Overview
FAR Part 2 serves as the "dictionary" for the Federal Acquisition Regulation, establishing a common vocabulary to ensure consistency across the federal government. It defines frequently used terms, provides cross-references to specialized definitions in other parts, and establishes the mechanism for incorporating these definitions into solicitations and contracts.
Key Rules
- Hierarchy of Definitions: Definitions in Part 2 apply throughout the FAR (Chapter 1) unless a specific part, subpart, or section provides a different definition for its own unique context.
- Incorporation by Reference: Through Subpart 2.2, these definitions are automatically incorporated into federal solicitations and contracts, ensuring both the Government and the contractor are operating under the same legal interpretations.
- Broad Scope of "Acquisition": The term is defined as a total lifecycle process, beginning when an agency need is first established and continuing through contract administration and closeout.
- Commerciality Standards: Detailed criteria are established to distinguish between "Commercial Products," "Commercial Services," and "COTS" (Commercially Available Off-the-Shelf) items, which dictates the level of regulation and oversight required.
- Best Value Objective: Defined as the expected outcome that provides the "greatest overall benefit" to the Government, moving beyond a simple "lowest price" requirement.
- Certified Cost or Pricing Data: Requires contractors to certify that data is accurate, complete, and current as of a specific date for certain high-value procurements.
Responsibilities
- Contracting Officers (COs): Responsible for signing Change Orders, determining if modifications to commercial products are "minor," and processing "Claims" submitted by contractors.
- Agency Heads: Act as the chief officials (e.g., Secretary, Administrator) responsible for the executive agency’s overall acquisition performance.
- Chief Acquisition Officers (CAOs): Executive-level officials tasked with managing agency-wide acquisition activities and programs.
- Acquisition Personnel (Project Managers/Technical Leads): Responsible for "Acquisition Planning," which requires coordinating all personnel to integrate efforts into a comprehensive strategy.
- Cognizant Federal Agency: Responsible for establishing indirect cost rates and administering cost accounting standards on behalf of all agencies for a specific business unit.
Practical Implications
- Legal Protections in Disputes: The specific definition of a "Claim" (distinguished from a routine invoice or voucher) is critical; if a contractor does not meet the $100,000 certification threshold or the "sum certain" requirement, the request may not be legally recognized under the Contract Disputes Act.
- Small Business Barriers: The definition of "Bundling" provides a regulatory check against agencies combining requirements into a single large contract that would be "unsuitable" for small business participation.
- Streamlined Commercial Procurement: By meeting the definition of a "Commercial Product," a vendor can avoid many of the "Government-unique" requirements (like certified cost or pricing data) that apply to non-commercial items.
- Clarifying Service Types: The three-part subdivision of "Advisory and Assistance Services" (Management/Professional Support, Studies/Analyses, and Engineering/Technical) helps agencies correctly categorize and justify the use of external consultants.