13.004 Legal effect of quotations
Source: FAR 13.004 on acquisition.gov
A supplier's quotation is not a binding offer; a contract is only formed when the supplier accepts the Government's order, and the Government can withdraw or amend its offer before acceptance.
Overview
FAR 13.004 clarifies the legal status of quotations in the simplified acquisition process. It establishes that a supplier's quotation is not a binding offer, and the Government's issuance of an order in response to a quotation is considered an offer to buy, not the formation of a contract. A contract is only formed when the supplier accepts the Government's offer, either by written notification, delivery of goods or services, or substantial performance. The regulation also allows the Government to withdraw, amend, or cancel its offer at any time before the supplier's acceptance, providing flexibility in the procurement process. Contracting officers are encouraged to obtain written acceptance when appropriate, but acceptance can also be demonstrated through performance.
(a) A quotation is not an offer and, consequently, cannot be accepted by the Government to form a binding contract. Therefore, issuance by the Government of an order in response to a supplier’s quotation does not establish a contract. The order is an offer by the Government to the supplier to buy certain supplies or services upon specified terms and conditions. A contract is established when the supplier accepts the offer.
(b) When appropriate, the contracting officer may ask the supplier to indicate acceptance of an order by notification to the Government, preferably in writing, as defined at 2.101. In other circumstances, the supplier may indicate acceptance by furnishing the supplies or services ordered or by proceeding with the work to the point where substantial performance has occurred.
(c) If the Government issues an order resulting from a quotation, the Government may (by written notice to the supplier, at any time before acceptance occurs) withdraw, amend, or cancel its offer. (See 13.302-4 for procedures on termination or cancellation of purchase orders.)