Defense Federal Acquisition Regulation Supplement (DFARS)

Federal Acquisition Regulations System

Establishes the DFARS as the DoD supplement to the FAR. Defines authority, applicability, and the role of the Defense Acquisition Regulations System (DARS) in maintaining uniform acquisition policies across military departments and defense agencies.

Definitions of Words and Terms

Provides DoD-specific definitions that supplement FAR Part 2. Includes terms unique to defense procurement such as "head of the agency," "contracting activity," and organizational terminology used throughout DFARS.

Improper Business Practices and Personal Conflicts of Interest

Addresses DoD-specific ethics requirements, anti-corruption measures, and contractor code of business ethics and conduct. Implements defense-unique reporting requirements for suspected violations of procurement integrity.

Administrative and Information Matters

Covers DoD administrative requirements including CAGE code assignment, safeguarding Controlled Unclassified Information (CUI), and the Procurement Instrument Identifier (PIID) numbering system. Central to cybersecurity compliance for defense contractors.

Publicizing Contract Actions

Supplements FAR synopsizing requirements with DoD-specific publication policies. Addresses when defense acquisitions must be publicized and exceptions for classified or sensitive procurements.

Competition Requirements

Implements DoD competition policies supplementing the Competition in Contracting Act (CICA). Defines approval levels for sole-source justifications, unusual and compelling urgency determinations, and other-than-full-and-open competition in defense acquisitions.

Acquisition Planning

Establishes DoD acquisition planning requirements including written acquisition strategies for major defense programs. Covers consolidation, bundling restrictions, and requirements for market research before solicitation.

Required Sources of Supplies and Services

Defines DoD priorities for supply sources including Defense Logistics Agency (DLA), AbilityOne, and Federal Prison Industries (UNICOR). Addresses use of Government excess property and inter-service support agreements.

Contractor Qualifications

Covers DoD contractor responsibility determinations, debarment and suspension procedures, and organizational conflicts of interest (OCI) specific to defense contracts. Includes requirements for contractors supporting systems engineering and technical assistance.

Market Research

Supplements FAR market research requirements with DoD-specific considerations. Directs contracting officers to use the Federal Procurement Data System and other defense-unique databases to identify potential sources and commercial solutions.

Describing Agency Needs

Addresses DoD requirements for describing needs including data item descriptions (DIDs), military specifications, and the preference for performance-based specifications. Implements the policy of using commercial standards over military-unique specifications.

Acquisition of Commercial Products and Commercial Services

Implements DoD commercial item acquisition policies including the commercial item determination process, cost data requirements, and tailored compliance for commercial contractors. Critical for companies selling commercial products to the military.

Simplified Acquisition Procedures

Covers DoD simplified acquisition procedures for purchases under the Simplified Acquisition Threshold. Includes use of Government-wide commercial purchase cards and procedures for contingency operations with higher thresholds.

Sealed Bidding

Provides DoD supplemental procedures for sealed bidding including Invitations for Bids (IFBs). While sealed bidding is less common in defense procurement than negotiated acquisitions, this part establishes the rules when lowest-price awards are appropriate.

Contracting by Negotiation

The primary contracting method for defense acquisitions. Covers source selection procedures, proposal evaluation factors, best value determinations, and cost or pricing data requirements (Truth in Negotiations Act). Essential for any company competing for negotiated DoD contracts.

Types of Contracts

Defines DoD-specific policies on contract types including fixed-price, cost-reimbursement, incentive, indefinite-delivery, and time-and-materials contracts. Includes unique provisions for undefinitized contract actions (UCAs) and economic price adjustment in defense contracts.

Special Contracting Methods

Covers DoD-specific special contracting methods including multiyear contracting, options, undefinitized contract actions (UCAs), and master agreements. Multiyear procurement is particularly important for defense programs requiring stable funding over several years.

Emergency Acquisitions

Provides DoD-specific flexibilities and streamlined procedures for acquisitions during contingency operations, defense or recovery from certain attacks, humanitarian or peacekeeping operations, and other emergency situations. Raises thresholds and relaxes competition requirements.

Small Business Programs

Implements DoD small business policies including set-asides, 8(a), HUBZone, SDVOSB, and WOSB programs specific to defense. Addresses subcontracting plan requirements and the Mentor-Protege program unique to DoD that pairs large defense primes with small businesses.

Application of Labor Laws

Covers DoD-specific labor law requirements including Davis-Bacon Act, Service Contract Act, and contractor personnel deployed in theater. Addresses restrictions on contractor employees in deployed environments and labor standards for overseas defense contracts.

Environment, Energy, and Water Efficiency

Addresses DoD environmental and energy requirements for defense contracts. Covers hazardous material management, ozone-depleting substances, and environmental cleanup responsibilities unique to military operations and installations.

Protection of Privacy and Freedom of Information

Implements DoD-specific requirements for protecting personally identifiable information (PII) and complying with the Privacy Act and Freedom of Information Act in defense contracts. Covers handling of sensitive personal data by contractor personnel.

Foreign Acquisition

One of the most complex DFARS parts. Covers Buy American Act, Berry Amendment (domestic sourcing for textiles, metals, and food), trade agreements, International Traffic in Arms Regulations (ITAR), and foreign military sales (FMS). Critical for any defense contractor with global supply chains.

Other Socioeconomic Programs

Implements DoD-specific socioeconomic programs including Indian incentives, historically underutilized business zones (HUBZone), and policies supporting Historically Black Colleges and Universities (HBCUs) and Minority Institutions (MIs) in defense research.

Patents, Data, and Copyrights

Governs intellectual property rights in defense contracts including technical data rights, computer software rights, and patent ownership. Defines the critical categories of data rights: unlimited, government purpose, limited, and restricted. One of the most consequential parts for technology companies contracting with DoD.

Bonds and Insurance

Establishes DoD requirements for performance bonds, payment bonds, and insurance in defense contracts. Includes specific policies on aircraft, vessel, and nuclear hazards insurance unique to military operations.

Taxes

Addresses federal, state, and local tax implications for defense contracts. Covers tax exemptions for government purchases, overseas tax relief agreements, and special tax considerations for contracts performed in foreign countries.

Cost Accounting Standards Administration

Implements Cost Accounting Standards (CAS) requirements for defense contracts. Covers CAS applicability, disclosure statements, and compliance monitoring. Full CAS coverage applies to contracts over $50M with covered contractors, which is common in defense procurement.

Contract Cost Principles

Defines allowable and unallowable costs specific to defense contracts. Includes DoD-unique cost allowability rules for independent research and development (IR&D), bid and proposal (B&P) costs, and compensation limits for contractor employees.

Contract Financing

Covers progress payments, performance-based payments, and other contract financing mechanisms for defense contracts. Includes policies on advance payments, assignment of claims, and electronic submission of payment requests through Wide Area WorkFlow (WAWF).

Protests, Disputes, and Appeals

Addresses protest, dispute, and appeal procedures specific to DoD contracts. Covers the role of the Armed Services Board of Contract Appeals (ASBCA) and agency-level protest procedures for defense procurements.

Major System Acquisition

Governs acquisition of major defense systems including ACAT I, II, and III programs. Implements earned value management system (EVMS) requirements and establishes policies for oversight of large weapon systems and defense programs exceeding defined dollar thresholds.

Research and Development Contracting

Covers DoD research and development contracting including Broad Agency Announcements (BAAs), Small Business Innovation Research (SBIR), and policies for managing R&D contracts. Addresses the full spectrum from basic research (6.1) through system development (6.5).

Construction and Architect-Engineer Contracts

Implements DoD-specific construction and A-E contracting policies. Covers military construction (MILCON) projects, design-build procedures, and contractor qualifications unique to defense facility construction including secure and classified facilities.

Service Contracting

Addresses DoD service contracting including advisory and assistance services, management support services, and restrictions on personal services contracts. Includes requirements for contractor personnel supporting military operations and workforce mix considerations.

Acquisition of Information Technology

Covers DoD IT acquisition including cybersecurity requirements, cloud computing, and telecommunications. Implements the DoD Cloud Computing Security Requirements Guide (SRG) and policies on foreign-source IT restrictions critical to defense information systems.

Acquisition of Utility Services

Addresses procurement of utility services (electricity, natural gas, water, sewage) for DoD installations. Covers areawide contracts, privatization of utility systems, and energy conservation requirements specific to military bases and facilities.

Contract Administration and Audit Services

Covers the role of the Defense Contract Management Agency (DCMA) and Defense Contract Audit Agency (DCAA) in administering and auditing defense contracts. Addresses contractor business system reviews, novation agreements, and earned value management oversight.

Contract Modifications

Establishes DoD policies for bilateral and unilateral contract modifications, change orders, and equitable adjustments. Covers engineering change proposals (ECPs) and the value engineering change proposal (VECP) process in defense contracts.

Subcontracting Policies and Procedures

Governs DoD subcontracting policies including consent to subcontract, contractor purchasing system reviews (CPSR), and flowdown of defense-unique requirements. Addresses the complex supply chain management challenges in major defense programs.

Government Property

Covers the management and accountability of Government-Furnished Property (GFP) and Government-Furnished Equipment (GFE) in defense contracts. Includes requirements for property control systems, inventory management, and disposition of government property held by contractors.

Quality Assurance

Implements DoD quality assurance requirements including Government source inspection, first article testing, and higher-level contract quality requirements. Addresses AS9100 and other quality standards specific to defense and aerospace manufacturing.

Transportation

Covers DoD transportation requirements including military shipping, hazardous materials transportation, and the use of the Defense Transportation System (DTS). Addresses unique defense logistics challenges including overseas shipment and security requirements.

Termination of Contracts

Covers termination for convenience (T4C) and termination for default (T4D) specific to defense contracts. Addresses settlement procedures, partial terminations, and the unique complexities of terminating large weapons system contracts.

Extraordinary Contractual Actions and the Safety Act

Authorizes extraordinary contractual relief for defense contractors including amendments without consideration, indemnification, and actions to facilitate the national defense. Implements the SAFETY Act for anti-terrorism technologies.

Use of Government Sources by Contractors

Governs when and how defense contractors may use government supply sources, including the Defense Logistics Agency supply system and government testing facilities. Addresses authorization procedures and accounting requirements for contractor use of government resources.

Solicitation Provisions and Contract Clauses

The most referenced DFARS part, containing all defense-unique solicitation provisions and contract clauses. Includes DFARS 252.204-7012 (safeguarding CUI/CMMC), DFARS 252.225-7001 (Buy American), DFARS 252.227-7013 (technical data rights), and hundreds of other clauses that impose requirements on defense contractors.

Forms

Prescribes DoD-specific forms used in defense contracting including DD Form 250 (Material Inspection and Receiving Report), DD Form 254 (Contract Security Classification Specification), and DD Form 1423 (Contract Data Requirements List). These forms supplement the standard government forms in FAR Part 53.