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What is the Federal Acquisition Regulation?

By Dave Fidlin
Updated May 17, 2024
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Established by the US federal government, the Federal Acquisition Regulation (FAR) is a complex set of guidelines for business owners looking to expand into the federal marketplace. The lengthy document touches on a number of issues, including government contracts, the code of federal regulations, government procurement and the acquisition process. Government officials enacted the regulation to ensure purchasing procedures were conducted in a standard, consistent, fair and impartial manner.

The Federal Acquisition Regulation is in place because US government contracts differ from the commercial contracts on which business owners more frequently bid. It was drafted with the intent of incorporating individual agency regulations into one comprehensive document. Variations between the government and commercial contracts include the requirements for changing the scope of work; procedures for making payments; how to conduct inspections and testing; when terminating contracts is permissible; and how delivered goods and services should be accepted.

In all, guidelines within the Federal Acquisition Regulation are divided into 53 parts. The entire document entails eight subheads: a general overview; competition and acquisition planning; contracting methods and contract types; socioeconomic programs; general contracting requirements; special categories of contracting; contract management; and a section on clauses and forms. An overarching theme throughout the document is contract pricing, which is heavily regulated in the government sector.

One distinguishing factor between government and commercial contracts is the manner employment regulations are carried out. In the government arena, federal contractors are required to closely cover a number of specific employment and labor laws that are enforced through the U.S. Department of Labor's Office of Federal Contract Compliance Programs. One such provision includes following the Vietnam Era Veterans' Readjustment Assistance Act of 1974. Federal contractors are required to annually furnish a list of veterans who have been hired.

Other laws that are incorporated into Federal Acquisition Regulation include the Drug-Free Workplace Act of 1988 and a pledge to follow through with terms set forth by the U.S. Wage and Hour Division within the Department of Labor. A federal contractor is required to provide a drug-free workplace, and federal laws concerning wage standards need to be upheld throughout the duration of a contract.

A number of resources can be found online to provide more detailed information about the Federal Acquisition Regulation, including the websites of the U.S. Small Business Administration, U.S. General Services Administration and the Association of Procurement Technical Assistance Centers. Websites from these organizations and agencies provide information for small business owners new to government contracting procedures.

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Discussion Comments
By JaneAir — On Oct 12, 2011

@strawCake - It does sound convenient to have all that information in one place. However, the Federal Acquisition Regulation is a very large document. As the article says, it has 53 parts!

I'm not sure how many actual pages that is, but it's probably a lot! I actually did a little bit more reading about this thing, and not everyone thinks it's so great.

Some people think this set of regulations is so complicated that small businesses get discouraged and don't compete for government contracts. I'm not sure how true that is, but the idea is definitely out there.

By strawCake — On Oct 11, 2011

It's really interesting when you think about it, but the government is like a business in some respects. It purchases good and services from tons of businesses and contractors.

I know that it's very lucrative, but complicated, contract with the government. I think it makes a lot of sense to spell out all the regulations in one place.

Especially since government contracts are so different than commercial contracts. I imagine it would probably be very difficult for a business to secure their first government contract for this reason.

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