15.407-2
Make-or-buy programs
FAR 15.407-2 requires detailed make-or-buy program submissions for certain large negotiated contracts to ensure cost control, risk management, and support for government policies.
Overview
FAR 15.407-2 outlines the requirements and procedures for make-or-buy programs in negotiated government acquisitions. These programs require prime contractors to identify which major items or work efforts will be produced in-house (make) versus subcontracted (buy), supporting the Government’s goals of cost control, risk management, and socioeconomic policy implementation. The regulation details when make-or-buy programs are required, what information must be included, how they are evaluated, and how they may be incorporated into contracts.
Key Rules
- Applicability and Thresholds
- Make-or-buy programs may be required for negotiated acquisitions requiring certified cost or pricing data valued at $15 million or more, with some exceptions for R&D contracts.
- Solicitation and Submission Requirements
- Solicitations must specify when a make-or-buy program is required and what supporting information must be submitted with the offer.
- Program Content
- Contractors must provide detailed information on major items or work efforts, including categorization, rationale, facility locations, subcontractor details, and recommendations for deferred decisions.
- Evaluation and Negotiation
- Contracting officers must evaluate and negotiate make-or-buy programs before contract award and may incorporate them into the contract, especially for major systems or when technical/cost risks warrant oversight.
Responsibilities
- Contracting Officers: Determine when make-or-buy programs are required, evaluate submissions, negotiate terms, and incorporate programs into contracts as appropriate.
- Contractors: Prepare and submit comprehensive make-or-buy programs with required details, justify decisions, and comply with any incorporated program requirements.
- Agencies: Oversee compliance and ensure programs align with cost, technical, and socioeconomic objectives.
Practical Implications
- Make-or-buy programs help the Government ensure reasonable pricing, manage technical risk, and support small business and socioeconomic goals. Contractors must be prepared to justify their sourcing decisions and provide detailed documentation. Failure to comply can delay contract awards or result in unfavorable contract terms.