Who Makes The Rules For Federal Acquisitions?

"Pay no attention to the man behind the curtain"

-Wizard of Oz

In 2018, there were roughly 2.8 private-sector contract employees doing government work for every one federal employee¹. It turns out, a lot of the work of government is done by private sector contractors, and the way those contracts are managed and awarded ends up having a huge impact on quality of life for the average American. In this article, we are going to explore who manages rules and regulations around U.S Government contracts, and how those rules are made.

Currently, the closest thing to a single source of truth for federal-level contract procurement rules and regulations is the Federal Acquisition Regulation (FAR). FAR is the set of rules that lays the groundwork for how agencies of the Federal Government can bid out work to private sector entities. Its’ primary objective is “to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives”². The customer–in the above case–being the government agency that is bidding out the contract. With a small number of exceptions, most federal government agencies are subject to the rules of the FAR³. For those that aren’t strictly limited to the FAR, a modified version of the FAR is generally used.

The FAR’s mandate is broad. Federal agencies must apply FAR protocols to the procurement of any good or service provided by a non-government entity⁴. The small subset of acquisitions not covered by FAR tend to be purchases of land by the government, and research and development grants.

Though nearly all⁵ executive agencies⁶ are affected by the FAR, only a few agencies are tasked with administering and updating it. The FAR is jointly issued by the Department Of Defense (DoD), General Services Administration (GSA), and NASA⁷. Each of these departments may suggest edits to existing protocols, which will first get reviewed by the Office Of Management And Budget (OMB)⁸, and then get released for public comment. After the public has commented, rules may be changed or modified, at which point a final version of the rule is produced, and that final rule is reviewed by congress and either approved or rejected⁹.

FAR regulations are executed by the appropriations team at each executive agency. Usually, a head of appropriations will be appointed at each executive department, who is put in charge of an acquisitions team. The job of the acquisitions’ team is to use the FAR protocols to procure work from contractor agencies. At intervals, an internal auditing unit, or an agency like the Government Accountability Office (GAO), will engage in oversight of a departments’ process, to make sure the FAR is being adhered to.

Though there are many steps along the way to create or modify acquisition rules in America, the government has made the process clear and consistent. Unfortunately, that high level and clarity has not translated into a high success-rate. In a series of follow up articles, we will discuss some consequences of the current acquisitions framework, and some possible areas of improvement.