FAR basics for contractors

How the FAR is organised

Fifty-three parts, grouped into subchapters, numbered predictably.

The FAR runs from Part 1 to Part 53, grouped into subchapters covering general matters, acquisition planning, competition and acquisition procedures, socioeconomic programs, contract management, and the clauses and forms themselves. Citations follow a consistent pattern: part, subpart, section, subsection. FAR 19.502-2 is Part 19, Subpart 19.5, Section 19.502, subsection 2.

Two parts do most of the work for a contractor. Part 52 holds the actual contract clauses and provisions, and Part 53 holds the standard forms. Clause numbers echo the part they come from: 52.219 clauses implement Part 19 small business rules, 52.222 clauses implement Part 22 labour requirements.

The distinction between a provision and a clause is worth knowing. Provisions apply to the solicitation and tell you how to bid. Clauses go into the resulting contract and tell you what you have agreed to do. Both live in Part 52.

• Part 52: contract clauses and solicitation provisions
• Part 53: standard forms
• Clause numbers mirror the part they implement
• Provisions govern bidding, clauses govern performance

The parts you will actually meet

A short list covers most of what a contractor encounters.

Part 12 governs the acquisition of commercial products and services, and it matters because it strips out many clauses that would otherwise apply. If you are selling something commercial, being bought under Part 12 is significantly less burdensome than the alternative.

Part 13 covers simplified acquisition procedures for smaller buys, Part 14 covers sealed bidding where award goes to the lowest responsive responsible bidder, and Part 15 covers contracting by negotiation, which is where most RFPs live. Part 15 is also where the source selection rules sit, including the trade-off process and the lowest price technically acceptable process.

Part 16 defines contract types, from firm fixed price to cost reimbursement, and includes the rules for indefinite delivery contracts and the fair opportunity requirement for task orders. Part 19 is the small business programs. Part 31 sets out which costs are allowable on cost-reimbursement work. Part 42 covers contract administration, including performance evaluation. Part 49 covers termination.

• Part 12: commercial products and services
• Part 13: simplified acquisition
• Part 15: negotiated procurement and source selection
• Part 16: contract types, IDIQs, task orders
• Part 19: small business programs and set-asides
• Part 31: allowable costs
• Part 42: administration and performance evaluation

How clauses get into your contract

Mostly by reference, which is why they are easy to miss.

Section I of a solicitation lists the clauses. Most are incorporated by reference, meaning the contract shows only the number, title, and date, and the full text lives in the FAR. A single provision, FAR 52.252-2, is what makes that legally effective. The text is not in your contract document, but the obligation is in your contract.

Some clauses contain fill-ins the agency completes, and those matter: a delivery schedule, an option period, a dollar figure. Others flow down, meaning you are required to include them in your subcontracts. Clause 52.244-6 is the common flow-down for commercial subcontracts, and failing to pass a required clause down is your breach, not your subcontractor’s.

The practical habit is simple. Before pricing, read the clause list, pull the full text of anything you do not recognise, and identify the ones that cost money to comply with: accounting system requirements, cybersecurity controls, wage determinations, reporting, insurance, and record retention.

Thresholds change what applies

The same work bought at a different value follows different rules.

Dollar thresholds decide which procedures and clauses apply. Below the micro-purchase threshold, agencies can buy with minimal process, often on a purchase card. Below the simplified acquisition threshold, Part 13 procedures apply and much of the clause load falls away. Above it, full competition requirements and a longer clause list come into play.

As of the most recent adjustment the micro-purchase threshold is 10,000 dollars and the simplified acquisition threshold is 250,000 dollars for most acquisitions, with higher figures in some circumstances such as declared emergencies and certain overseas contingency operations. These are adjusted for inflation on a five-year cycle, so confirm the current figures in FAR 2.101 rather than relying on a number in an article.

Other thresholds have their own effects: the point at which certified cost or pricing data can be required, the point at which a small business subcontracting plan is required of a large prime, and the point at which performance is reported into CPARS. Knowing roughly where they sit tells you what to expect from a solicitation before you read it.

Agency supplements sit on top

The FAR is the floor, not the whole rulebook.

Agencies add their own regulations. The Defense Department has the DFARS, and Defense contracts frequently carry more obligations than the FAR alone, particularly around cybersecurity, supply chain, and specialty metals. GSA has the GSAM, NASA has the NFS, Homeland Security has the HSAR, and so on down the list.

Supplements are numbered to mirror the FAR: DFARS 252 clauses correspond to FAR 52 clauses, and DFARS 219 corresponds to FAR 19. When you see a 252 number in a clause list, you are looking at a Defense requirement.

Some supplement clauses have real cost consequences. DFARS 252.204-7012 and the related cybersecurity requirements are the most common example, because they impose security controls on any system that stores or transmits covered defense information. Read those before pricing, not after award.

Read a clause for the obligation

Boilerplate is still binding.

When you meet an unfamiliar clause, work through four questions. What does it require me to do or refrain from doing? Does it require a system, a certification, or a record I do not currently have? Does it flow down to subcontractors? And what happens if I do not comply?

The clauses worth the most attention are the ones that require infrastructure rather than an action: an accounting system that can segregate costs, a cybersecurity posture, a timekeeping practice, a document retention period measured in years after final payment. These cannot be retrofitted quickly and are frequently the reason a first cost-reimbursement contract goes badly.

The FAR is freely available at acquisition.gov, including agency supplements and a clause search. Where a clause has legal or financial consequences you cannot assess, that is the point to involve counsel or an accountant, before submission rather than after award.

• What does it oblige me to do?
• Does it require a system or certification I lack?
• Does it flow down to my subcontractors?
• What is the consequence of non-compliance?