2024: The FAR, Federal Acquisition Regulations - Part 2

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THE FAR

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2024 Webinar Series
THE FAR
FAR PART #2:
Definitions of Words and Terms
SPEAKER: Eric Crusius
FIRM: Holland & Knight
EMAIL: Eric.Crusius@hklaw.com

2024 Webinar Series
THE FAR
THE FAR – PART 2

What is in FAR Part 2?
• FAR Part 2 provides frequently used terms in the FAR and provides for
the incorporation of “these definitions in solicitations and contracts by
reference.” FAR 2.000
• Provides for all the definitions throughout the FAR unless:
• The context “clearly” changes the meaning of the term or
• Another section provides for a different definition.
• The slides that follow do not include all definitions, but have some critical
ones with analysis.

Important Definitions
• Best value: means the expected outcome of an acquisition that, in the
Government's estimation, provides the greatest overall benefit in
response to the requirement.
• Important Context: best value is the method by which most competitions
are decided.
• When bidding on a contract that will be awarded on a best value
basis, what is “best value” should be defined by Section M of the
solicitation.

Bundling: “Means a subset of consolidation that combines two or more
requirements for supplies or services, previously provided or performed under
separate smaller contracts (see paragraph (2) of this definition), into a
solicitation for a single contract, a multiple-award contract, or a task or
delivery order that is likely to be unsuitable for award to a small business
concern (even if it is suitable for award to a small business with a Small
Business Teaming Arrangement) due to: (i)he diversity, size, or specialized
nature of the elements of the performance specified; (ii) The aggregate dollar
value of the anticipated award; (iii) The geographical dispersion of the
contract performance sites; or (iv) Any combination of the factors described in
paragraphs (1)(i), (ii), and (iii) of this definition.”

Important Context (Bundling): this term and its interpretation are at the
center of pre-award protest decisions when agencies combine various
requirements and make them out of reach for small businesses.
GAO: “Because of the restrictive impact of bundling, we will sustain a
protest challenging a bundled solicitation, unless the agency has a
reasonable basis for its contention that bundling is necessary.”
Edp Enterprises, Inc., B-284533.6 (May 19, 2003)

Change Order: “means a written order, signed by the contracting
officer, directing the contractor to make a change that the Changes clause
authorizes the contracting officer to order without the contractor’s consent.”
Important Context: there are different changes clauses depending on
the circumstances. Most fixed-price contracts utilize FAR 52.243-1, for
instance. Contractors must assert rights to an adjustment under this clause
within 30 days. After 30 days, the contracting officer has discretion to accept
it.

Claim: “means a written demand or written assertion by one of the
contracting parties seeking, as a matter of right, the payment of money in a sum
certain, the adjustment or interpretation of contract terms, or other relief arising
under or relating to the contract.”
Important Context: the definition provides that a claim for over $100,000 is
not a claim until it is certified as required by statute. 41 USC § 7103(b) requires
certification by someone authorized to bind the contractor that (1) the claim is made
in good faith, (2) the supporting data is accurate to the best of the contractor’s
knowledge, (3) the claim accurately reflects what the contractor thinks is owed, and
(4) the certifier is authorized by the contractor to certify the claim.

Commercial Product: a product that is “of a type customarily used by the
general public or nongovernmental entities for purposes other than
governmental purposes, and” has been sold or offered for sale to the general
public. Other instances can include:
• Advances in technology that will be made available
• Modifications of a type customarily made available in the commercial
marketplace
• Minor modifications not available in the commercial marketplace.
• A nondevelopmental item developed at private expense and sold in
“substantial quantities” to multiple state, local, or foreign governments.

Commercial Service:
• “Installation services, maintenance services, repair services, training
services, and other services if –” (1) such services are in support of a
“commercial product” or the source provides a similar services to the
general public under similar terms and conditions.
• Services sold competitively in substantial quantities in the commercial
marketplace based on “established catalogue or market prices…”
• Catalogue price and market prices are defined in the clause.

Important Context: the definitions of “commercial product” and
“commercial service” evolved from the definition of “commercial item” under a
new FAR Rule effective December 6, 2021. This was from a recommendation
by the Section 809 Panel. The change in definitions is not intended to change
the scope in products and services that are considered commercial, but to
clarify both scenarios.

Commercially available off-the-shelf (COTS) item: are commercial
products sold in "substantial qualities” commercially and sold to the government
in the same form.
Important Context: certain laws are not applicable to COTS items
compared to commercial products.

Contracting Officer: is “a person with the authority to enter into,
administer, and/or terminate contracts and make related determinations and
findings.”
Important Context: when taking direction from the Government, ensure
that the direction is authorized by the contracting officer if it changes the
contract.

Cost realism: is when the costs in an offeror’s proposal: (1) are realistic,
(2) reflect a clear understanding of the requirements, and (3) are consistent with
the technical proposal.
Important Context: contracting officers are not required to conduct a cost
realism analysis unless they announce they will do one. DFARS 252.204-24,
however, may change that for DOD contracts. It requires contracting officers to,
among other things, consider “price risk.” Price risk is “a measure of whether a
proposed price for a product or service is consistent with historical prices paid
for that item or service.”

Day: a calendar day (unless specified otherwise)
Debarment: is when a debarring official excludes a contractor from
Government contracting and subcontracting “for a reasonable, specified
period.” Suspension is for a temporary period, but is still disqualified.
Important Context: whether a contractor should be suspended or
debarred is based on present responsibility under FAR Part 9.

In writing, “writing,” or “written”: “any worded or numbered expression
that can be read, reproduced, and later communicated, and includes
electronically transmitted and stored information.”
Important Context: includes electronic information.

Information and communication technology: includes computers and
peripheral equipment and the transmission of electronic data.
Important Context: this is different than the definition of “information
technology” under this clause or the ByteDance FAR clause (FAR 52.204-27).
Those definitions are similar, but not identical.

Micro-Purchase threshold is $10,000 except $2,000 for construction
contracts covered by the Davis-Bacon Act or $2,500 for services covered by the
Service Contract Act (and some other less common exceptions).
Important Context: purchases under the micro-purchase threshold have
far fewer compliance requirements.
Option: “a unilateral right in a contract by which, for a specified time, the
Government may elect to purchase additional supplies or services called for by
the contract, or may elect to extend the term of the contract.”

Organizational conflict of interest: “because of other activities or
relationships with other persons, a person is unable or potentially unable to
render impartial assistance or advice to the Government, or the person’s
objectivity in performing the contract work is or might be otherwise impaired, or
a person has an unfair competitive advantage.” (Emphasis Added)
Important Context: new OCI regulations are coming. Check the FAR
case status report for updates. There will be updates to the definitions of
“unequal access to information, impaired objectivity, and biased ground rules.”

Performance Work Statement (PWS): “means a statement of work for
performance-based acquisitions that describes the required results in clear,
specific and objective terms with measurable outcomes.”
Simplified Acquisition Procedures: “means the methods prescribed in
part 13 for making purchases of supplies or services.”
Important Context: the SAT is currently $250,000, with some exceptions.

Small Business Concern: is a “concern, including its affiliates, that is
independently owned and operated, not dominant in the field of operation in
which it is bidding on Government contracts, and qualified as a small business
under the criteria and size standards in 13 CFR part 121 (see 19.102).”
Important Context: the regulations in part 121 specify the factors under
which a business can be deemed small or not.
Sole source acquisition: “a contract for the purchase of supplies or
services that is entered into or proposed to be entered into by an agency after
soliciting and negotiating with only one source.”

Source Selection Information: “means any of the following information that is
prepared for use by an agency for the purpose of evaluating a bid or proposal to
enter into an agency procurement contract, if that information has not been
previously made available to the public or disclosed publicly: (1) Bid prices
submitted in response to an agency invitation for bids, or lists of those bid prices
before bid opening; (2) Proposed costs or prices submitted in response to an
agency solicitation, or lists of those proposed costs or prices; (3) Source selection
plans; (4) Technical evaluation plans; (5) Technical evaluations of proposals; (6)
Cost or price evaluations of proposals; (7) Competitive range determinations that
identify proposals that have a reasonable chance of being selected for award of a
contract; (8) Rankings of bids, proposals, or competitors; (9) Reports and
evaluations of source selection panels, boards, or advisory councils; (10) Other
information marked as “Source Selection Information—See FAR 2.101 and 3.104.”

Termination for convenience: “means the exercise of the Government’s right
to completely or partially terminate performance of work under a contract when it is
in the Government’s interest.”
Termination for default: “means the exercise of the Government’s right to
completely or partially terminate a contract because of the contractor’s actual or
anticipated failure to perform its contractual obligations.”
Important context: see FAR 52.249-2 for termination for convenience FAR
clause (fixed-price) and FAR 52.249-8 for default (fixed-price supply and service),
for instance. There are a number of similar clauses depending on what is being
delivered and how it is being priced.

2024 Webinar Series
THE FAR
THANK YOU FOR ATTENDING!
FAR PART #2:
Definitions of Words and Terms
SPEAKER: Eric Crusius
FIRM: Holland & Knight
EMAIL: Eric.Crusius@hklaw.com

2024 Webinar Series
THE FAR
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The FAR:
Federal Acquisition Regulations
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2024: The FAR, Federal Acquisition Regulations - Part 2

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2024: The FAR, Federal Acquisition Regulations - Part 2