3.602
Exceptions
Exceptions to the prohibition on contracting with Government employees or their organizations require high-level approval and must be justified by the most compelling reasons.
Overview
FAR 3.602 outlines the process for granting exceptions to the prohibition on contracting with Government employees or organizations owned or controlled by them, as established in FAR 3.601. An exception can only be authorized by the agency head or a designee at a high level (not below the head of the contracting activity), and only for the most compelling reasons—such as when the Government’s requirements cannot reasonably be met otherwise. This ensures that exceptions are rare and subject to strict oversight, maintaining the integrity of the procurement process while allowing flexibility in extraordinary circumstances.
Key Rules
- Authority to Grant Exceptions
- Only the agency head or a designee not below the head of the contracting activity may authorize an exception.
- Compelling Reason Requirement
- Exceptions are permitted only for the most compelling reasons, such as when no other reasonable means exist to meet the Government’s needs.
Responsibilities
- Contracting Officers: Must seek approval from the appropriate authority before proceeding with a contract that would otherwise be prohibited under FAR 3.601.
- Contractors: Should not expect exceptions unless a compelling justification exists and must cooperate with any review or approval process.
- Agencies: Must ensure that any exception is justified, documented, and approved at the appropriate level.
Practical Implications
- This section exists to provide a narrowly tailored escape clause for situations where strict adherence to the prohibition would harm the Government’s interests.
- It impacts contracting by requiring high-level scrutiny and justification for any exception, reducing the risk of conflicts of interest.
- Common pitfalls include insufficient justification or failure to obtain the proper level of approval.