that supplement the FAR to satisfythe specific needs of the agency.

1.303 Publication and codification.(a) Agency-wide acquisition regulations shall be published

in the Federal Register as required by law, shall be codifiedunder an assigned chapter in Title 48, Code of Federal Regu-lations, and shall parallel the FAR in format, arrangement, andnumbering system (but see 1.105-1(c)). Coverage in anagency acquisition regulation that implements a specific part,subpart, section, or subsection of the FAR shall be numberedand titled to correspond to the appropriate FAR number andtitle. Supplementary material for which there is no counterpartin the FAR shall be codified using chapter, part, subpart, sec-tion, or subsection numbers of 70 and up (e.g., for the Depart-ment of Interior, whose assigned chapter number in Title 48is 14, Part 1470, Subpart 1401.70, section 1401.370, orsubsection 1401.301-70).

(b) Issuances under 1.301(a)(2) need not be published inthe Federal Register.

1.304 Agency control and compliance procedures.(a) Under the authorities of 1.301(d), agencies shall control

and limit issuance of agency acquisition regulations and, inparticular, local agency directives that restrain the flexibilitiesfound in the FAR, and shall establish formal procedures forthe review of these documents to assure compliance with thisPart 1.

(b) Agency acquisition regulations shall not—(1) Unnecessarily repeat, paraphrase, or otherwise

restate material contained in the FAR or higher-level agencyacquisition regulations; or

(2) Except as required by law or as provided inSubpart 1.4, conflict or be inconsistent with FAR content.

(c) Agencies shall evaluate all regulatory coverage inagency acquisition regulations to determine if it could applyto other agencies. Coverage that is not peculiar to one agencyshall be recommended for inclusion in the FAR.

1.3-2


SUBPART 1.4—DEVIATIONS FROM THE FAR 1.405

1.4-1

Subpart 1.4—Deviations from the FAR

1.400 Scope of subpart.This subpart prescribes the policies and procedures for

authorizing deviations from the FAR. Exceptions pertainingto the use of forms prescribed by the FAR are covered inPart 53 rather than in this subpart.

1.401 Definition.“Deviation” means any one or combination of the

following:(a) The issuance or use of a policy, procedure, solicitation

provision (see definition in 2.101), contract clause (see defi-nition in 2.101), method, or practice of conducting acquisitionactions of any kind at any stage of the acquisition process thatis inconsistent with the FAR.

(b) The omission of any solicitation provision or contractclause when its prescription requires its use.

(c) The use of any solicitation provision or contract clausewith modified or alternate language that is not authorized bythe FAR (see definition of “modification” in 52.101(a) anddefinition of “alternate” in 2.101(a)).

(d) The use of a solicitation provision or contract clauseprescribed by the FAR on a “substantially as follows” or “sub-stantially the same as” basis (see definitions in 2.101 and52.101(a)), if such use is inconsistent with the intent, princi-ple, or substance of the prescription or related coverage on thesubject matter in the FAR.

(e) The authorization of lesser or greater limitations on theuse of any solicitation provision, contract clause, policy, orprocedure prescribed by the FAR.

(f) The issuance of policies or procedures that govern thecontracting process or otherwise control contracting relation-ships that are not incorporated into agency acquisition regu-lations in accordance with 1.301(a).

1.402 Policy.Unless precluded by law, executive order, or regulation,

deviations from the FAR may be granted as specified in thissubpart when necessary to meet the specific needs andrequirements of each agency. The development and testing ofnew techniques and methods of acquisition should not be sti-fled simply because such action would require a FAR devia-tion. The fact that deviation authority is required should not,of itself, deter agencies in their development and testing ofnew techniques and acquisition methods. Refer to 31.101 forinstructions concerning deviations pertaining to the subjectmatter of Part 31, Contract Cost Principles and Procedures.Deviations are not authorized with respect to 30.201-3 and30.201-4, or the requirements of the Cost Accounting Stan-dards Board (CASB) rules and regulations (48 CFRChapter 99 (FAR Appendix)). Refer to 30.201-5 for instruc-

tions concerning waivers pertaining to Cost AccountingStandards.

1.403 Individual deviations.Individual deviations affect only one contract action, and,

unless 1.405(e) is applicable, may be authorized by the agencyhead. The contracting officer must document the justificationand agency approval in the contract file.

1.404 Class deviations.Class deviations affect more than one contract action.

When an agency knows that it will require a class deviationon a permanent basis, it should propose a FAR revision, ifappropriate. Civilian agencies, other than NASA, must fur-nish a copy of each approved class deviation to the FARSecretariat.

(a) For civilian agencies except NASA, class deviationsmay be authorized by agency heads or their designees, unless1.405(e) is applicable. Delegation of this authority shall not bemade below the head of a contracting activity. Authorizationof class deviations by agency officials is subject to the follow-ing limitations:

(1) An agency official who may authorize a class devi-ation, before doing so, shall consult with the chairperson ofthe Civilian Agency Acquisition Council (CAA Council),unless that agency official determines that urgency precludessuch consultation.

(2) Recommended revisions to the FAR shall be trans-mitted to the FAR Secretariat by agency heads or their desig-nees for authorizing class deviations.

(b) For DoD, class deviations shall be controlled, pro-cessed, and approved in accordance with the Defense FARSupplement.

(c) For NASA, class deviations shall be controlled andapproved by the Assistant Administrator for Procurement.Deviations shall be processed in accordance with agencyregulations.

1.405 Deviations pertaining to treaties and executive agreements.(a) “Executive agreements,” as used in this section, means

Government-to-Government agreements, including agree-ments with international organizations, to which the UnitedStates is a party.

(b) Any deviation from the FAR required to comply witha treaty to which the United States is a party is authorized,unless the deviation would be inconsistent with FAR coveragebased on a law enacted after the execution of the treaty.

(c) Any deviation from the FAR required to comply withan executive agreement is authorized unless the deviationwould be inconsistent with FAR coverage based on law.

(d) For civilian agencies other than NASA, a copy of thetext deviation authorized under paragraph (b) or (c) of this


1.4-2

section shall be transmitted to the FAR Secretariat through acentral agency control point.

(e) For civilian agencies other than NASA, if a deviationrequired to comply with a treaty or an executive agreement is

not authorized by paragraph (b) or (c) of this section, then therequest for deviation shall be processed through the FAR Sec-retariat to the Civilian Agency Acquisition Council.

SUBPART 1.5—AGENCY AND PUBLIC PARTICIPATION 1.503

1.5-1

Subpart 1.5—Agency and Public Participation

1.501 Solicitation of agency and public views.

1.501-1 Definition.“Significant revisions,” as used in this subpart, means revi-

sions that alter the substantive meaning of any coverage in theFAR System having a significant cost or administrativeimpact on contractors or offerors, or significant effect beyondthe internal operating procedures of the issuing agency. Thisexpression, for example, does not include editorial, stylistic,or other revisions that have no impact on the basic meaningof the coverage being revised.

1.501-2 Opportunity for public comments.(a) Views of agencies and nongovernmental parties or

organizations will be considered in formulating acquisitionpolicies and procedures.

(b) The opportunity to submit written comments on pro-posed significant revisions shall be provided by placing anotice in the Federal Register. Each of these notices shallinclude—

(1) The text of the revision or, if it is impracticable topublish the full text, a summary of the proposal;

(2) The address and telephone number of the individualfrom whom copies of the revision, in full text, can be

requested and to whom comments thereon should beaddressed; and

(3) When 1.501-3(b) is applicable, a statement that therevision is effective on a temporary basis pending completionof the public comment period.

(c) A minimum of 30 days and, normally, at least 60 dayswill be given for the receipt of comments.

1.501-3 Exceptions.(a) Comments need not be solicited when the proposed

coverage does not constitute a significant revision.(b) Advance comments need not be solicited when urgent

and compelling circumstances make solicitation of commentsimpracticable prior to the effective date of the coverage, suchas when a new statute must be implemented in a relativelyshort period of time. In such case, the coverage shall be issuedon a temporary basis and shall provide for at least a 30 daypublic comment period.

1.502 Unsolicited proposed revisions.Consideration shall also be given to unsolicited recom-

mendations for revisions that have been submitted in writingwith sufficient data and rationale to permit their evaluation.

1.503 Public meetings.Public meetings may be appropriate when a decision to

adopt, amend, or delete FAR coverage is likely to benefit fromsignificant additional views and discussion.

1.5-2


SUBPART 1.6—CAREER DEVELOPMENT, CONTRACTING AUTHORITY, AND RESPONSIBILITIES 1.602-3

FAC 2005–06 SEPTEMBER 30, 2005

1.6-1

Subpart 1.6—Career Development, Contracting Authority, and Responsibilities

1.601 General.(a) Unless specifically prohibited by another provision of

law, authority and responsibility to contract for authorizedsupplies and services are vested in the agency head. Theagency head may establish contracting activities and delegatebroad authority to manage the agency’s contracting functionsto heads of such contracting activities. Contracts may beentered into and signed on behalf of the Government only bycontracting officers. In some agencies, a relatively small num-ber of high level officials are designated contracting officerssolely by virtue of their positions. Contracting officers belowthe level of a head of a contracting activity shall be selectedand appointed under 1.603.

(b) Agency heads may mutually agree to—(1) Assign contracting functions and responsibilities

from one agency to another; and(2) Create joint or combined offices to exercise acqui-

sition functions and responsibilities.

1.602 Contracting officers.

1.602-1 Authority.(a) Contracting officers have authority to enter into, admin-

ister, or terminate contracts and make related determinationsand findings. Contracting officers may bind the Governmentonly to the extent of the authority delegated to them. Contract-ing officers shall receive from the appointing authority (see1.603-1) clear instructions in writing regarding the limits oftheir authority. Information on the limits of the contractingofficers’ authority shall be readily available to the public andagency personnel.

(b) No contract shall be entered into unless the contractingofficer ensures that all requirements of law, executive orders,regulations, and all other applicable procedures, includingclearances and approvals, have been met.

1.602-2 Responsibilities.Contracting officers are responsible for ensuring perfor-

mance of all necessary actions for effective contracting,ensuring compliance with the terms of the contract, and safe-guarding the interests of the United States in its contractualrelationships. In order to perform these responsibilities, con-tracting officers should be allowed wide latitude to exercisebusiness judgment. Contracting officers shall—

(a) Ensure that the requirements of 1.602-1(b) have beenmet, and that sufficient funds are available for obligation;

(b) Ensure that contractors receive impartial, fair, and equi-table treatment; and

(c) Request and consider the advice of specialists in audit,law, engineering, information security, transportation, andother fields, as appropriate.

1.602-3 Ratification of unauthorized commitments.(a) Definitions.“Ratification,” as used in this subsection, means the act of

approving an unauthorized commitment by an official whohas the authority to do so.

“Unauthorized commitment,” as used in this subsection,means an agreement that is not binding solely because theGovernment representative who made it lacked the authorityto enter into that agreement on behalf of the Government.

(b) Policy. (1) Agencies should take positive action to pre-clude, to the maximum extent possible, the need for ratifica-tion actions. Although procedures are provided in this sectionfor use in those cases where the ratification of an unauthorizedcommitment is necessary, these procedures may not be usedin a manner that encourages such commitments being madeby Government personnel.

(2) Subject to the limitations in paragraph (c) of thissubsection, the head of the contracting activity, unless a higherlevel official is designated by the agency, may ratify an unau-thorized commitment.

(3) The ratification authority in paragraph (b)(2) of thissubsection may be delegated in accordance with agency pro-cedures, but in no case shall the authority be delegated belowthe level of chief of the contracting office.

(4) Agencies should process unauthorized commit-ments using the ratification authority of this subsectioninstead of referring such actions to the General AccountingOffice for resolution. (See 1.602-3(d).)

(5) Unauthorized commitments that would involveclaims subject to resolution under the Contract Disputes Actof 1978 should be processed in accordance with Subpart 33.2,Disputes and Appeals.

(c) Limitations. The authority in paragraph (b)(2) of thissubsection may be exercised only when—

(1) Supplies or services have been provided to andaccepted by the Government, or the Government otherwisehas obtained or will obtain a benefit resulting from perfor-mance of the unauthorized commitment;

(2) The ratifying official has the authority to enter intoa contractual commitment;

(3) The resulting contract would otherwise have beenproper if made by an appropriate contracting officer;

(4) The contracting officer reviewing the unauthorizedcommitment determines the price to be fair and reasonable;

(5) The contracting officer recommends payment andlegal counsel concurs in the recommendation, unless agencyprocedures expressly do not require such concurrence;

(6) Funds are available and were available at the timethe unauthorized commitment was made; and


FAC 2005–06)
1.6-2 (
(7) The ratification is in accordance with any other lim-itations prescribed under agency procedures.

(d) Nonratifiable commitments. Cases that are not ratifi-able under this subsection may be subject to resolution as rec-ommended by the General Accounting Office under its claimprocedure (GAO Policy and Procedures Manual for Guidanceof Federal Agencies, Title 4, Chapter 2), or as authorized byFAR Part 50. Legal advice should be obtained in these cases.

1.603 Selection, appointment, and termination of appointment.

1.603-1 General.Subsection 414(4) of Title 41, United States Code,

requires agency heads to establish and maintain a procure-ment career management program and a system for the selec-tion, appointment, and termination of appointment ofcontracting officers. Agency heads or their designees mayselect and appoint contracting officers and terminate theirappointments. These selections and appointments shall beconsistent with Office of Federal Procurement Policy’s(OFPP) standards for skill-based training in performing con-tracting and purchasing duties as published in OFPP PolicyLetter No. 92-3, Procurement Professionalism Program Pol-icy—Training for Contracting Personnel, June 24, 1992.

1.603-2 Selection.In selecting contracting officers, the appointing official

shall consider the complexity and dollar value of the acquisi-tions to be assigned and the candidate’s experience, training,education, business acumen, judgment, character, and reputa-tion. Examples of selection criteria include—

(a) Experience in Government contracting and administra-tion, commercial purchasing, or related fields;

(b) Education or special training in business administra-tion, law, accounting, engineering, or related fields;

(c) Knowledge of acquisition policies and procedures,including this and other applicable regulations;

(d) Specialized knowledge in the particular assigned fieldof contracting; and

(e) Satisfactory completion of acquisition training courses.

1.603-3 Appointment.(a) Contracting officers shall be appointed in writing on an

SF 1402, Certificate of Appointment, which shall state anylimitations on the scope of authority to be exercised, otherthan limitations contained in applicable law or regulation.Appointing officials shall maintain files containing copies ofall appointments that have not been terminated.

(b) Agency heads are encouraged to delegate micro-pur-chase authority to individuals who are employees of an exec-utive agency or members of the Armed Forces of the UnitedStates who will be using the supplies or services being pur-chased. Individuals delegated this authority are not required tobe appointed on an SF 1402, but shall be appointed in writingin accordance with agency procedures.

1.603-4 Termination.Termination of a contracting officer appointment will be by

letter, unless the Certificate of Appointment contains otherprovisions for automatic termination. Terminations may befor reasons such as reassignment, termination of employment,or unsatisfactory performance. No termination shall operateretroactively.

SUBPART 1.7—DETERMINATIONS AND FINDINGS 1.707

1.7-1

Subpart 1.7—Determinations and Findings

1.700 Scope of subpart.This subpart prescribes general policies and procedures for

the use of determinations and findings (D&F’s). Require-ments for specific types of D&F’s can be found with theappropriate subject matter.

1.701 Definition.“Determination and Findings” means a special form of

written approval by an authorized official that is required bystatute or regulation as a prerequisite to taking certain contractactions. The “determination” is a conclusion or decision sup-ported by the “findings.’’ The findings are statements of factor rationale essential to support the determination and mustcover each requirement of the statute or regulation.

1.702 General.(a) A D&F shall ordinarily be for an individual contract

action. Unless otherwise prohibited, class D&F’s may be exe-cuted for classes of contract actions (see 1.703). The approvalgranted by a D&F is restricted to the proposed contractaction(s) reasonably described in that D&F. D&F’s may pro-vide for a reasonable degree of flexibility. Furthermore, intheir application, reasonable variations in estimated quantitiesor prices are permitted, unless the D&F specifies otherwise.

(b) When an option is anticipated, the D&F shall state theapproximate quantity to be awarded initially and the extent ofthe increase to be permitted by the option.

1.703 Class determinations and findings.(a) A class D&F provides authority for a class of contract

actions. A class may consist of contract actions for the sameor related supplies or services or other contract actions thatrequire essentially identical justification.

(b) The findings in a class D&F shall fully support the pro-posed action either for the class as a whole or for each action.A class D&F shall be for a specified period, with the expira-tion date stated in the document.

(c) The contracting officer shall ensure that individualactions taken pursuant to the authority of a class D&F arewithin the scope of the D&F.

1.704 Content.Each D&F shall set forth enough facts and circumstances

to clearly and convincingly justify the specific determinationmade. As a minimum, each D&F shall include, in the pre-scribed agency format, the following information:

(a) Identification of the agency and of the contractingactivity and specific identification of the document as a“Determination and Findings.”

(b) Nature and/or description of the action being approved.(c) Citation of the appropriate statute and/or regulation

upon which the D&F is based.(d) Findings that detail the particular circumstances, facts,

or reasoning essential to support the determination. Necessarysupporting documentation shall be obtained from appropriaterequirements and technical personnel.

(e) A determination, based on the findings, that the pro-posed action is justified under the applicable statute orregulation.

(f) Expiration date of the D&F, if required (see 1.706).(g) The signature of the official authorized to sign the D&F

(see 1.707) and the date signed.

1.705 Supersession and modification.(a) If a D&F is superseded by another D&F, that action

shall not render invalid any action taken under the originalD&F prior to the date of its supersession.

(b) The contracting officer need not cancel the solicitationif the D&F, as modified, supports the contract action.

1.706 Expiration.Expiration dates are required for class D&F’s and are

optional for individual D&F’s. Authority to act under an indi-vidual D&F expires when it is exercised or on an expirationdate specified in the document, whichever occurs first.Authority to act under a class D&F expires on the expirationdate specified in the document. When a solicitation has beenfurnished to prospective offerors before the expiration date,the authority under the D&F will continue until award of thecontract(s) resulting from the solicitation.

1.707 Signatory authority.When a D&F is required, it shall be signed by the appro-

priate official in accordance with agency regulations. Author-ity to sign or delegate signature authority for the variousD&F’s is as shown in the applicable FAR part.

* * * * * *

1.7-2


Sec.

PART 2—DEFINITIONS OF WORDS AND TERMS

2.000 Scope of part.

Subpart 2.1—Definitions2.101 Definitions.

Subpart 2.2—Definitions Clause2.201 Contract clause.

2-1


2-2

SUBPART 2.1—DEFINITIONS 2.101

(FAC 2005–01)
2.1-1
2.000 Scope of part.(a) This part—

(1) Defines words and terms that are frequently used inthe FAR;

(2) Provides cross-references to other definitions in theFAR of the same word or term; and

(3) Provides for the incorporation of these definitions insolicitations and contracts by reference.

(b) Other parts, subparts, and sections of this regulation(48 CFR Chapter 1) may define other words or terms andthose definitions only apply to the part, subpart, or sectionwhere the word or term is defined (see the Index for locations).

Subpart 2.1—Definitions

2.101 Definitions.(a) A word or a term, defined in this section, has the same

meaning throughout this regulation (48 CFR Chapter 1),unless—

(1) The context in which the word or term is used clearlyrequires a different meaning; or

(2) Another FAR part, subpart, or section provides a dif-ferent definition for the particular part or portion of the part.

(b) If a word or term that is defined in this section is defineddifferently in another part, subpart, or section of this regula-tion (48 CFR Chapter 1), the definition in—

(1) This section includes a cross-reference to the otherdefinitions; and

(2) That part, subpart, or section applies to the word orterm when used in that part, subpart, or section.

“Acquisition” means the acquiring by contract with appro-priated funds of supplies or services (including construction)by and for the use of the Federal Government through pur-chase or lease, whether the supplies or services are already inexistence or must be created, developed, demonstrated, andevaluated. Acquisition begins at the point when agency needsare established and includes the description of requirements tosatisfy agency needs, solicitation and selection of sources,award of contracts, contract financing, contract performance,contract administration, and those technical and managementfunctions directly related to the process of fulfilling agencyneeds by contract.

“Acquisition planning” means the process by which theefforts of all personnel responsible for an acquisition are coor-dinated and integrated through a comprehensive plan for ful-filling the agency need in a timely manner and at a reasonablecost. It includes developing the overall strategy for managingthe acquisition.

“Adequate evidence” means information sufficient to sup-port the reasonable belief that a particular act or omission hasoccurred.

“Advisory and assistance services” means those servicesprovided under contract by nongovernmental sources to sup-

port or improve: organizational policy development; deci-sion-making; management and administration; program and/or project management and administration; or R&D activities.It can also mean the furnishing of professional advice or assis-tance rendered to improve the effectiveness of Federal man-agement processes or procedures (including those of anengineering and technical nature). In rendering the foregoingservices, outputs may take the form of information, advice,opinions, alternatives, analyses, evaluations, recommenda-tions, training and the day-to-day aid of support personnelneeded for the successful performance of ongoing Federaloperations. All advisory and assistance services are classifiedin one of the following definitional subdivisions:

(1) Management and professional support services,i.e., contractual services that provide assistance, advice ortraining for the efficient and effective management and oper-ation of organizations, activities (including management andsupport services for R&D activities), or systems. These ser-vices are normally closely related to the basic responsibilitiesand mission of the agency originating the requirement for theacquisition of services by contract. Included are efforts thatsupport or contribute to improved organization of programmanagement, logistics management, project monitoring andreporting, data collection, budgeting, accounting, perfor-mance auditing, and administrative technical support for con-ferences and training programs.

(2) Studies, analyses and evaluations, i.e., contractedservices that provide organized, analytical assessments/eval-uations in support of policy development, decision-making,management, or administration. Included are studies in sup-port of R&D activities. Also included are acquisitions of mod-els, methodologies, and related software supporting studies,analyses or evaluations.

(3) Engineering and technical services, i.e., contractualservices used to support the program office during the acqui-sition cycle by providing such services as systems engineeringand technical direction (see 9.505-1(b)) to ensure the effectiveoperation and maintenance of a weapon system or major sys-tem as defined in OMB Circular No. A-109 or to providedirect support of a weapon system that is essential to research,development, production, operation or maintenance of thesystem.

“Affiliates” means associated business concerns or indi-viduals if, directly or indirectly—

(1) Either one controls or can control the other; or(2) A third party controls or can control both.

“Agency head” or “head of the agency” means the Secre-tary, Attorney General, Administrator, Governor, Chairper-son, or other chief official of an executive agency, unlessotherwise indicated, including any deputy or assistant chiefofficial of an executive agency.

“Alternate” means a substantive variation of a basic provi-sion or clause prescribed for use in a defined circumstance. It


FAC 2005–01 MARCH 9, 2005

2.1-2

adds wording to, deletes wording from, or substitutes speci-fied wording for a portion of the basic provision or clause. Thealternate version of a provision or clause is the basic provisionor clause as changed by the addition, deletion, or substitution(see 52.105(a)).

“Architect-engineer services,” as defined in 40 U.S.C.1102, means—

(1) Professional services of an architectural or engineer-ing nature, as defined by State law, if applicable, that arerequired to be performed or approved by a person licensed,registered, or certified to provide those services;

(2) Professional services of an architectural or engineer-ing nature performed by contract that are associated withresearch, planning, development, design, construction, alter-ation, or repair of real property; and

(3) Those other professional services of an architecturalor engineering nature, or incidental services, that members ofthe architectural and engineering professions (and individualsin their employ) may logically or justifiably perform, includ-ing studies, investigations, surveying and mapping, tests,evaluations, consultations, comprehensive planning, programmanagement, conceptual designs, plans and specifications,value engineering, construction phase services, soils engi-neering, drawing reviews, preparation of operating and main-tenance manuals, and other related services.

“Assignment of claims” means the transfer or making overby the contractor to a bank, trust company, or other financinginstitution, as security for a loan to the contractor, of its rightto be paid by the Government for contract performance.

“Basic research” means that research directed towardincreasing knowledge in science. The primary aim of basicresearch is a fuller knowledge or understanding of the subjectunder study, rather than any practical application of thatknowledge.

“Best value” means the expected outcome of an acquisitionthat, in the Government’s estimation, provides the greatestoverall benefit in response to the requirement.

“Bid sample” means a product sample required to be sub-mitted by an offeror to show characteristics of the offeredproducts that cannot adequately be described by specifica-tions, purchase descriptions, or the solicitation (e.g., balance,facility of use, or pattern).

“Broad agency announcement” means a general announce-ment of an agency’s research interest including criteria forselecting proposals and soliciting the participation of all off-erors capable of satisfying the Government’s needs (see6.102(d)(2)).

“Bundled contract” means a contract where the require-ments have been consolidated by bundling. (See the definitionof bundling.)

“Bundling” means—(1) Consolidating two or more requirements for sup-

plies or services, previously provided or performed under sep-

arate smaller contracts, into a solicitation for a single contractthat is likely to be unsuitable for award to a small businessconcern due to—

(i) The diversity, size, or specialized nature of theelements of the performance specified;

(ii) The aggregate dollar value of the anticipatedaward;

(iii) The geographical dispersion of the contract per-formance sites; or

(iv) Any combination of the factors described inparagraphs (1)(i), (ii), and (iii) of this definition.

(2) “Separate smaller contract” as used in this defini-tion, means a contract that has been performed by one or moresmall business concerns or that was suitable for award to oneor more small business concerns.

(3) “Single contract” as used in this definition,includes—

(i) Multiple awards of indefinite-quantity contractsunder a single solicitation for the same or similar supplies orservices to two or more sources (see FAR 16.504(c)); and

(ii) An order placed against an indefinite quantitycontract under a—

(A) Federal Supply Schedule contract; or(B) Task-order contract or delivery-order contract

awarded by another agency (i.e., Governmentwide acquisi-tion contract or multi-agency contract).

(4) This definition does not apply to a contract that willbe awarded and performed entirely outside of the UnitedStates.

“Business Partner Network (BPN)” means an integratedelectronic infrastructure the Government uses to manage(i.e., collect, validate, access and maintain) the information itneeds to transact business with its contractors. The BPN islocated at http://www.bpn.gov.

“Business unit” means any segment of an organization, oran entire business organization that is not divided intosegments.

“Central Contractor Registration (CCR) database” meansthe primary Government repository for contractor informa-tion required for the conduct of business with theGovernment.

“Change-of-name agreement” means a legal instrumentexecuted by the contractor and the Government that recog-nizes the legal change of name of the contractor without dis-turbing the original contractual rights and obligations of theparties.

“Change order” means a written order, signed by the con-tracting officer, directing the contractor to make a change thatthe Changes clause authorizes the contracting officer to orderwithout the contractor’s consent.

“Claim” means a written demand or written assertion byone of the contracting parties seeking, as a matter of right, thepayment of money in a sum certain, the adjustment or inter-

SUBPART 2.1—DEFINITIONS 2.101

2.1-3

pretation of contract terms, or other relief arising under orrelating to the contract. However, a written demand or writtenassertion by the contractor seeking the payment of moneyexceeding $100,000 is not a claim under the Contract Dis-putes Act of 1978 until certified as required by the Act. Avoucher, invoice, or other routine request for payment that isnot in dispute when submitted is not a claim. The submissionmay be converted to a claim, by written notice to the contract-ing officer as provided in 33.206(a), if it is disputed either asto liability or amount or is not acted upon in a reasonable time.

“Classified acquisition” means an acquisition in which off-erors must have access to classified information to properlysubmit an offer or quotation, to understand the performancerequirements, or to perform the contract.

“Classified contract” means any contract in which the con-tractor or its employees must have access to classified infor-mation during contract performance. A contract may be aclassified contract even though the contract document itself isunclassified.

“Classified information” means any knowledge that can becommunicated or any documentary material, regardless of itsphysical form or characteristics, that—

(1)(i) Is owned by, is produced by or for, or is under thecontrol of the United States Government; or

(ii) Has been classified by the Department of Energyas privately generated restricted data following the proceduresin 10 CFR 1045.21; and

(2) Must be protected against unauthorized disclosureaccording to Executive Order 12958, Classified NationalSecurity Information, April 17, 1995, or classified in accor-dance with the Atomic Energy Act of 1954.

“Cognizant Federal agency” means the Federal agencythat, on behalf of all Federal agencies, is responsible for estab-lishing final indirect cost rates and forward pricing rates, ifapplicable, and administering cost accounting standards forall contracts in a business unit.

“Commercial component” means any component that is acommercial item.

“Commercial item” means—(1) Any item, other than real property, that is of a type

customarily used by the general public or by non-governmen-tal entities for purposes other than governmental purposes,and—

(i) Has been sold, leased, or licensed to the generalpublic; or

(ii) Has been offered for sale, lease, or license to thegeneral public;

(2) Any item that evolved from an item described inparagraph (1) of this definition through advances in technol-ogy or performance and that is not yet available in the com-mercial marketplace, but will be available in the commercialmarketplace in time to satisfy the delivery requirements undera Government solicitation;

(3) Any item that would satisfy a criterion expressed inparagraphs (1) or (2) of this definition, but for—

(i) Modifications of a type customarily available inthe commercial marketplace; or

(ii) Minor modifications of a type not customarilyavailable in the commercial marketplace made to meet Fed-eral Government requirements. Minor modifications meansmodifications that do not significantly alter the nongovern-mental function or essential physical characteristics of an itemor component, or change the purpose of a process. Factors tobe considered in determining whether a modification is minorinclude the value and size of the modification and the com-parative value and size of the final product. Dollar values andpercentages may be used as guideposts, but are not conclusiveevidence that a modification is minor;

(4) Any combination of items meeting the requirementsof paragraphs (1), (2), (3), or (5) of this definition that are ofa type customarily combined and sold in combination to thegeneral public;

(5) Installation services, maintenance services, repairservices, training services, and other services if—

(i) Such services are procured for support of an itemreferred to in paragraph (1), (2), (3), or (4) of this definition,regardless of whether such services are provided by the samesource or at the same time as the item; and

(ii) The source of such services provides similar ser-vices contemporaneously to the general public under termsand conditions similar to those offered to the FederalGovernment;

(6) Services of a type offered and sold competitively insubstantial quantities in the commercial marketplace based onestablished catalog or market prices for specific tasks per-formed or specific outcomes to be achieved and under stan-dard commercial terms and conditions. This does not includeservices that are sold based on hourly rates without an estab-lished catalog or market price for a specific service performedor a specific outcome to be achieved. For purposes of theseservices—

(i) “Catalog price” means a price included in a cata-log, price list, schedule, or other form that is regularly main-tained by the manufacturer or vendor, is either published orotherwise available for inspection by customers, and statesprices at which sales are currently, or were last, made to a sig-nificant number of buyers constituting the general public; and

(ii) “Market prices” means current prices that areestablished in the course of ordinary trade between buyers andsellers free to bargain and that can be substantiated throughcompetition or from sources independent of the offerors.

(7) Any item, combination of items, or service referredto in paragraphs (1) through (6) of this definition, notwith-standing the fact that the item, combination of items, or ser-vice is transferred between or among separate divisions,subsidiaries, or affiliates of a contractor; or


2.1-4

(8) A nondevelopmental item, if the procuring agencydetermines the item was developed exclusively at privateexpense and sold in substantial quantities, on a competitivebasis, to multiple State and local governments.

“Component” means any item supplied to the Governmentas part of an end item or of another compon