18.112
Letter contracts
Letter contracts enable immediate contract performance in urgent situations but must be formalized according to FAR 16.603 procedures.
Overview
FAR 18.112 addresses the use of letter contracts, which are authorized when there is an urgent need for contract performance to begin before all terms and conditions can be finalized. Letter contracts allow agencies to initiate work quickly in situations where delays would be detrimental, but they must be formalized according to the procedures outlined in FAR 16.603. This section highlights the flexibility available to contracting officers in urgent or emergency acquisition scenarios.
Key Rules
- Use of Letter Contracts
- Letter contracts are permitted when immediate contract performance is necessary and there is insufficient time to negotiate a definitive contract.
- Reference to FAR 16.603
- The procedures and limitations for issuing letter contracts are detailed in FAR 16.603, which must be followed.
Responsibilities
- Contracting Officers: Must determine the necessity for immediate performance, issue letter contracts only when justified, and ensure compliance with FAR 16.603 procedures.
- Contractors: Must begin performance as directed under the letter contract and comply with subsequent definitization requirements.
- Agencies: Should monitor the use of letter contracts to ensure they are justified and properly transitioned to definitive contracts.
Practical Implications
- This section exists to provide acquisition flexibility in urgent situations where delays could harm government interests.
- It impacts daily contracting by allowing work to start quickly, but requires careful management to avoid risks associated with incomplete contract terms.
- Common pitfalls include failure to definitize the contract in a timely manner or misuse of letter contracts for convenience rather than necessity.