32.705 Unenforceability of Unauthorized Obligations
Source: FAR 32.705 on acquisition.gov
Contracting professionals must ensure that supplier license agreements do not impose unauthorized obligations on the Government, especially indemnification clauses that could violate the Anti-Deficiency Act.
Overview
FAR 32.705 addresses the unenforceability of unauthorized obligations that may arise from supplier license agreements, particularly in the context of information technology acquisitions. The regulation highlights that many supplies and services, such as software and web services, are delivered under license agreements like End User License Agreements (EULAs) or Terms of Service (TOS). These agreements often contain indemnification clauses or other terms that are inconsistent with Federal law and, if accepted by the Government, could violate the Anti-Deficiency Act. The section serves as a warning to contracting professionals to be vigilant about the terms in supplier agreements and to avoid accepting obligations that the Government is not authorized to undertake.
Many supplies or services are acquired subject to supplier license agreements. These are particularly common in information technology acquisitions, but they may apply to any supply or service. For example, computer software and services delivered through the internet (web services) are often subject to license agreements, referred to as End User License Agreements (EULA), Terms of Service (TOS), or other similar legal instruments or agreements. Many of these agreements contain indemnification clauses that are inconsistent with Federal law and unenforceable, but which could create a violation of the Anti-Deficiency Act (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section1341&num=0&edition=prelim" target="_blank">31 U.S.C. 1341) if agreed to by the Government.