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. Three major characteristics distinguish Government acquisitions from private sector contracts. First, Government contracts are subject to myriad statutes, regulations, and policies which encourage competition to the maximum extent practicable, ensure proper spending of taxpayer money, and advance socioeconomic goals. Second, Government contracts contain mandatory clauses which afford the Government special contractual rights, including the right to unilaterally change contract terms and conditions or terminate the contract. The most important clauses are the “Changes” clause, the “Termination for Convenience” clause, and the “Default” clause. Third, due to the Government’s special status as a sovereign entity, claims and litigation follow the unique procedures of the Contract Disputes Act.
Government contracts are subject to several statutes, including the Competition in Contracting Act and the Federal Acquisition Streamlining Act. In addition to statutes, there are a multitude of regulations which govern acquisitions by executive branch agencies. Foremost among these is the Federal Acquisition Regulation (FAR), which is codified in Parts 1 through 53 of Title 48, Chapter 1 of the Code of Federal Regulations. Executive branch agencies may issue their own regulatory supplements to the FAR, such as the Defense Federal Acquisition Regulation Supplement (DFARS). 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.
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 signature authority up to a specified amount of money, or it can be an unlimited warrant. 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.