FedSubK Feature: The Acquisition Lifecycle of Service Contracts - Phase 3 Contract Administration & Closeout
Updated: May 4, 2024
This month we end our three-part series on the acquisition lifecycle of service contracts with an overview of the third and last phase, Contract Administration and Closeout (or “Post Award” Phase). (NOTE: Find Part 1 here and Part 2 here.)
As before, we will talk about each subactivity in this phase but first, let’s review the lifecycle of a typical Federal services contract valued over the Simplified Acquisition Threshold (or “SAT,” presently $250,000).
Figure 1 – Acquisition Lifecycle
You’ve been selected as the awardee of a Federal contract! Congratulations! All that hard work paid off. But the fun isn’t over yet.
To see that pay out, you’ve got to perform. Yes, now you must back up that proposal by providing stellar performance of the requirements. That means providing the personnel promised in the proposal (i.e., Key Personnel), the deliverables necessary to begin performance, and continue building the relationship with your Federal client.
Contract Administration & Closeout (Post Award)
The Contract Administration and Closeout (Post Award) phase is where performance begins with the successful offeror now a Federal Prime Contractor (or “Prime”). The Government and Prime work together to ensure the performance, compliance, and reporting requirements are met and the end user receives the products and/or services required. Tasks are primarily performed by the Prime with Government oversight, acceptance, and performance evaluation.
Tasks in this phase are:
Figure 2 – Steps in the Contract Administration & Closeout (Post Award) Phase
Legend: I = Integrated Project Team, P = Project Management Office / Requestor, and A = Acquisition Office
These tasks will culminate in a completed contract and closeout under which the Government and Prime agree that all deliverables (products or services) have been received, are acceptable, meet inspection criteria, and no further monies are due to the Prime or Government.
Key tasks in this phase and their impacts on the Prime are:
Kick Off Meeting (or “Post Award Conference”) (FAR Subpart 42.503)
The Kick Off Meeting is where contract administration planning and performance planning take place and a post award orientation meeting is conducted between the Prime and the Government. The CO/KO typically determines if and when a Kick Off Meeting is needed. The CO/KO will arrange the time and place, create the agenda, act as the meeting chair (or designate one), brief Government personnel before the meeting, and prepare a summary report of the meeting.
It is not the purpose of the meeting to change the contract. However, the Contracting Officer (CO/KO) may make commitments or give directions within the scope the CO’s/KO’s authority and the contract. The CO/KO must execute a formal written modification before the Prime takes action on such changes. If the chair is not the CO/KO, the chair is not authorized to commit the Government to any changes that impact scope, schedule, or price.
Often on large extraordinarily complex contracts, partnership agreements are developed and partnership meetings between the parties are held. Schedules and processes are agreed to for assurances that a positive relationship continues between the Government and Prime and to lay out how performance issues will be handled and escalated for resolution between the parties. For smaller contracts, a post award letter may be sufficient to outline requirements for communications and submission of deliverables if not already called out in the contract scope, terms, and/or conditions.
Subcontractors do not typically attend the Kick Off Meeting (Post Award Conference) between the Prime and the Government since the Government has no privity of contract with Subcontractors and vice versa. This is also when the Prime’s agreements with their subcontractor should be solidified if not done so already (NOTE: Primes can determine the clauses that flow down to their subcontractors from the solicitation document; little if anything will change in terms of clauses short of a new law or national initiative like a telecommunications ban, TikTok prohibition, or minimum wage increase (as we’ve seen in recent years).
The Prime may ask Government representatives attend the Prime/Subcontractor Kick Off Meeting and Government personnel may attend provided they: (1) remember the limitations in privity of contract, (2) take no action that alters a subcontract, and (3) ensure any changes that may impact the Prime contract with the Government are documented and reported to the CO/KO for further discussions with the Prime and resolution.
Quality Assurance (FAR Part 46)
The Government performs quality assurance through inspection/acceptance, documentation of past performance, monitoring the Prime’s subcontracting plan (if applicable), and coordinates on performance issues and set procedures to remedy any less than satisfactory performance.
Contract clauses for inspection and acceptance of services will be found in Part I, Section E of the solicitation under UCF. For fixed-priced contracts, FAR clause 52.246-4 Inspection of Services - Fixed-Price, requires that the contractor provide and maintain an inspection system acceptable to the Government covering the services under the contract. Other inspection and acceptance clauses exist for other types of contracts (see FAR Subpart 46.3). The Government has the right to always inspect and test all services and places during contract performance. FAR clause 52.246-4 specifically reserves the Government’s right to require reperformance by the Prime for nonconforming services at no cost or reduce the contract price if reduced services result in reduced value. It also puts the Prime on notice that if it fails to promptly perform the services again or to take the necessary action to ensure future performance is in conformance with the contract, the Government may have the serviced performed by others and charge the Prime for any costs incurred related to performance or terminate the contract for default.
Contracts for Commercial Products and Commercial Services
When acquiring commercial products under FAR Part 12, the Government relies on the Contractors' existing quality assurance systems as a substitute for Government inspection and testing before tender for acceptance, unless customary market practices for the commercial product being acquired include in-process inspection. Any in-process inspection by the Government is conducted in a manner consistent with commercial practice.
The Government relies on the Contractor to accomplish all inspection and testing needed to ensure that commercial services acquired conform to contract requirements before they are tendered to the Government.
Contracts aren’t without their share of “administrivia” type tasks. One of those tasks that is most important to the Prime is getting payments.
Payments and Accounting
Invoices must be submitted using the formats required by the Government, if applicable, and may sometimes be submitted electronically via an agency’s/organization’s financial system (i.e., Wide Area Work Flow (WAWF) for DoD, Corps of Engineers Financial Management System (CEFMS), or Vendor Inquiry Payment Electronic Reporting System (VIPERS) to name a few).
This step is CRUCIAL during performance; it is where you want to know your game plan and have your “A-Team” on the job. Why? Because delays in payment mean delays in getting capital to continue performance, pay subcontractors, order supplies, etc.
How often do you invoice? As often as the contract allows. They could be monthly for recurring monthly services, but most often is upon completion of task or deliverable as outlined in the deliverables and/or payment schedule. Other than Firm Fixed Price services may require that you also track costs and bill (and/or provided supporting documentation) in the form of hourly rates, hours expended, or agreed upon work breakdown structures (WBS) down to a specific level, depending on the type of contract (i.e., cost reimbursement, time-and-materials, or labor-hour).
The Government can turn away any invoice that is not considered a “proper” invoice (see FAR Subpart 32.905), meaning accurate, current, and complete with all information required by the agency to be submitted using the format they require (when indicated). Any delay pushes your payment back in the billing / accounts payable process. And when the delay in payment is because of the Prime’s error, there is no prompt payment interest involved (watch for a future FedSubK Feature on Prompt Payment coming in the May edition of FedSubK NOW!).
As mentioned, on complex type service contracts (i.e., cost, time-and-material, or labor-hour) you may have to track, segregate, and report hours, hourly rates, and total costs by line item and accounting string in your invoices or in attachments to support your invoice.
Modifications
Modifications ( sometimes referred to as "change orders") are issued when changes are needed as part of performance due to unforeseen circumstances, changes in conditions or assumptions, and mandatory statutory requirements come into effect. Contracting modifications are issued formally in writing by the Contracting Officer and are typically bilateral in nature, meaning the Prime must first sign the modification before the Contracting Officer signs. However, administrative modifications and modifications based on terms and conditions of the contract may be issued unilaterally, or with only the Contracting Officer’s signature.
Exercising Options
Options exercise the Government’s right to purchase more products or services at a pre-agreed pricing, extend services, or term the term of the contract. In the case of options, the Contracting Officer must supply written notice to the Prime of the Government’s intent to exercise an option within the period specified in the contract.
Options may only be exercised after a determination that all the following apply:
- Funds are available.
- The requirement covered by the option fulfills an existing Government need.
- The exercise of the option is the most advantageous method of fulfilling the
- government’s need, price and other factors considered.
- The option was synopsized per FAR Part 5 unless otherwise exempted.
- The contractor does not have an active exclusion record in SAM.gov (see FAR 9.405-1).
- The contractor’s past performance evaluations on other contract actions have been considered.
- The contractor’s performance on this contract has been acceptable, e.g., received satisfactory ratings.
After considering price and other factors, the Government must make a written determination that exercise of the option is in its best interest based on one of the following:
- A new solicitation would fail to produce a better price or a more advantageous offer than that offered by the option.
- An informal analysis of prices or an examination of the market shows that the option price is better than prices available in the market.
- The time between the award of the contract containing the option and the exercise of the option is so short that it indicates the option price is the lowest price obtainable or the more advantageous offer, considering market stability and comparison of the time since award with the usual duration of contracts for such supplies or services.
Other factors to be considered include the Government’s need for continuity of operations and potential costs of disrupting operations and the effect on small business.
There are two types of options that can extend the life of a contract. They are:
Option to Extend Services
As prescribed in FAR clause 52.217-8 of the same name, the Government may require continued performance of any services within the limits and at the rates specified in the contract (unless revisions are required to meet Department of Labor prevailing rates). This option may be exercised more than once, but the total extension of performance cannot exceed 6 months. The Prime must receive written notice of the Government’s intent to exercise an option to extend services within a period indicated in the fill-in found in the clause, most often 60 calendar days prior to the end of the current contract term.
Option to Extend the Term of the Contract
As prescribed in FAR clause 52.217-9 of the same name, the Government may exercise the option to extend the term of the contract with written notice to the Prime within a time period indicated in the fill-in found in the clause (most often 30 calendar days prior to the end of the current contract term). The Government must give a preliminary written notice of its intent to extend at least 60 days before the contract expires, unless a different number of days is inserted in the clause, though this notice does not commit the Government exercise the extension.
The clause also says that if the option is exercised that the extended contract is considered to include this same option clause and indicate the total duration of the contract, including the exercise of any options periods. Per FAR 17.204(e), unless otherwise approved in accordance with agency procedures and/or statute, the total of the basic period and all option periods cannot exceed 5 years in the case of services.
Performance is chugging along and you’ve come to the anniversary date of the contract. The Government exercises an option to continue performance. But the Government must also now rate the Prime’s performance at certain intervals.
Contractor Performance Assessment Rating System (CPARS)
CPARS is the Government’s official source for past performance information. Agencies must monitor compliance with the past performance evaluation requirements found under FAR Subpart 42.1502, and use the CPARS metric tools to measure the quality and timely reporting of past performance information for each contract that exceeds the SAT, or at such time a modification causes the dollar amount to exceed the SAT. For construction contracts, performance evaluations are required for contracts exceeding $750,000. For architect-engineer contracts, performance evaluations are required for contracts exceeding $35,000.
Past performance evaluations are prepared at least annually for multi-year contracts, and at the time the work under a contract or order is completed. Evaluations are generally for the entity, division, or unit that performed the contract or order. Past performance information shall be entered into CPARS by the Government and addresses, at a minimum, the following factors:
- Technical (quality of product or service).
- Cost control (not applicable for firm-fixed-price or fixed-price with economic price adjustment arrangements).
- Schedule/timeliness.
- Management or business relation
- Small business subcontracting, including reduced or untimely payments to small business subcontractors when a subcontracting plan is required.
- Other factors, as applicable, such as trafficking violations, tax delinquency, failure to report per contract terms and conditions, defective cost or pricing data, terminations, suspension and debarments, and failure to follow limitations on subcontracting.
Factors are evaluated and a supporting narrative is provided by the Government. Factors are rated with a five-scale rating system (i.e., exceptional, very good, satisfactory, marginal, and unsatisfactory). Ratings and narratives must reflect the definitions in the tables found at FAR Subpart 42.1503, Table 42-1 and Table 42-2 (when applicable).
Once entered by the Government, the Contractor will receive notification of a rating and can supply information for the record on any Government rating, comment, or feedback. If the Contractor does not agree with the CPARs rating, the rating still becomes available in the CPARS system for source selection officials to view not later than 14 days after the date on which the Contractor is notified of the evaluation’s availability for comment. The CPARS record is updated with any Contractor comments provided after 14 days as well as any subsequent agency of review of Contractor comments received. CPARS ratings are not subject to FAR protest procedures.
Agencies must use past performance information in CPARS. that is within three years (six years for construction and architect-engineer contracts) of the completion of performance of the evaluated contract or order, and information contained in the Federal Awardee Performance and Integrity Information System (FAPIIS), related to terminations for default or cause.
Contract Closeout or Termination
Contract closeout will occur once the Government makes its final inspection/acceptance and final payment has been made. Contract termination may also prompt an end to contract performance either for the convenience of the Government or due to the deficient performance of the contractor (“default”). Closeout of contract files can be a time-consuming process but is necessary to fully remove completed projects from the Government’s books. Termination, on the other hand, can be a quick process because it is most often reactionary in nature. Both require Government resources and Contractor cooperation to achieve results in a reasonable period.
Closeout
The closeout process is the process most all contracts will go through at the end of the performance cycle. Closeout is triggered by the physical completion of performance under a Federal contract. A contract is “physically completed” when the Contractor has completed the required deliverable and the Government has inspected and accepted supplies, the contractor has performed all services and the Government has accepted those services, and all option provisions, if any, have expired.
The Administering Contracting Officer (ACO), if one has been assigned, handles initiating administrative closeout after receipt of evidence of physical completion. If one has not been assigned, the Contracting Officer will act as the ACO to conduct the closeout. The ACO reviews the contract funds status and notifies interested parties (i.e., contractor, finance, and funding office) of any excess funds that require deobligation (i.e., removal from the contract by modification). Administrative closeout requires that the ACO ensures (as applicable)—
- Disposition of classified material is completed.
- Final patent report is cleared.
- Final royalty report is cleared.
- There is no outstanding value engineering change proposal.
- Plant clearance report is received.
- Property clearance is received.
- All interim or disallowed costs are settled.
- Price revision is completed.
- Subcontracts are settled by the prime contractor.
- Prior year indirect cost rates are settled.
- Termination docket is completed.
- Contract audit is completed.
- Contractor closing statement is completed.
- Contractor final invoice has been submitted.
- Contract funds review is complete and excess funds are deobligated (i.e., taken off the contract by formal written modification).
Files for contracts using simplified acquisition procedures should be considered closed when the ACO receives evidence of receipt of property and final payment, unless otherwise specified by agency regulations.
Files for firm-fixed-price contracts, other than those using simplified acquisition procedures, should be closed within 6 months after the date on which the ACO receives evidence of physical completion.
Files for contracts requiring settlement of indirect cost rates should be closed within 36 months of the month in which the contracting officer receives evidence of physical completion. Files for all other contracts should be closed within 20 months of the month in which the Contracting Officer receives evidence of physical completion.
The ACO will complete a Contract Completion Statement when all tasks are completed and forward the statement to the paying office of record. The paying office will close the contract file upon issuance of the final payment to the Contractor. Note that a contract cannot be closed if it is under litigation or terminations actions have not been completed.
Termination
The termination clauses along with other contract clauses authorize Contracting Officers to terminate contracts for convenience, or for default, and to enter into settlement agreements.
Whether for default or convenience, the Contracting Officer should only terminate a contract when it is in the Government’s interest. A no-cost settlement should be used instead of a termination notice when-
- It is known that the Contractor will accept one,
- Government property was not furnished, and
- There are no outstanding payments, debts due to the Government, or other contractor obligations.
When the price of the undelivered balance of the contract is less than $5,000, the contract should not normally be terminated for convenience but should be permitted to run to completion.
Terminations should only occur after written notification to the Contractor, whether for convenience or default. The notice will say the contract affected, effective date, extent of termination (partial or total), special instructions, and steps the contractor should take to minimize impact on personnel if the termination will result in a significant reduction in the contractor’s workforce.
After the Contracting Officer issues a notice of termination, the Termination Contracting Officer (TCO) (if designated) handles negotiating any settlement with the Contractor. Auditors and TCO’s must promptly schedule and complete audit reviews and negotiations, giving particular attention to the need for prompt action on all settlements involving small business concerns. In the interim, per FAR Subpart 49.104, the Contractor must—
- Stop work immediately on the terminated portion of the contract and stop placing subcontracts thereunder.
- Terminate all subcontracts related to the terminated portion of the prime contract.
- Immediately advise the TCO of any extraordinary circumstances precluding the stoppage of work.
- Perform the continued portion of the contract and submit promptly any request for an equitable adjustment of price for the continued portion, supported by evidence of any increase in the cost, if the termination is partial.
- Take necessary or directed action to protect and preserve property in the contractor’s possession in which the Government has or may acquire an interest and as directed by the TCO, deliver the property to the Government.
- Promptly notify the TCO in writing of any legal proceedings growing out of any subcontract or other commitment related to the terminated portion of the contract.
- Settle outstanding liabilities and proposals arising out of termination of subcontracts, obtaining any approvals or ratifications required by the TCO.
- Promptly submit the Contractor’s own settlement proposal, supported by appropriate schedules.
- Dispose of termination inventory, as directed or authorized by the TCO.
- In the case of terminated construction contracts, ensure the cleanup of the site, protection of serviceable materials, removal of hazards, and other action necessary to leave a safe and healthful site.
A subcontractor has no contractual rights against the Government upon the termination of a prime contract. A subcontractor may have rights against the Prime Contractor or ia higher-tier subcontractor with whom it has contracted. Upon termination of a prime contract, the Prime Contractor and each subcontractor are responsible for the prompt settlement of the settlement proposals of their immediate subcontractors.
For additional details regarding settlement agreements, see FAR Subpart 49.109 for Prime Contractors and FAR 49.108 for settlement of subcontract settlement proposals.
That’s it! You’ve just successfully finished your first Government contract for services. Now you’ve got experience, a new (and hopefully happy) Federal agency as a client, and confidence to continue pursuing more contracts and grow your space in the Federal marketplace. And not just winning a contract but understanding the process will show your commitment to serving your target client agencies and helping them be successful in their mission to provide products and services to the warfighter and/or the public.
.webp)
View related posts
What Does Nonstatutory Really Mean? (Weathering the RFO Series)
In my last article, I suggested that one of the biggest misconceptions surrounding the Revolutionary FAR Overhaul (RFO) is the idea that the FAR itself creates procurement policy. It doesn't. And if you are in GovCon, you should know that basic truth. Congress creates procurement policy. The FAR implements it. That distinction changes how we should think about the RFO. Instead of asking, "Why did they delete that?" I think we should first ask, "What purpose was that requirement serving?"
That brings us to one of the words that appears throughout the RFO.
Nonstatutory.
It sounds like a legal term. But in reality, it's become one of the most misunderstood words in the current conversation.
At first, I thought it was pretty straightforward. Like most people, the first time I read that the FAR Council intended to remove nonstatutory requirements from the FAR, my reaction was pretty simple. “That makes sense.” If Congress didn't require it, why should it stay? Then I caught myself. That question assumes something that isn't necessarily true. It assumes that if Congress didn't specifically require a procedure, the procedure probably isn't very important. After spending most of my career implementing procurement policy rather than simply reading it, I'm not sure that's always the right conclusion.
Let's Separate Those Two Very Different Questions
One of the things working as a Contracting Officer in Federal acquisition teaches you is that two questions can sound almost identical while leading to very different answers. And as Contracting Officers, we’ve been taught to pay attention to words and questions very carefully.
In this case, the first question is: Did Congress require this? That's a legal question.
The second question is: Why did this procedure exist? That's an acquisition question.
Sometimes the answer to both questions is the same.
Congress required it. Case closed.
But very often they aren't. And that comes out when you sit in a FAR policy working group meeting. You hear the discussion and debate over what Congress said is the law and the intent of that law, versus how we implement the law and ensure compliance with the law. In that room, the conversation always went back to…
--Congress established the objective and intent or outcomes.
--The FAR established the procedure with which to get there consistently and effectively across Government.
That's an important distinction.
Congress rarely tells Contracting Officers exactly how to conduct acquisition planning. Or exactly how to perform market research. Or exactly how to document a responsibility determination. Congress establishes policy. The FAR has historically translated that policy into repeatable acquisition practices. And for good reason. Left to their own devices, agencies have as many ways to do acquisition as the number of acquisition professionals they have on staff.
How FAR Actually Evolves
One thing I wish more people understood is that the FAR didn't appear one day as a finished document. It just evolved. Every acquisition professional has lived some part of that evolution.
--Congress passes legislation.
--The FAR Council implements it.
--GAO issues protest decisions that clarify how the rule should work.
--Courts interpret statutory authority.
--Inspectors General identify recurring weaknesses.
--Agencies develop better practices.
And eventually, some of those practices become regulatory language. Not because Congress required every sentence. Because the acquisition system learned something. That's why I hesitate whenever someone says, "It's only nonstatutory."
Maybe. (Insert my shoulders shrugging.) But that's not the whole story.
Think About It This Way
Imagine Congress passes a law requiring agencies to maximize practicable opportunities for small businesses. Congress doesn't necessarily prescribe every analytical step a Contracting Officer should take before deciding whether a procurement should be set aside.
But take that law, and if the FAR Council believes it should be incorporated into the regulation, it creates a FAR case and tasks one of two councils – the Civilian Agency Acquisition Council (CAAC) or the Defense Acquisition Regulations Council (DARC) – to proceed with FAR implementation.
Those entities lead and coordinate the writing of the FAR changes to include parameters and PROCESSES for implementation. These working groups of acquisition professionals from across government talk about how their interpretations and context can change based on the words used in writing the FAR changes. And that is why process and procedure start to become important. Context is everything. The words are chosen carefully and the decision to step through a procedure is not taken lightly.
Over time, once rules become final and their processes were implemented, those processes were then tied to other processes – existing, changing, and new – and then you get a series of procedures for things like market research (what determines its enough), acquisition planning (documenting the thought process behind the acquisition), bundling analyses (to ensure it can withstand scrutiny), and documenting acquisition decisions (to ensure the Government followed the process and procedures it said it would along with being compliant with the regulation and laws).
See how those processes and procedures help create consistency across government?
They are not the POLICY. They are how policy gets implemented. And that doesn't automatically mean every procedure put into action should remain forever. However, it does suggest we should understand what role processes and procedures have been playing before deciding they are no longer needed. Particularly with an acquisition workforce turned upside down through "The Fork" and DRP and people jumping ship. We don't have enough historical knowledge in place with those that remain with the requisite experience in making business decisions for the Government and its unquie considerations of public stewardship over profitability to "get it" without many of these processes and procedures still in place.
Was the point to clear the "old wood". I'm not naive enough to think that isn't the case. I most definitely was and is. But as we see -- pool liners, systems changes, running low on munitions, and a parasite causing real havoc all have real consequences.
This Isn't an Argument Against Simplification
Nothing here should be taken as an argument that every existing FAR provision deserves to stay. Frankly, it is the exact opposite. I've worked with the FAR long enough to know that it contains language that could be simplified, reorganized, or removed without affecting procurement outcomes. (How I wished I could have been part of the rewrite because I would have taken a few parts much further.)
The acquisition workforce has been asking for a more readable and user-friendly FAR for years. Industry also. In part, the RFO is responding to that need. And I think that part of the RFO is worthwhile.
But I go back to -- the question isn't whether simplification is good. The question is how we distinguish between simplifying regulations and simplifying implementation. They aren't always the same thing but those who have been sitting in policy while looking at work from on high often think they are. They don’t remember how process and procedure also drive faster and better decision-making along with more risk taking because a Contracting Officer can fall back on it.
The question I keep coming back to while reading the currently released FAR cases are the same ones over and over.
Now that “X” has disappeared, what function disappears with it?
Does that function still matter or has it moved somewhere else?
Will Contract Specialists and Contracting Officers still have the same tools available, and if not, how will agencies implement the statute consistently?
(Heck, we all know that agencies and even offices within agencies had a hard enough time WITH processes and procedures being consistent.)
But do you notice that's missing in those questions? I'm not asking whether the provision was statutory. I'm asking what it helped the acquisition workforce accomplish.
To me, that's the most useful conversation as these rules play out. It should be front of mind in our comments, too.
From the Contracting Officer's Chair
If someone had walked into my office twenty years ago and said, "Shauna, this requirement isn't statutory."
My next question probably would have been, "Okay...but why is it there?"
Not because I was defending regulations but because I was trying to understand whether removing that requirement would actually change how I approached an acquisition and create efficiencies. Should I push back and how far can I push the envelope? Or could I defend taking a different action yet still be compliant?
Some procedures existed because they genuinely improved decision-making. Others existed because they reflected old ways of doing business that no longer made sense. One of the responsibilities of a good Contracting Officer is learning to tell the difference.
I think understanding how to sort those out and not throw the baby out with the bathwater is exactly the responsibility we have as we evaluate the RFO as contracting professionals. We must be honest that, in many cases (and you know you did this) having process to fall back on actually helped with decision-making, efficiency, and consistency.
My Perspective
I’m interested in understanding the role that “requirement” played in the acquisition system, whether statutory or nonstatutory. Those two categories deserve very different conversations. Talking only about nonstatutory information that remains short-circuits the discussion we need to have. Statute tells us where a requirement came from, but experience helps us understand why it mattered. And why is might still be needed. I think we need both perspectives as we move forward reviewing proposed RFO changes.
What's Coming Next -- Article Three: If Congress Sets the Destination, Who Builds the Road?
One of the first places this conversation becomes very real is acquisition planning. The FAR has historically translated procurement objectives put in place by Congress into how we determine acquisition planning requirements. And that influences everything from competition to market research to small business participation.
Next, I’ll be talking about why acquisition planning became one of the foundations of federal procurement and what it means when many of those implementation details move from regulation to guidance…again, two very different things.
----------------------------------------------------------------------------------
Author: Shauna Weatherly, President, Federal Subcontract Solutions LLC (dba FedSubK). Shauna is a small business advocate and owner of FedSubK. FedSubK exists to simplify federal contracting, empowering small businesses with practical, understandable resources. We bring first-hand experiences in Federal contracting from multiple perspectives derived from roles held both in and out of Government over almost four decades of Federal service.
Visit us at fedsubk.com to learn more about--
Getting Started in Federal Contracting: fedsubk.com/begin-your-journey-here
Solutions and Our Trusted Support Provider Network: fedsubk.com/solutions-services
Insights from a Contracting Officer: fedsubk.com/insights
Free Webinars and Resources: fedsubk.com/webinars-training
The FAR Isn't Procurement Policy (Weathering the RFO Series)
Over the past several months, one question has followed me almost everywhere I've gone and on most every phone call.
"Shauna, what do you think about the Revolutionary FAR Overhaul?"
It's a fair question. And I don't answer it. At least not right away.
Instead, I usually ask a question of my own.
"Which part?" Then I wait, maybe shuffle around, and take a deep breath. The reason I ask – and display some body language that shows I’m anticipating the answer -- is because the Revolutionary FAR Overhaul isn't a single regulatory change. It's a fundamental reconsideration of how the Federal Acquisition Regulation should be organized, what belongs in it, and perhaps most importantly, what doesn't.
Depending on who you ask, it's “the most significant acquisition reform in decades”, a “risky departure from the procurement system we've relied on for more than forty years”, or a big “nothing-burger”. And I understand all of those perspectives.
And yes, I do occasionally shoot from the hip. But before I deciding whether I fully agree or disagree with any particular change (proposed or in progress), I want us all to go back to this one much simpler question:
What problem is the FAR Council trying to solve?
I've learned over the years that procurement regulations don't appear or disappear by accident. Some exist because Congress required them. Some were added after GAO decisions exposed weaknesses in the acquisition process. Others grew out of Inspector General findings or years of agencies wrestling with the same recurring problems. Some were brought about to force consistent behavior and interpretation. And yes, many stayed in the FAR long after anyone could clearly explain why they were still there -- except maybe someone like me who has been living the FAR since FASA and before.
The biggest challenge is knowing which is which. Which were put into place for what reason.
That's why I decided to write Weathering the RFO. Not because I think I already know all the answers. But because I think we're asking the wrong questions about where we go from here.
Let's Start in a Different Place
One thing I've noticed as I've listened to conversations about the RFO is that many of us instinctively started with the FAR itself. We started asking questions like:
-- "Why did they delete this section?"
-- "Why did they move this guidance?"
-- "Why are they shortening this part?"
Those are reasonable questions. I'm just not convinced they're the first questions we should ask anymore. So I think we should start somewhere else. And that place with with Congress.
-- Congress, not the FAR Council, establishes federal procurement policy.
-- Congress decided that agencies should maximize practicable opportunities for small businesses.
-- Congress established full and open competition as the standard for federal contracting unless a statutory exception applies.
-- Congress created procurement integrity requirements, commercial acquisition authorities, and the socioeconomic programs that have shaped today's procurement landscape.
The FAR Council nor the FAR itself created those policies. FAR is how the rules Congress creates are implemented. That distinction may sound subtle, but I believe it's the key to understanding the RFO. The RFO doesn't rewrite the Small Business Act, the Competition in Contracting Act, or the Office of Federal Procurement Policy Act....or any others. Those statutes remain exactly where they've always been without exceptions, short of an Executive Order. Instead, I'm hoping the FAR Council is asking a different question:
What's the best way to implement those laws through regulation?
Throughout the proposed rulemaking, the FAR Council explains that its objective is to retain statutory requirements and those necessary for sound procurement while removing or relocating other material that has accumulated in the FAR over time. That theme appears consistently throughout the initial set of proposed FAR cases and reflects the broader objective of simplifying the regulation without changing the underlying statutory framework.
Once I started looking at the RFO through that lens, the conversation changed for me. I stopped asking, "Why did they remove this?" And I started asking, "How will agencies accomplish the same objective now?"
To me, that's the more interesting and important question. Process edicts written into the FAR -- by design -- have led behavior of Contract Specialists and Contracting Officers for decades.
When process disappears overnight and leadership says "read all this great stuff we've given you to explain what we did", what leads and drives behavior then?
Why This Matters
One of the advantages of spending nearly four decades inside the Federal Government system and near all of that in acquisition is that you develop a healthy respect for unintended consequences. I've seen relatively small policy changes fundamentally reshape acquisition practices. I've also seen sweeping reforms generate months of debate before settling quietly into the background with very little long-term impact.
I’m taking a step back now and resisting the temptation to label the RFO either a success or a mistake before I talk and work through the changes made from the lens of the Contract Specialist, Contracting Officer, Chief of Contracting, COR, and Project Manager who has lived and been tasked with implementing and guiding others through major acquisition reforms over the years. I'm using careful analysis and the experience of decades of best practices, lessons learned, “wish I could haves”, ... thinking through it all with the patience and insight to how acquisition policy gets implemented and absorbed within the workforce, and their behavior as it drops and becomes part of the new normal.
This is the lens it deserves.
Oh, there will almost certainly be changes that I think are dumb, or overdue. There may be others that concern me from the position of a small business advocate. And there will probably be a lot that fall somewhere in between. That's because procurement has never been about absolutes. It's about balance.
Competition and efficiency.
Flexibility and consistency.
Innovation and oversight.
Speed and stewardship.
Those competing priorities have always defined federal acquisition, and they don't disappear simply because the FAR suddenly becomes a shorter version of its former self.
The Conversation I Hope We Can Have
If you're looking for someone to tell you the RFO is either the best thing that's happened to acquisition in decades or the worst, you probably won't find that here. That's not because I don't have opinions (because you know I do, if you’ve followed me for any length of time). Anyone who has spent a career in federal acquisition has opinions. It's because experience has taught me that good procurement decisions rarely begin with conclusions. They begin with understanding.
In each article in this series, I'm going to explore the questions I found myself asking as I read through the proposed rules.
-- What was Congress trying to accomplish?
-- What was the intent?
-- How has the FAR historically implemented that objective?
-- What is the FAR Council proposing to change?
-- Why does the Council believe the change is appropriate?
And perhaps -- most importantly --What might this mean for the people who actually have to use these regulations?
· The Contracting Specialists and Contracting Officers.
· The Program and Project Managers.
· The Small Businesses Specialists.
· Small and large businesses.
· The Agency and industry attorneys.
· The acquisition leaders at all levels in the organization, particularly those with front line responsibilities to guide the acquisition workforce daily.
This is important because procurement policy doesn't live in the Federal Register.
It lives in acquisition offices across the Government, where real people make real decisions every minute of every day as tax dollars fly out the door.
THAT....That....that's where the ground zero of the RFO is taking shape and will determine the future use and participation by industry.
From the Contracting Officer's Chair
As an acquisition leader, I rarely acted on the strong urge to switch courses immediately upon policy changes. I wanted to understand the problem that the law or rule or FAR was trying to solve. I always wanted to see how I could tie changes into my business decision-making and critical thinking process I was already using as a Contracting Officer very successfully.
How did it make my analysis and decision process more solid but still ease my burden?
Sometimes a new requirement looked unnecessary until I learned it had been added after a series of successful GAO protests. Sometimes a procedure that seemed cumbersome turned out to be the Government's best evidence that a statutory obligation had been met. And often enough, a change in the regulation or a new regulation over time become little more than institutional inertia. Then there are the ones that just are what they are and you suck it up and keep plowing forward.
The point is I learned not to judge a requirement by its age or by the number of pages it occupied in the FAR. I tried to first understand its purpose.
-- Looking at the big picture.
-- Looking at the small picture.
-- Looking at it from the lens of industry.
-- What could I learn from the change?
-- What did it do for the overall mission?
-- How did it support stewardship of taxpayer funds?
That's the mindset I'm bringing to this series.
My Perspective
As I finished reading the first group of proposed RFO rules, one thought stayed with me.
I don't think the most important question is whether the FAR becomes shorter.
I think the more important question is whether the acquisition workforce still has the tools it needs to faithfully carry out the procurement policies Congress established that form the foundation of the regulation itself.
Sometimes simplifying a regulation removes unnecessary burden. Sometimes it also removes a process that quietly helped agencies demonstrate compliance with the law. The challenge and the opportunity is knowing the difference.
That's the conversation I hope Weathering the RFO encourages. Not because I expect everyone to agree with my observations but because I think the acquisition community benefits when we take the time to understand not only what changed, but why it matters.
What is Coming Next -- Article Two: What Does "Nonstatutory" Really Mean?
One of the phrases that appears throughout the Revolutionary FAR Overhaul is nonstatutory requirements. Now at first glance, it seems self-explanatory, but I'm not sure it is.
In the next article, we'll unpack that phrase and explore why understanding it may be one of the keys to understanding the entire Revolutionary FAR Overhaul.
Watch for it here.
Author: Shauna Weatherly, President, Federal Subcontract Solutions LLC (dba FedSubK). Shauna is a small business advocate and owner of FedSubK. FedSubK exists to simplify federal contracting, empowering small businesses with practical, understandable resources. We bring first-hand experiences in Federal contracting from multiple perspectives derived from roles held both in and out of Government over almost four decades of Federal service.
Visit us at fedsubk.com to learn more about--
Getting Started in Federal Contracting: fedsubk.com/begin-your-journey-here
Solutions and Our Trusted Support Provider Network: fedsubk.com/solutions-services
Insights from a Contracting Officer: fedsubk.com/insights
Free Webinars and Resources: fedsubk.com/webinars-training
The FAR Overhaul: Long-Deferred Maintenance on the Government's Procurement Highway
If you’ve ever worked in federal procurement — as a contracting professional, program manager, small business, prime, sub, or advisor — you’ve probably had this moment:
You’re doing your best to follow the rules…and suddenly you hit a clause, a cross-reference, or a requirement that feels like it came out of nowhere.
That’s because the Federal Acquisition Regulation (FAR) isn’t just a set of rules. It’s a highway system. A massive, heavily traveled road network that’s been patched, expanded, and rerouted for decades — and in many areas, it’s operating with years of deferred maintenance.
Let’s talk about what that really means using the highway analogy to explain why the Revolutionary FAR Overhaul isn't as "revolutionary" as some might think.
The FAR is like a Well-Traveled Federal Highway
The FAR is the main road that nearly every federal acquisition travels on. And like any highway system:
- Everyone uses it
- Everyone depends on it
- And over time, it’s been modified in ways that made sense in the moment… but created complexity later
If you look at any highway on Google Maps it shows a rather clean route. FAR, we were taught, was set up to be the same way: requirements, procedures, clauses, and guidance. But once you’re actually “driving” that road? Well, you realize the terrain is full of twists and turns. It's more complicated than you realized.
Hidden Guardrails: The Rules You Don’t See Until You Need Them
Some of the FAR’s most critical compliance safeguards are like guardrails buried under weeds or snow. They’re there for a reason: to prevent waste, protect fairness, ensure accountability. But they’re not always easy to spot. In practice, you often discover them when someone asks:
“Did you document that?”
“Where’s your justification?”
“Why didn’t you compete this?”
“Which clause applies here?”
That’s when you realize the guardrails were present the whole time — just not visible.
Guardrails are added all the time or in the process of being fixed (via rulemaking). But all that construction can clog up traffic and make the time for arrival (contract award) continually recalculate.
Hazards & Risks: Potholes, Speed Traps, and Fog
Now add in the hazards:
- Potholes = ambiguity and unclear language
- Fog = inconsistent interpretation across offices and agencies
- Construction zones = evolving policy updates, executive orders, and new mandates
- Speed traps = protests, audits, IG scrutiny, and compliance reviews
And these hazards hit different people differently. The same stretch of FAR may feel smooth to one team and treacherous to another. That’s not because the people are bad at driving — it’s because the road is uneven.
Side Roads & Gray Areas: The Detours Everyone Knows About
Then there are the side roads. Some are official alternate routes: simplified acquisition procedures, flexibilities, exceptions, and FAR “shortcuts” that exist for good reasons. Those are the routes people take because they’ve always taken them. Indicators might be hearing yourself or your peer say --
“We’ve always done it this way.”
“That’s how the last CO handled it.”
“This should be faster.”
“It’ll probably be fine.”
Side roads aren’t automatically wrong. But they come with risks, Eventually someone asks, “Why did you go that way instead of the main route?”
Others are the gray areas -- the gravel roads and roads only the locals (experienced COs/KOs) know. Those routes have to be navigated very carefully and even the best driver can have issues even if there is less traffic. Many times they beat those on the highway to their destination, but it's only because they know where all the seen and unseen hazards are from their years driving that route.
So What Is the FAR Overhaul, Really?
Here’s the key point:
✅ It is NOT building a new road.
✅ It is NOT bulldozing the FAR and replacing it.
✅ It IS road maintenance -- the kind that should've been done years ago.
And when you have decades of deferred maintenance, it takes a lot of work to make that road appear to be what it was all along.
But that's not "revolutionary". That's finally doing the work you've been putting off because you couldn't get to it.
The County (in this case, the FAR Council, being the governing body over the FAR and its contents) could always do a little better job at maintenance than they do. But their budget and resources are low and their workload demands are very high (just take a look at the FAR Open Case Report). Sometimes it takes a new Sheriff In town (a new Administration) driving down the highway see what those too close to it should have been aware of all along. Layers upon layers of deferred maintenance.
The FAR Overhaul is best understood as freshening up the same highway.
- Clearing overgrowth = outdated and redundant material and non-regulatory clutter.
- Improving signage = clarity and usability.
- Standardizing merges and exits = better consistency and flow.
- Removing obsolete detours = non-regulatory clutter, outdated terminology, and rules that no longer serve their purpose.
And a bonus is the updated maps available for your travels (FAR Companion and Practitioner Albums)
The destination isn’t changing. But the route is FAR more functional -- see how I did that. ;)
Why This Metaphor Matters
When people hear the word “overhaul,” they often assume “Everything is changing.” But what this effort really signals is “We are fixing the road we’ve been driving on for decades.” That’s important because procurement has become more complex, acquisition timelines are under pressure, and both agencies and industry need guidance that is easier to understand, apply, and defend.
If the FAR Overhaul is the same old FAR highway with better pavement, clearer signs, fewer surprises, and, hopefully, less time lost in detours, fewer compliance collisions, and a smoother drive for everyone. The biggest difference is that now all travelers know what the locals knew all along. How to get from point A to point B in less time using an updated road system and map.
Safe travels on the FAR Highway in 2026!
The FAR Is a Highway System… and the Revolutionary FAR Overhaul Is Long-Overdue Road Work
