FAR Basics: Complete Guide to the Federal Acquisition Regulation

Quick Overview: The Federal Acquisition Regulation

The Federal Acquisition Regulation (FAR) is the primary set of rules governing how federal agencies buy goods and services. Every government contract incorporates FAR clauses that define your rights and obligations. Understanding FAR basics is essential for government contractors.

FAR Parts

1000s

Of Clauses

All

Federal Agencies

Public

& Accessible

What is the FAR?

The Federal Acquisition Regulation is the codified set of rules for federal procurement. It's published in Title 48 of the Code of Federal Regulations (CFR) and applies to all executive branch agencies.

Purpose of the FAR

✓
Uniform Policies
Consistent rules across all agencies
✓
Fair Competition
Full and open competition requirements
✓
Best Value
Get best value for taxpayer dollars
✓
Integrity
Maintain public trust in procurement

Who Uses the FAR

→Contracting Officers: Administer procurement
→Contractors: Understand obligations
→Attorneys: Interpret contract terms
→Auditors: Verify compliance

Where to Find the FAR

The FAR is publicly available at acquisition.gov. You can search by part, section, or keyword. The site also provides guidance and policy letters interpreting FAR requirements.

FAR Structure

The FAR is organized into 53 parts grouped into eight subchapters. Understanding this structure helps you navigate the regulation.

FAR Subchapters

Subchapter	Parts	Topics
A	1-4	General policies, definitions, ethics
B	5-12	Competition, acquisition planning, sources
C	13-18	Contracting methods (sealed bid, negotiated)
D	19-26	Socioeconomic programs (small business, labor)
E	27-34	General contracting requirements
F	35-41	Special categories (R&D, construction, service)
G	42-51	Contract management, disputes, termination
H	52-53	Clauses and forms

How FAR is Numbered

FAR references follow a specific format: FAR XX.XXX-X

Example: FAR 52.212-4

• 52 = Part (Solicitation Provisions and Contract Clauses)
• 212 = Subpart (Commercial Items)
• 4 = Section (Contract Terms and Conditions)

Key FAR Parts for Contractors

While you don't need to memorize the entire FAR, understanding these key parts will help you navigate government contracting.

Commercial Products & Services

Streamlined procedures for buying commercial items. Fewer requirements, simpler clauses. If your product is commercial, FAR Part 12 applies.

Contracting by Negotiation

Rules for negotiated procurements (RFPs). Covers proposal evaluation, discussions, and award decisions. Most complex procurements use Part 15.

Contract Types

Defines fixed-price, cost-reimbursement, time-and-materials, and other contract types. Understanding contract type determines risk allocation.

Small Business Programs

Set-asides, subcontracting requirements, and SBA programs. Essential reading for small businesses and large contractors with subcontracting plans.

Contract Cost Principles

Defines allowable and unallowable costs for cost-reimbursement contracts. Critical for contractors billing costs to the government.

Protests, Disputes, Appeals

Your rights when you disagree with the government. Covers bid protests, contract disputes, and the appeals process.

Solicitation Provisions & Contract Clauses

The actual clause text incorporated into contracts. When a contract says "FAR 52.XXX", look here for the specific requirements.

Understanding FAR Clauses

Contracts incorporate FAR clauses that impose specific requirements. Some are mandatory; others apply only in certain situations.

Commonly Encountered Clauses

52.212-4 Contract Terms and Conditions—Commercial

Standard terms for commercial item contracts. Covers payment, inspection, warranties, disputes, and termination.

52.222-26 Equal Opportunity

Prohibits discrimination in employment. Required in most contracts over $10,000.

52.232-33 Payment by Electronic Funds Transfer

Requires contractors to receive payment via electronic funds transfer. Must be registered in SAM.gov.

52.243-1 Changes

Gives the government the right to make changes within scope. Contractor entitled to equitable adjustment for changed work.

52.249-2 Termination for Convenience

Allows government to terminate for any reason. Contractor recovers costs and profit on work performed.

Read Your Clauses

Always review the clauses in your specific contract. Clauses may be modified or supplemented. The clause matrix in Section I of your contract identifies exactly which clauses apply.

Agency Supplements (DFARS, etc.)

Individual agencies add their own requirements through FAR supplements. These add to—but don't replace—FAR requirements.

Major FAR Supplements

Supplement	Agency	Key Focus Areas
DFARS	Defense	Security, CMMC, cost accounting, specialty metals
GSAR	GSA	Federal supply schedules, building services
VAAR	Veterans Affairs	SDVOSB, medical supplies, construction
HSAR	Homeland Security	Security requirements, safeguarding
NFS	NASA	Safety, technology transfer, cross-waivers

DFARS Importance

If you work with the Department of Defense, DFARS adds significant requirements:

•CMMC: Cybersecurity Maturity Model Certification
•CUI: Controlled Unclassified Information handling
•Cost Accounting Standards: Enhanced cost tracking
•Buy American: Specialty metals restrictions

FAR Compliance Essentials

Compliance with FAR isn't optional—violations can result in contract termination, suspension, or debarment.

Compliance Areas

✓Employment: Equal opportunity, wages, safety
✓Billing: Cost allowability, invoicing procedures
✓Ethics: Anti-kickback, organizational conflicts
✓Reporting: FSRS, CPARS, required disclosures

Compliance Best Practices

→Read and understand your contract clauses
→Implement compliance training for staff
→Maintain required records and documentation
→Self-report potential violations promptly

Common FAR Issues

1. Unallowable Costs

Billing unallowable costs (entertainment, lobbying, etc.) is a serious violation. Know what costs are allowable before incurring them.

2. Conflicts of Interest

Organizational and personal conflicts of interest can disqualify you from competitions and result in termination.

3. Small Business Misrepresentation

Falsely claiming small business status or size is fraud. Verify your status before self-certifying.

4. Defective Pricing

Providing inaccurate cost or pricing data can result in price reductions and potential False Claims Act liability.

5. Missing Required Certifications

Failing to provide required certifications and representations can make your proposal non-responsive.

Frequently Asked Questions

Do I need to memorize the FAR?

No. You need to know how to find information in the FAR and understand the clauses in your specific contracts. Develop familiarity with commonly-used parts, especially those relevant to your work.

How often does FAR change?

FAR is updated regularly through Federal Acquisition Circulars (FACs). Subscribe to updates at acquisition.gov. Changes affecting your contracts will typically be incorporated through contract modifications.

What if a FAR clause conflicts with the contract?

Generally, conflicts are resolved in a defined order of precedence specified in the contract. The Schedule (specific requirements) typically takes precedence over general provisions.

Does FAR apply to subcontractors?

Many FAR clauses "flow down" to subcontractors. The prime contractor is responsible for including required flow-down clauses in subcontracts. Review your subcontract carefully.

Where can I get help understanding FAR?

Resources include the contracting officer, Procurement Technical Assistance Centers (PTACs), attorneys specializing in government contracts, and industry associations.

Put FAR Knowledge to Work

Understanding FAR helps you compete effectively and perform compliant contracts. BidFinds helps you find the opportunities to put that knowledge into practice.

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Related Resources

Getting Started

Government contracting basics

Pricing Strategies

FAR-compliant pricing

CPARS Guide

Performance evaluations