The Federal Procurement Regulations (“FAR”) are found in Title 48 of the Code of Federal Regulations. It consists of 37 chapters (Chapter 1, over 2000 pages, which applies to all agencies, then various agency supplements plus the Cost Accounting Standards). In total, the FAR has thousands of pages. Are all relevant parts of the FAR incorporated into your contract with the government? The simple answer is “NO”, but first a bit of background.
A recent Federal Claims Court case, James M. Fogg Farms, Inc. v. United States, No. 17-188C (Fed. Cl. September 27, 2017), considered a similar issue. The question in Fogg was whether federal statutes (specifically, an Agricultural Conservation Program in the Farm Bill, title 16 of the U.S. Code) were incorporated into his contract with the Department of Agriculture for that specific program, and if the government had breached that term. In the law. The Court held that there was no specific term in his contract that gave rise to Fogg’s claim of default, and ruled against Fogg. The Court further explained that it is “reluctant to find that statutory or regulatory provisions are 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 from many regulations regarding a particular cause of action, rather than the specific requirements in the actual contract.
So what exactly is the FAR and when is it incorporated (or part of it) into a government contract? FAR 1.101 says that
The Federal Procurement Regulations system is established for the codification and publication of uniform policies and procedures for procurement by all executive agencies. The Federal Procurement Regulation System consists of the Federal Procurement Regulation (FAR), which is the main document, and agency procurement regulations that implement or supplement the FAR.
FAR 2.101 also establishes that “Acquisition” means the acquisition by contract 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 everywhere in the FAR, but you won’t find anything to indicate that the FAR is embedded in 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 clear that for a specific FAR sentence or section to be included in your contract, the contract must 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:
The Government will make payments to the Contractor … in amounts determined as permissible … in accordance with Subpart 31.2 of the Federal Procurement Regulations (FAR) in effect on the date of this contract and the terms of this contract.
FAR 52.216-7, Allowable Cost and Payment. This cause has explicitly incorporated FAR subpart 31.2 into the contract, in addition to the specific contract terms written in the contract.
The bottom line is simple: the obligations of a contractor (and the Government) must be set out in the contract, either through 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 in the United States Code. If the Government wants to incorporate a section of the FAR into its 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 read to include a required clause even though it is not physically incorporated into the document. GL Christian & Assocs. v. United States, 312 F.2d 418, denied, 320 F.2d 345 (Ct. Cl. 1963), cert. denied, 375 US 954 (1963). The doctrine allows the incorporation by application of the law of mandatory contractual clauses that express a significant or deeply rooted aspect of the public procurement policy. In the landmark Christian case, which dealt with the termination clause for convenience, the court concluded that the purpose and effects of the clause were a “deeply ingrained aspect of public procurement policy” and a “fundamental principle of government.” , for which incorporation into a contract was required even though it was omitted from the text. Id. At 426. However, Christian Doctrine is limited to those types of clauses, not the many ordinary government contract clauses found in FAR Part 52 that are not mandatory clauses, deeply ingrained strands of hiring policy. public or important principles of government. In fact, courts and boards have never identified all the FAR clauses that Christian Doctrine would incorporate into a contract. However, we do know 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