Subpart 16.7
Agreements
FAR Subpart 16.7 establishes the framework for using basic agreements and basic ordering agreements to streamline future contracting actions without creating binding contracts until orders or contracts are issued.
Overview
FAR Subpart 16.7 covers the use of agreements in federal contracting, specifically addressing basic agreements and basic ordering agreements. This subpart outlines the definitions, purposes, and procedures for establishing these agreements, which are not contracts themselves but set terms and conditions for future contracts or orders. The subpart is organized into three main sections: 16.701 (Scope), 16.702 (Basic agreements), and 16.703 (Basic ordering agreements). These agreements are designed to streamline the contracting process for recurring requirements or when specific terms are not yet known, providing a framework for future negotiations and contract awards.
Key Rules
- Scope (16.701)
- Defines the applicability and limitations of agreements under this subpart.
- Basic Agreements (16.702)
- Establishes procedures for creating basic agreements, which outline terms for future contracts but do not obligate funds or require performance until a contract is issued.
- Basic Ordering Agreements (16.703)
- Details the use of basic ordering agreements (BOAs), which provide a framework for issuing future orders when quantities and delivery schedules are not yet determined.
Responsibilities
- Contracting Officers: Must ensure agreements comply with FAR requirements, are properly documented, and are not used to circumvent competition or contract formation rules.
- Contractors: Should understand the non-binding nature of agreements and be prepared to negotiate specific terms for each contract or order issued under an agreement.
- Agencies: Responsible for oversight, ensuring agreements are used appropriately and do not replace proper contracting procedures.
Practical Implications
- This subpart exists to facilitate efficient procurement for recurring or undefined requirements.
- It impacts daily contracting by providing a mechanism to pre-negotiate terms, reducing administrative burden for future contracts or orders.
- Common pitfalls include misunderstanding the non-contractual nature of agreements and improper use to avoid competition or required contract formation steps.