Contracting Cone
FAR Based Strategies
Federal Supply Schedules
Commercial Items
Simplified Acquisitions
Contracting by Negotiation
IDIQ
Letter Contracts
Agreements
Small Business
Broad Agency Announcement
Commercial Solutions Opening
Statutory Strategies
SBIR/STTR
Other Transactions
Procurement for Experiments
R&D Agreements
Cooperative R&D Agreement
Partnership Intermediary Agreement
Technology Investment Agreement
Letter Contracts (FAR 16.603)
Letter contracts, also known as Undefinitized Contract Actions (UCAs), are a mechanism to authorize a contractor to immediately begin delivering supplies or performing services before the terms and conditions of the contract can be agreed upon. This strategy is used only when negotiating a definitive contract is not possible in sufficient time to meet the requirement, and the Government’s interest demands that the contractor begin work immediately.
Common Applications
- Supplies, products, or services used in support of a contingency operation or humanitarian/peacekeeping operation.
Pros |
Cons |
Provides opportunity to rapidly meet urgent mission requirements | Undefined terms and conditions and limited ability to control cost increases risk to the Government |
Letter Contract/UCA procedures reduce time to execute for an immediate authority to proceed | Reporting requirements increases burden on program office and contracting activity |
Initial proposals may not meet government standards resulting in prolonged negotiations increasing risk to definitization schedule | |
Elevated level of approvals and government oversight and increases burden on program office and contracting activity |
Restrictions
- Requires statement of urgency from requiring organization
- May be used only after the head of the contracting activity or a designee determines in writing that no other contract is suitable
- May not commit the government to a definitive contract in excess of the funds available at the time the letter contract is executed;
- May not be entered into without competition when competition is required by FAR Part 6
- May not be amended to satisfy a new requirement unless that requirement is inseparable from the existing letter contract
- Must be definitized by 180 days or before completion of 40% of work
Resources
- FAR Part 6 Competition Requirements
- FAR 16.603 Letter Contracts
- DFARS 216.603 Letter Contracts
- DFARS 217.74 Undefinitized Contract Actions
- DFARS PGI 217.74 Undefinitzed Contract Actions
- Determination to Use Undefinized Contract Action (UCA) Template, Defense Pricing and Contracting
- DODIG-2020-084: Audit of Miliatry Department Management of Undefinitized Contract Actions, DoD IG, May 2020
- A UCA by Any Other Name…Defining Unpriced Contract Action and Undefinitized Contract Action, Defense Acquistion University, Oct 2019