The Federal Acquisition Regulation (FAR) is the principal set of rules in the Federal Acquisition Regulation System. This system consists of sets of regulations issued by agencies of the Federal government to govern what is called the "acquisition process," which is the process through which the government purchases ("acquires") goods and services. That process consists of three phases: (1) need recognition and acquisition planning, (2) contract formation, and (3) contract administration. The FAR System regulates the activities of government personnel in carrying out that process. It does not regulate the purchasing activities of private sector firms, except to the extent that parts of it are incorporated into government solicitations and contracts by reference. Nearly all government agencies are required to comply with the FAR. However, some agencies are exempt (e.g., the United States Postal Service, the Tennessee Valley Authority, the Federal Aviation Administration, and the Bonneville Power Administration); in those cases, the agency promulgates its own specific procurement rules.
The FAR is divided into 53 parts, organized into eight Subchapters numbered A through H. Each part is then divided into subparts, sections, and subsections, with further divisions below the subsection level. When a FAR provision is referenced, the subchapters and subparts are ignored. As an example, the regulations regarding lobbying costs is FAR Part 31, Section 205, subsection 22 (referenced as FAR 31.205-22).
The largest single part of the FAR is Part 52, which contains standard contract clauses and "solicitation provisions." Solicitation provisions are certifications, notices, and instructions for firms that plan to compete for a specific contract. Many contract clauses incorporate parts of the FAR into government contracts by reference, by which means they impose FAR rules on contractors. If the FAR requires that a clause which addresses an important topic be included in a government contract, and if the government's acquisition personnel omit the clause without authorization, the agency boards of contract appeals and the Federal courts may interpret the contract as though the clause were, in fact, included.
The single most heavily regulated aspect of acquisition is contract pricing, which is addressed throughout the FAR, but especially in Subpart 15.4, Parts 30 and 31, and Subparts 42.7, 42.8, and 42.17. A large part of the FAR, Subchapter D, describes various socio-economic programs, such as the various small business programs, purchases from foreign sources, and laws written to protect laborers and professionals working under government contracts.
As the original purpose of the FAR was to consolidate the numerous individual agency regulations into one comprehensive set of standards which would apply government-wide, officially individual agencies are discouraged from issuing supplemental regulations. However, nearly every major cabinet-level department (and many agencies below them) has issued such regulations, which often place further restrictions or requirements on contractors.
One of the best-known examples of an agency supplement is the Defense Federal Acquisition Regulation Supplement (or DFARS), which is used by the Department of Defense.
When a government agency issues a contract or a proposal, it will specify a list of FAR provisions that apply to that contract, which may be numerous. In order to be awarded a contract, a bidder must either comply with the provisions, demonstrate that it will be able to comply with them at the time of award, and/or claim an exemption from them.
In many cases, a contract award can be challenged and set aside if a challenger can prove that either the contracting agency and/or the successful bidder did not comply with the contract solicitation requirements, usually so that the challenger can either be awarded the contract in lieu of the original bidder's award of the contract or get another shot at a bid.
Click here to go to the FAR (Federal Acquisition Regulation)
Click here to go to the DFARS (Defense Federal Acquisition Regulation Supplement)