Overview
FAR Subpart 16.7 prescribes policies and procedures for establishing Basic Agreements (BA) and Basic Ordering Agreements (BOA). These are written instruments of understanding—not legally binding contracts—designed to expedite the procurement process by pre-negotiating terms, clauses, and pricing methods for future requirements.
Key Rules
- Not a Contract: Neither a Basic Agreement nor a Basic Ordering Agreement constitutes a contract. They do not obligate funds, cite appropriations, or guarantee that the government will place future orders.
- Competition Requirements: Agreements cannot be used to restrict competition. For BOAs, Contracting Officers must still obtain competition (per FAR Part 6) and synopsize requirements (per FAR Part 5) for individual orders.
- Annual Review: Both BAs and BOAs must be reviewed annually and revised to ensure they conform to current statutory and regulatory requirements.
- Modification Limits: Agreements can only be changed by modifying the agreement itself, not by the individual contracts or orders that incorporate them.
- Pricing for BOAs: Prices must be established before the contractor begins work, unless the requirement is urgent/compelling or the BOA provides a specific procedure for timely pricing with a defined ceiling price.
- Termination: Basic Agreements must allow for discontinuance by either party with 30 days' written notice.
Responsibilities
- Contracting Officers (CO):
- Negotiate the foundational clauses and terms of the agreement.
- Conduct annual reviews and updates to the agreements.
- For BOAs, ensure each order includes a scope of work, complies with competition requirements, and includes necessary Justifications and Approvals (J&As).
- Verify that orders under a BOA do not prejudice other offerors if placed after competition.
- Agencies:
- Authorized to list specific government activities permitted to issue orders under a BOA.
- Encouraged to share and utilize existing basic agreements from other agencies to reduce administrative duplication.
- Contractors:
- Negotiate recurring clauses and pricing methods to be used in future contracts.
- Provide notice if they wish to discontinue the agreement.
Practical Implications
- Administrative Efficiency: BAs and BOAs are primarily tools for reducing "administrative lead-time." By negotiating boilerplate clauses (BAs) or pricing methodologies (BOAs) upfront, the government can move much faster when a specific need arises.
- Uncertain Requirements: BOAs are particularly useful in "support" scenarios—such as equipment repair or spare parts—where the government knows it will need services but cannot predict the exact quantity or timing.
- Risk of Compliance: Because these agreements are not contracts, a CO must be careful to treat each order under a BOA as a new contract action. This means the CO must still perform a full legal and regulatory check (e.g., Small Business set-asides, EEO clearances, and SAM exclusions) at the time of the order, just as they would for a standalone contract.
- Standardization: Using BAs helps resolve "significant recurring negotiating problems" with specific contractors by settling disputes over standard clauses before an actual requirement is on the line.