Contracting Cone
FAR Based Strategies
Federal Supply Schedules – FAR 8.4
Commercial Items – FAR 12
Simplified Acquisitions – FAR 13
Contracting by Negotiation – FAR 15
IDIQ – FAR 16.5
Letter Contract – FAR 16.603
Agreements – FAR 16.7
Small Business – FAR 19
BAA – FAR 35.016
SBIR/STTR
Defense CSO Pilot Program
Non-FAR Based Strategies
Other Transactions (OT)
Procurement for Experimental
R&D Agreements
Letter Contract – FAR Part 16.603
Letter contracts, also known as Undefinitized Contract Actions (UCA), are a means 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 start 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
References
- FAR Part 16.603 – Letter Contracts
- DFARS Part 216.603 – Letter Contracts
- Air Force Letter Contract SOW Template
- Letter Contracts, Defense Contingency Contracting Handbook – Defense Pricing and Contracting