Modular contracting
Modular contracting breaks IT acquisitions into manageable, independent increments to reduce risk, improve performance, and keep pace with technology changes.
Overview
FAR 39.103 establishes the principles and requirements for modular contracting in the acquisition of information technology (IT) systems. Modular contracting is designed to reduce program risk, incentivize contractor performance, and provide the government with timely access to evolving technology. Agencies are encouraged to use modular contracting for both major and non-major IT systems, breaking acquisitions into manageable increments that can be delivered, implemented, and tested independently. Each increment should comply with IT standards and agency architecture, and contracting officers must select appropriate contract types and methods to facilitate future increments without obligating the government to additional purchases. The regulation also sets recommended timelines for contract award and delivery to avoid technology obsolescence.
Key Rules
- Use of Modular Contracting
- Agencies should use modular contracting for major and non-major IT systems to reduce risk and improve outcomes.
- Incremental Acquisition
- IT systems may be acquired in smaller, manageable increments, each capable of independent operation and delivery.
- Standards and Architecture Compliance
- Each increment should comply with commercial IT standards and the agency’s IT architecture.
- Contracting Techniques
- Contracting officers must select contract types and methods that support future increments and avoid obligating the government to additional purchases.
- Timeliness
- Contracts should be awarded within 180 days of solicitation, and deliveries should occur within 18 months to prevent obsolescence.
Responsibilities
- Contracting Officers: Structure contracts to support modular increments, select appropriate contract types, and adhere to timelines.
- Contractors: Deliver workable, independent increments that comply with standards and agency architecture.
- Agencies: Oversee compliance with modular contracting principles and consider cancellation if timelines are not met.
Practical Implications
- Modular contracting helps manage risk and adapt to technological changes in IT acquisitions.
- It requires careful planning, contract structuring, and adherence to timelines to ensure successful implementation.
- Common pitfalls include failing to structure increments for independence, not complying with standards, or missing award/delivery timelines.