The U.S. government is the world’s largest buyer of products and services—to the tune of about $200 million a year. Because so much is at stake, a set of rules called the Federal Acquisition Regulation (“FAR”) has been created that governs the acquisition process by which the government acquires goods and services. FAR is codified in Parts 1 through 53 of Title 48 of the Code of Federal Regulations. The FAR’s purpose is to provide “uniform policies and procedures for acquisition” of those goods and services. 49 C.F.R. 1.101. The vision of FAR “is to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives.”
What are the Guiding Principles of FAR?
There are four performance standards of FAR:
- Satisfy the customer in terms of cost, quality, and timeliness of the delivered product or service;
- Minimize administrative operating costs,
- Conduct business with integrity, fairness, and openness, and
- Fulfill public policy objectives.
What Agencies Must Comply with FAR?
The FAR applies to acquisitions from almost all executive agencies. The Department of Defense makes most of purchases. It does not apply to legislative branch or judicial branch agencies, although agencies outside the executive branch can elect to adopt FAR as a policy.
What is Covered Under FAR?
FAR provides contracting officers (which is a person “with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings”) with FAR’s policies, requirements and any exception to those requirements.
The “acquisition process” of goods and services 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.
What are Parts 52 and 53 of FAR?
Parts 52 and 53 are especially important under FAR because these sections include standard provisions and clauses that should be included in any contract to acquire goods or services.
How Does the FAR Impact Federal Contracts?
Since the FAR itself only regulates executive branch federal agencies, its provisions do not specifically apply to the contractors who are in binding contracts with those agencies. It is the contract provisions themselves that bind the contractors. That is why it is very important that the contract itself has the proper contract provisions, especially the provisions that are required to be included.
Do Amendments to FAR Impact Existing Contracts?
Generally, no. Any amendments to FAR usually would not affect and contracts entered into prior to the date of the amendment.
What Consequences Exist If a Contract Fails to Contain a Required Clause?
While FAR was created to protect the government’s interest, which is why there are certain provisions that must be included in contracts. However, there have been times when certain required provisions were left out of contracts. When faced with this question, certain courts have “read” the required clauses into the contracts. Some of the clauses that have been “read in” have been allowing the government to terminate contracts for default, addressing protests after award, and governing contractor’s use of government property.