Federal Acquisition Regulation
The Federal Acquisition Regulation (FAR) is the principal set of rules in the Federal Acquisition Regulation System. The FAR System is codified at Title 48 of the United States Code of Federal Regulations; the FAR is set forth in Chapter 1. The remainder of the FAR System consists mostly of sets of regulations issued by agencies of the federal government of the United States to supplement the FAR. For example, Chapter 2 is the Defense Federal Acquisition Regulation Supplement; Chapter 3 is the Department of Health and Human Services Acquisition Regulation; Chapter 4 is the Department of Agriculture's Acquisition Regulation; etc. The final three chapters of Title 48 (61, 63 and 99) establish the Civilian Board of Contract Appeals, the Department of Transportation Board of Contract Appeals, and the Cost Accounting Standards Board, respectively. The Armed Services Board of Contract Appeals has been established by charter within the Department of Defense. The FAR System governs the "acquisition process" by which the government purchases ("acquires") goods and services. The process consists of three phases: (1) need recognition and acquisition planning, (2) contract formation, and (3) contract administration. The FAR System regulates the activities of government personnel in carrying out that process.
The FAR was issued pursuant to the Office of Federal Procurement Policy Act of 1974 (Pub. L. 93-400 and Title 41 of the United States Code, Chapter 7). Statutory authority to issue and maintain the FAR resides with the Secretary of Defense, the Administrator of General Services, and the Administrator, National Aeronautics and Space Administration, 41 U.S.C. § 421(c)(1), subject to the approval of the Administrator of Federal Procurement Policy, 41 U.S.C. § 405.
The largest single part of the FAR is Part 52, which contains standard solicitation provisions and contract clauses. Solicitation provisions are certification requirements, notices, and instructions directed at firms that might be interested in competing for a specific contract. These provisions and clauses are of six types: (i) required solicitation provisions; (ii) required-when-applicable solicitation provisions; (iii) optional solicitation provisions; (iv) required contract clauses; (v) required-when-applicable contract clauses; and (vi) optional contract clauses." If the FAR requires that a clause be included in a government contract, but that clause is omitted, case law provides that the missing clause is deemed to be included. This is known as the Christian Doctrine, which is based on the underlying principle that certain government regulations have the force and effect of law (see Davies Precision Machining, Inc. v. U.S., 35 Fed. Cl. 651 (1995)), and government personnel may not deviate from the law without proper authorization. Prospective contractors are presumed to know the law, including the limits of the authority of government personnel.
The single most heavily regulated aspect of acquisition is contract pricing, which is addressed throughout the FAR, but especially in Subpart 15.4, Parts 30 and 31, and Subparts 42.7, 42.8, and 42.17. A large part of the FAR, Subchapter D, describes various socio-economic programs, such as the various small business programs, purchases from foreign sources, and laws written to protect laborers and professionals working under government contracts.
While nearly all government agencies are required to comply with the FAR, some agencies are exempt (e.g., the Federal Aviation Administration, and the U.S. Mint). In those cases, the agency promulgates its own specific procurement rules.
The purpose of the FAR is to provide "uniform policies and procedures for acquisition." Among its guiding principles is to have an acquisition system that satisfies customer's needs in terms of cost, quality, and timeliness; minimize administrative operating costs; conduct business with integrity, fairness, and openness; and fulfill other public policy objectives.
When a government agency issues a solicitation, it will specify the applicable FAR provisions, which may be numerous. In order to be awarded a contract, an offeror must either comply with the provisions, demonstrate that it will be able to comply with them at the time of award, or claim an exemption from them. As an example, Part 30 (Cost Accounting Standards Administration) allows for small businesses to be exempt from those requirements. If the offeror demonstrates that it meets the small business criteria, Part 30 does not apply.
A contract award can be challenged and set aside if a protester can prove that either the contracting agency or the contract awardee did not comply with the requirements of the solicitation. A successful protest can result in reconsideration of the decision to award the contract or award of the contract to the protester in lieu of the original awardee. Even though a successful protester may not ultimately be awarded the contract, the government agency may have to pay the protester's bid and proposal costs.
The Federal Acquisition Regulation is contained within Chapter 1 of Title 48. Chapter 1 is divided into Subchapters A-H, which encompass Parts 1-53. Chapter 1 appears in two volumes, with Subchapters A-G appearing in Volume 1 while Subchapter H occupies all of Volume 2. The volumes are not formal subdivisions of Title 48, but refer instead to the fact that the FAR is printed by the Government Printing Office in two volumes for convenience.
The proper way to cite a regulation within the FAR is by part, subpart, section, subsection, without respect to chapter or subchapter. For instance, the FAR rule on legislative lobbying costs is found at FAR Part 31, Section 205, Subsection 22 (cited as "FAR 31.205-22").
In Volume 1:
- Subchapter A: General
- Part 1. Federal Acquisition Regulations System
- Part 2. Definitions of Words and Terms
- Part 3. Improper Business Practices and Personal Conflicts of Interest
- Part 4. Administrative Matters
- Subchapter B: Acquisition Planning
- Part 5. Publicizing Contract Actions
- Part 6. Competition Requirements
- Part 7. Acquisition Planning
- Part 8. Required Sources of Supplies and Services
- Part 9. Contractor Qualifications
- Part 10. Market Research
- Part 11. Describing Agency Needs
- Part 12. Acquisition of Commercial Items
- Subchapter C: Contracting Methods and Contract Types
- Part 13. Simplified Acquisition Procedures
- Part 14. Sealed Bidding
- Part 15. Contracting by Negotiation
- Part 16. Types of Contracts
- Part 17. Special Contracting Methods
- Part 18. Emergency Acquisitions
- Subchapter D: Socioeconomic Programs
- Part 19. Small business programs
- Parts 20-21. Reserved
- Part 22. Application of Labor Laws to Government Acquisitions
- Part 23. Environment, Energy and Water Efficiency, Renewable Energy Technologies, Occupational Safety, and Drug-Free Workplace
- Part 24. Protection of Privacy and Freedom of Information
- Part 25. Foreign Acquisition
- Part 26. Other Socioeconomic Programs
- Subchapter E: General Contracting Requirements
- Part 27. Patents, Data, and Copyrights
- Part 28. Bonds and Insurance
- Part 29. Taxes
- Part 30. Cost Accounting Standards Administration
- Part 31. Contract Cost Principles and Procedures
- Part 32. Contract Financing
- Part 33. Protests, Disputes, and Appeals
- Subchapter F: Special Categories of Contracting
- Part 34. Major System Acquisition
- Part 35. Research and Development Contracting
- Part 36. Construction and Architect-Engineer Contracts
- Part 37. Service Contracting
- Part 38. Federal Supply Schedule Contracting
- Part 39. Acquisition of Information Technology
- Part 40. Reserved
- Part 41. Acquisition of Utility Services
- Subchapter G: Contract Management
- Part 42. Contract Administration and Audit Services
- Part 43. Contract Modifications
- Part 44. Subcontracting Policies and Procedures
- Part 45. Government Property
- Part 46. Quality Assurance
- Part 47. Transportation
- Part 48. Value Engineering
- Part 49. Termination of Contracts
- Part 50. Extraordinary Contractual Actions and the Safety Act
- Part 51. Use of Government Sources by Contractors
In Volume 2:
- Subchapter H: Clauses and Forms
- Part 52. Solicitation Provisions and Contract Clauses
- Part 53. Forms
- Parts 54-99. Reserved
As the original purpose of the FAR was to consolidate the numerous individual agency regulations into one comprehensive set of standards which would apply government-wide, the issuance of supplemental regulations is closely governed by the FAR. Nearly every major cabinet-level department (and many agencies below them) has issued such regulations, which often place further restrictions or requirements on contractors and contracting officers.
One of the best-known examples of an agency supplement is the Defense Federal Acquisition Regulation Supplement (or DFARS), which is used by the Department of Defense.
The required format for agency FAR supplements is to follow the basic FAR format. To continue the example above, the supplemental DFARS section on legislative lobbying costs is DFARS Subpart 231, Section 205, Subsection 22 (cited as "DFARS 231.205-22").
Some have suggested that the complexity of complying with the FAR discourages competition, especially by small companies. See, e.g., Government Accountability Office, Managing the Supplier Base in the 21st Century (Report GAO-06-533SP) at 7.