Overview
FAR 13.302 provides the regulatory framework for using purchase orders under Simplified Acquisition Procedures (SAP). It outlines the mandatory elements of a purchase order, the conditions for using unpriced orders, and the procedures for modifying, accepting, or terminating these contractual instruments.
Key Rules
- Pricing Basis: Purchase orders are generally issued on a fixed-price basis, unless the unpriced purchase order method is specifically justified.
- Mandatory Content: Every purchase order must specify the quantity/scope, a determinable delivery or performance date, inspection/acceptance terms (typically at destination), and f.o.b. destination for domestic deliveries.
- Unpriced Purchase Orders: These may only be used when it is impractical to obtain pricing in advance (e.g., repairs requiring disassembly). They must include a realistic monetary limitation (ceiling) that serves as a temporary obligation of funds.
- Contract Formation: A purchase order is legally an offer by the government. It becomes a binding contract when the contractor accepts in writing or begins performance. Written acceptance is only required if the Contracting Officer determines it necessary before performance begins.
- Cancellation vs. Termination:
- Cancellation: Used for orders not yet accepted in writing. If the contractor claims costs were incurred, the cancellation must be processed as a termination.
- Termination: Used for orders already accepted in writing, following the procedures in FAR Part 49 or 12.403.
- Payment & Clauses: Electronic Funds Transfer (EFT) is the mandatory payment method. Contracting Officers must use clause 52.213-4 as a streamlined compilation of terms for simplified acquisitions.
Practical Implications
- Obligation Management: Contracting Officers must actively monitor unpriced purchase orders to ensure timely firm-pricing, as the initial monetary limit is an estimate that must be adjusted once final costs are known.
- Performance Risk: Because a purchase order is often accepted through performance rather than a signature, the government must ensure the order is clearly written and communicated to avoid disputes over terms once work has commenced.
- Streamlined Administration: The use of the consolidated clause at FAR 52.213-4 allows for faster processing by reducing the need to attach dozens of individual clauses common in larger-scale acquisitions.