Federal Acquisition Regulations
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The Federal Acquisition Regulations (usually referred to as the FAR or F.A.R.), are a series of regulations issued by the Federal government of the United States that concern the requirements of contractors for selling to the government, the terms under which the government obtains ownership, title and control of the goods or services purchased, and rules on specifications, payments and conduct and actions regarding solicitation of bids and payment of invoices.
The 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 41 of the United States Code). It is prepared, issued, and maintained jointly by the Secretary of Defense, the Administrator of General Services, and the Administrator, National Aeronautics and Space Administration (48 CFR 1.103).
The FAR consists of tens of thousands of pages as published in the Federal Register and consist of two parts: the general acquisition regulations that govern all transactions with the government in general, and the specific regulations issued by a specific federal agency that govern transactions with that agency. One of the best-known examples of the latter is the Defense Federal Acquisition Regulation Supplement (DFARS) which is used by the Department of Defense.
The purpose of the FAR is to specify exactly how the government is to acquire a particular product or service, how it is to be judged in terms of quality and price, and to ensure the government does not pay for certain prohibited practices such as cost of lobbying, cost of financing (the government is presumed to pay its bills and thus the supplier should not have to include loss reserves), and to prevent kickbacks, undue influence, corruption and other misconduct. It may also include requirements for purchases to be made in the United States, for large organizations to use smaller ones (including women- and minority-owned and disadvantaged business enterprises) as subcontractors, to not discriminate against certain classes of people, to engage in certain practices such as minority hiring and affirmative action, and other requirements depending on the type of contract and its dollar value.
For example, when the U.S. Government purchases a computer program, it obtains complete ownership of that program unless the program is supplied pursuant to the commercial computer software provisions of the FAR, in which case it receives only restricted rights, similar to that of an ordinary purchaser of software at retail.
When a government agency issues a contract or a proposal it will generally specify a long list of FAR provisions that apply to that contract. The FAR provisions will typically cover a hundred pages or more, and specify certain conditions which the bidder must either comply with or be able to comply with in order to be awarded the contract, unless the bidder is in some manner exempt from them for various reasons (such as being below a certain size in terms of either net income or number of employees, for example).
In many cases, contract awards can be challenged and set aside if a challenger can prove the FARs have not been complied with; in some cases the challenger will do this in an attempt to disqualify a particular bidder, usually so that the challenger can be awarded the contract in lieu of the original bidder's award of the contract.
Many have suggested that the complexity of complying with the FAR discourages competition -- especially by small companies.
