Federal Acquisition Regulation for Businesses

Welcome to the wonderful world of government contracting.  This is episode 20 and today’s topic is on the Federal Acquisition Regulation.

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While developing your business strategy it is important to get familiar with the rules and regulations associated with government contracting.  That is why today's topic is about the Federal Acquisition Regulation (FAR).  The FAR is what contracting officers use to create the contracts that you as a small business owner will sign.  Since it is a binding document what better way to prepare to expand into government contracting then learn about the FAR.

Congress created the Federal Acquisition Regulation otherwise known as the FAR on April 1, 1984.  To created standardize policies and procedures across agencies.  The FAR is the primary document and agency acquisition regulations implement or supplement the FAR.   The FAR system does not include internal agency guidance.

FAR Vision

The vision for the Federal Acquisition System is to timely deliver the best value product or service to the customer while maintaining the public’s trust and fulfilling public policy objectives. Reference: 48CFR 1.102.  CFR stands for Code of Federal Regulations.

The Federal Aviation Administration does not use the FAR. All other agencies must follow this regulation.  If you elect to do business with the FAA then you will need to become familiar with the rules and regulations that they follow.

FAR Oversight

The Secretary of Defense, Administrator of General Services and the Administrator, and the National Aeronautics and Space Administration is overall responsible for the FAR System.

Any proposed rules, government agency rules, and public notices are published daily, except on federal holidays in the Federal Register.  You can also find a combined form in the Code of Federal Regulations (CFR).  If there is a dispute between the CFR and the FAR, the CFR will override the FAR.  I doubt that as a contractor this will impact you.  However, I have included this for your information anyways.

The public will have opportunities to comment on these changes to the FAR.   To comment please go the Federal Register. The comment period is generally open between 30 days and 60 days.  Though 60 days is generally the standard length of time that the public has to comment.   It is important for businesses to comment on these proposed changes.  Your input can impact the final rule.  I have seen it happen in the past.  If you are serious about contracting for the government then you need to voice your concerns when the government announces these revisions or new rules are open to public comment.  You need to make this apart of your business strategy.

FAR clauses and provisions will be incorporated in federal solicitations and contracts in either full text or more commonly in by reference.  It does not matter how these clauses and provisions will be entered into the solicitations and contracts they have the same force and effect as those FAR terms included in full text.

Small Business Responsibility

Any small business seeking to perform or already performing work for the federal government will need to educate and familiarize themselves with the FAR.  The best website for this is http://farsite.hill.af.mil/. It is also important that you understand the new rules and regulations the government is proposing.  This is important as your voice can change how the final rules are written.  Any significant proposed rule must have a comment period.  Sometimes the government will also hold public forums where you can voice your concerns regarding these rules.  It would be a great idea if you were notified when proposed changes to the FAR were announced.  Check out the Federal Register to see if that option is available.  Please consider adding this as part of your business strategy.

There are parts of the FAR that every contractor must know.  For example, Part 19 of the FAR covers Small Business Programs; FAR Part 8 covers required Sources of Supplies and Services; Part 9 of FAR covers Contractor Qualifications; FAR Part 12 covers Acquisition of Commercial Items; Part 13 of FAR covers Simplified Acquisition Procedures; Part 14 Covers Sealed Bidding; FAR Part 15 Covers Contracting by Negotiation; Part 22 of FAR Covers Application of Labor Laws to Government Acquisitions, and so on.

The Christian Doctrine Overview

Contracting Officers use the FAR to write the contracts.  If they forget to include a clause you are still liable.  This is “The Christian Doctrine”.  Taking this doctrine into consideration when making the business decision is important as it can have a negative impact on your business.  Please consider adding this to your business strategy to ensure that you are fully aware of potential consequences.

The Christian Doctrine. "In both commercial and Government contracting, written contracts usually reflect the entire scope of the contracting parties’ agreement.  However, in Government contracts, the written agreement does not always reflect the rights, obligations, and responsibilities of the contracting parties.  Both the courts and Boards of Contract Appeals have used the Christian Doctrine to incorporate, “as a matter of law,” mandatory procurement clauses into Government contracts.  The Christian Doctrine has been used to insert clauses unintentionally left out of the contract as well as mandatory clauses that the parties, in good faith, believed they had negotiated out of the contract.  When insertion of previously omitted mandatory clauses can fundamentally alter the contract and alter the bargain struck between the parties and potentially force a contractor to incur additional costs or obligations not anticipated at the time of contract execution."  Reference: "http://govcon360.com/wp-content/uploads/2015/09/The-Christian-Doctrine1.pdf

Impact on Businesses

In order not to be taken by surprise, businesses must be aware of the required regulations to ensure they are not disadvantaged by a mandatory clause that was not included in the original written contract.  If the contract does not contain an authorized deviation for an omitted clause, or if a contracting officer mistakenly concluded that a clause did not apply, the contractor may be forced to incur costs or obligations that were not anticipated when the contractor submitted its proposal. “Reference: "http://govcon360.com/wp-content/uploads/2015/09/The-Christian-Doctrine1.pdf".  This is why it is important to understand the risks associated with the Christian Doctrine.  Please consider adding this topic to your business strategy.

My goal is not to deter you from becoming a contractor for the government.  The more educated you are the better decisions you can make for your business.  It is imperative that you consider these topics when developing a business strategy for working with the government.  Don't wait, act now.

We would greatly appreciate it if you would take a moment to subscribe and rate our podcast.  Your feedback is important to us and your suggestions help us improves our podcast. 

 

Websites:

FAR – 48CFR1.102
Federal Acquisition Regulation - http://farsite.hill.af.mil/
Federal Register - https://www.federalregister.gov/
The Christian Doctrine - http://govcon360.com/wp-content/uploads/2015/09/The-Christian-Doctrine1.pdf