government contracts

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The United States Government is the single largest procurer of goods and services in the world, and the Department of Defense (DOD) accounts for the lion’s share of federal acquisitions. Regulations involving government contracts are found on Acquisitions.gov

Three major characteristics distinguish Government acquisitions from private sector contracts:

  1. Government contracts are subject to a myriad of statutes, regulations, and policies which encourage competition to the maximum extent practicable, ensure proper spending of taxpayer money, and advance socioeconomic goals.
  2. Government contracts contain mandatory clauses which afford the Government special contractual rights, the most important of these being the Changes clause, the Termination for Convenience clause, and the Default clause. These clauses give the government the right to unilaterally change contract terms and conditions or terminate the contract. 
  3. Due to the Government’s special status as a sovereign entity, claims and litigation resulting from the government contract follow the unique procedures of the Contract Disputes Act

All government contracts are subject to the Federal Acquisition Streamlining Act which encourages the government to purchase already existing products rather than commission their own government exclusive goods when possible. Additionally, all government contracts are subject to the Federal Acquisition Regulation (FAR), which is codified in Parts 1 through 53 of Title 48, Chapter 1 of the Code of Federal Regulations. The FAR is amended pursuant to the Administrative Procedure Act, with proposed changes issued jointly by the DOD, the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA), in coordination with the FAR Council. In addition to the FAR, executive branch agencies may issue their own supplemental regulations such as the Defense Federal Acquisition Regulation Supplement (DFARS). 

Only contracting officers have the authority to contractually bind the United States Government. This authority is vested in the executive agency, which then delegates this authority by issuing a certificate of appointment or “warrant.” The warrant provides authority to bind the government up to a specified amount of money. As a result, contracting officers have the authority to award, administer, and terminate Government contracts. 

Government contract claims are subject to the Contract Disputes Act, which requires the claim to be presented first to the contracting officer.  After the Contracting Officer’s Final Decision, the claim may be appealed to either the United States Court of Federal Claims (CFC) or to one of the Boards of Contract Appeals. After either venue, the claim may be appealed to the United States Court of Appeals for the Federal Circuit, and finally to the Supreme Court. The General Accountability Office (GAO) has the authority to hear bid protests, which are challenges to an award, proposed award, or terms of a solicitation of a federal contract.

Government contract claims are subject to the Contract Disputes Act, which requires the claim to be presented first to the contracting officer.  After the Contracting Officer’s Final Decision, the claim may be appealed to either the United States Court of Federal Claims (CFC) or to one of the Boards of Contract Appeals. After either venue, the claim may be appealed to the United States Court of Appeals for the Federal Circuit, and finally to the Supreme Court. The General Accountability Office (GAO) has the authority to hear bid protests, which are challenges to an award, proposed award, or terms of a solicitation of a federal contract.

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[Last updated in January of 2023 by the Wex Definitions Team