The Federal Acquisition Regulation (“FAR”) is found in Title 48 of the Code of Federal Regulations. It consists of 37 chapters (Chapter 1, some 2,000 pages or more, which applies to all agencies, and then various agency supplements plus Cost Accounting Standards). In total, the FAR has thousands of pages. Are all the relevant parts of the FAR incorporated into your government contract? The simple answer is “NO”, but first a bit of history.
A recent case from the Court of Federal Claims, James M. Fogg Farms, Inc. v. United States, No. 17-188C (Fed. Cl. Sept. 27, 2017), considered a similar issue. The question in Fogg was whether federal statutes (specifically, an Agriculture Conservation Program in the Farm Bill, Title 16 of the US Code) were incorporated into their contract with the Department of Agriculture for that specific program, and whether the government had breached that term. at law The Court held that there was no specific term in its contract that gave rise to Fogg’s claim of breach and ruled against Fogg. The Court further explained that it is “reluctant to find statutory or regulatory provisions to be incorporated into a government contract unless the contract explicitly provides for their incorporation,” citing St. Christopher Assocs., LP v. United States, 511 F. 3d 1376, 1384 (Fed. Cir. 2008), further citing Smithson v. United States, 847 F. 2d 791, 794 (Fed. Cir. 1988). Both Federal Circuit cases make it clear that the full incorporation of regulations into a contract could allow a contracting party to choose among many regulations as to a particular cause of action, rather than the specific requirements in the actual contract.
So what exactly are FARs and when are they incorporated (or part of them) into a government contract? FAR 1.101 says that
The system of Federal Acquisition Regulations is established for the codification and publication of uniform policies and procedures for acquisition by all executive agencies. The System of Federal Acquisition Regulations consists of the Federal Acquisition Regulations (FAR), which is the primary document, and agency acquisition regulations that implement or supplement the FAR.
FAR 2.101 also states that “Acquisition” means the contractual acquisition with appropriate funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services already exist or must be created, developed, demonstrated and evaluated.
You can look all over the FARs, but you won’t find anything indicating that the FARs are incorporated into government contracts as a whole. See Edwards & Nash, “The FAR: Does It Have Contractual Force and Effect?” 31 Nash & Cibinic NL Report ¶10 (February 2017). The court cases (and this article by Edwards and Nash) make it clear that in order for a specific FAR sentence or section to be included in your contract, the contract must either explicitly state it or be incorporated by reference.
There are certain clauses that incorporate a FAR section by reference. For example, the clause on “Allowable cost and payment” states:
Payments shall be made by the Government to the Contractor…in amounts determined to be allowable…in accordance with the Federal Acquisition Regulations (FAR) subpart 31.2 in effect on the date of this contract and the terms of this contract.
FAR 52.216-7, Payment and allowable cost. This cause has explicitly incorporated FAR subpart 31.2 into the contract, in addition to the contract-specific terms written in the contract.
The bottom line is simple: a contractor’s (and the government’s) obligations must be set forth in the contract, either by explicit language or incorporation by reference (as in FAR 52.216-7 above). Nothing in the FAR magically “appears in” or is “included” in your contract because it is in the FAR or US Code. If the Government wants to incorporate a section of the FAR into your contract, the Contracting Officer knows (or should know) exactly how to do it.
The only possible exception is the “Christian Doctrine”. Under Christian Doctrine, a contract will be construed to include a required clause even if it is not physically incorporated into the document. GL Christian and Associates. v. United States, 312 F.2d 418, reh’g denied, 320 F.2d 345 (Ct. Cl. 1963), cert. denied, 375 US 954 (1963). The doctrine allows for the full incorporation of mandatory contractual clauses that express a significant or deeply rooted current of public procurement policy. In the landmark Christian case, which dealt with the termination clause for convenience, the court found that the purpose and effects of the clause were a “deep-seated strand of public procurement policy” and a “principle of government” , therefore requiring its incorporation into a contract despite the fact that it was omitted from the text. Id. at 426. However, the Christian Doctrine is limited to those types of clauses, not the many common government contract clauses found in FAR Part 52 that are not mandatory clauses, deeply entrenched strands of contracting policy. public policy or important principles of government. In fact, courts and boards have never identified all of the FAR clauses that the Christian Doctrine would incorporate into a contract. We do know, however, that the termination clause for convenience is one of them, and there are a small number of others that have been considered on a case-by-case basis for inclusion in Christian Doctrine.
Copyright 2017 Richard D. Lieberman