If you are new to the government contracting world you have probably heard the acronym FAR thrown around quite a bit. If you are wondering what it is, who it’s for, and what it covers, then you have come to the right place. In this document we’ll cover the basics of the FAR and what you need to know as you engage in government contracts.
What is it?
To ensure that all Government purchases via contract are uniform and fair, a system of policies and procedures is put in place that nearly all government agencies are required to comply with. This system is known as the Federal Acquisition Regulations System (FAR). The FAR is basically a guideline that protects (clauses and forms) and directs (requirements and rules) contractors and contractees as they engage in work.
The FAR’s guiding principals are centralized around the effort to satisfy customer’s needs in terms of cost, quality, and timeliness; minimize administrative operating costs; conduct business with integrity, fairness, and openness; and fulfill other public policy objectives.
Who uses it?
The FAR governs most contracts with the Federal Government. The contractee (Government Agency) will specify the FAR provisions that are applicable to the contract and it is then the contractor’s job to comply with the provisions, demonstrate that they will be able to comply with the provisions at the time of award, or claim exemption from the provisions (ex. Cost Accounting Standards Exemptions).
The FAR is applicable when a contractor responds to a solicitation (IFB, RFP, RFQ, RFI), a contractor receives a federal prime contract, a contractor receives a subcontract under a federal prime contract, or a contractor issues a subcontract under a federal prime contract. When the FAR is applicable, it is the responsibility of the contractor to read and understand the provisions within the contract before signing. It is important to note that most Government Agencies have developed additions to the FAR that are specific to contracts issued out of those agencies. As a contractor you are required to comply with the Agency Supplemental regulations as well as the FAR, but no Agency Supplemental regulations can override the FAR.
What does it cover?
The FAR is organized into 8 subchapters, A through H, which contains 52 parts that cover everything from general information to clauses and forms. The most heavily regulated aspect of acquisition is contract pricing. The FAR addresses contract pricing throughout its entirety, but especially in Subpart 15.4, Parts 30 and 31, and Subparts 42.7, 42.8, and 42.17. Another large section of the FAR is Subchapter D: Socioeconomic Programs, which covers various small business programs, purchases from foreign sources, and laws written to protect those working under government contracts. While it is important to comply with and understand the FAR as a whole, it is paramount to be thoroughly knowledgeable in Parts 31 – Contract Cost Principals and Procedures, and 52 – Solicitation Provisions and Contract Clauses. A comprehensive understanding of these sections will ensure that you are able to correctly allocate and record costs and abide by all contract provisions.
Staying compliant with Deltek
The best way to ensure your organization is compliant with all FAR provisions is to use an accounting system that was made exactly for Government Contracts. Deltek software is built from the ground up to be compliant and handle even your most complex government-required tasks. Deltek understands the demands on contractors, and for the past 30+ years has delivered software that allows them to comply with all FAR and Agency Supplemental provisions.
If you are looking for accounting software that will satisfy your FAR requirements while saving you time, money, and resources, please reach out to us for more information. Let our experts help you find the right fit for your needs.