The Federal Acquisition Regulation ( FAR) is codified in Title 48 of the United States Code of Federal Regulations.
It is issued pursuant to the Office of Federal Procurement Policy Act of 1974 (Pub. L. 93-400 and Title 41of 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 Federal Acquisition Regulation (FAR) is “bible” for government procurement. Contracting Officers from federal agencies refer to this regulation for guidance of virtually every aspect of government procurement process.
As a contractor, you are required to understand the critical clauses that impact your performance. For example, terminations for convenience and default are common clauses that you must be familiar. FAR 19 regulates small business matters; other areas such as pricing and negotiated procurements are also covered under the Federal Acquisition Regulations.
Legal Impact of The Federal Acquisition Regulation
Federal Circuit courts have made it clear that the FAR and its agency supplements have “the force and effect of law,” see Davies Precision Machining, Inc. v. U.S., 35 Fed. Cl. 651 (1995).
Not all agencies follow the FAR. You must be aware that some government contracting agencies have their own procurement regulation. For example, the FAA and the U.S. Mint generate their own rules.
You are subject to the FAR in virtually all aspects of government procurement. As a company doing business with the federal government, you are subject to the Federal Acquisition Regulations in all aspects. When you submit proposals and you enter into a negotiated bidding process, then you are subjecting yourself to the guidelines of FAR 15. Why is this important? Because should have to file a bid protest, your government contracts attorney, should understand the issues that can arise.
If you are a small business, then your company is subject to FAR 19. This area covers a vast array of issues that can arise to include; Contracting with 8(a) companies , setting aside projects for small businesses and more.
You can be subject to breach of contract. Many companies only worry about contents of the FAR when an adverse action arises. By then it’s probably too late. The reality is that most FAR clauses are incorporated by reference into your existing contract.
Failure to understand and follow important FAR clause can have serious implications to include breach of contract allegations and even suspension or debarment. You want to stay as proactive as possible in order to avoid such grave impacts to your company.
Important FAR Clauses
This clause in the Federal Acquisition Regulation often applies when the Government initiates changes to your contract. The contracting officer can make unilateral changes, in designated areas, within the general scope of the contract. You always want to ensure that you receive a written change before commencing work. In the event that you cannot get immediate written change orders, you at least want to get an email from the contracting officer for your records.
Termination for Convenience ( FAR Part 49)
FAR Part 49.5 of the Federal Aquisition Regulations allow the government to terminate your contract when it is in the best interest of the government. Regardless of fault, the contracting officer has a unilateral right to terminate. This FAR clause is important because you are then entitled to statutory damages. You should know what they are.
Federal Acquisition Regulatory Council
The Federal Acquisition Regulatory Council was established to assist in the direction and coordination of Government-wide procurement policy and Government-wide procurement regulatory activities in the Federal Government, in accordance with Title 41, Chapter 7, Section 421 of the Office of Federal Procurement Policy (OFPP) Act. The Administrator, in consultation with the Council, shall ensure that procurement regulations, promulgated by executive agencies, are consistent with the Federal Acquisition Regulation (FAR) and in accordance with any policies issued pursuant to Section 405 of Title 41. The Council manages coordinates controls and monitors the maintenance and issuance of changes in the FAR.
Ensure that Your Company is Familiar and In Compliance With FAR Clauses
As stated earlier, virtually all federal government contracting agencies follow the Federal Acquisition Regulation as guidance from the initial stage of federal procurement all the way to contract closeout.
You want to ensure that you either have people that are trained internally or you should have at least legal counsel for immediate access.