FAR Part 8: Required Sources of Supplies and Services
Before a federal agency can buy on the open market, it must first check a series of mandatory sources. FAR Part 8 establishes this priority system, directing agencies to specific supply channels before they can conduct competitive procurements. Understanding Part 8 is essential for contractors to know when and how they can compete for government business.
This guide covers the priority of sources, each mandatory source program, GSA Federal Supply Schedules, and how Part 8 shapes the competitive landscape.
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Priority of Sources (FAR 8.002)
FAR 8.002 establishes a mandatory order of priority that contracting officers must follow when fulfilling requirements for supplies and services. Agencies must consider sources in this order before conducting open market procurements:
Agency Inventories & Excess from Other Agencies
Before buying anything new, agencies must first check their own inventory and excess property from other agencies through the GSA disposal process. This prevents wasteful purchasing of items the government already owns.
AbilityOne / JWOD Program
Products and services on the AbilityOne Procurement List must be purchased from participating nonprofit agencies that employ people who are blind or have severe disabilities. This is a mandatory source — agencies cannot bypass it for price or convenience.
Wholesale Supply Sources (GSA Stock, DLA)
Government wholesale supply operations including GSA Global Supply and the Defense Logistics Agency (DLA). These sources maintain large inventories of common-use items at government-negotiated prices.
Federal Prison Industries (UNICOR)
UNICOR manufactures a range of products using federal prison labor. While UNICOR's mandatory source status has been modified since 2004, it retains priority when its products meet agency needs at fair market prices and delivery timelines.
GSA Federal Supply Schedules
The Multiple Award Schedule (MAS) program provides pre-negotiated contracts covering millions of products and services. Ordering from Schedules uses streamlined procedures under FAR 8.4.
Commercial Sources (Open Market)
Only after exhausting (or determining that higher-priority sources cannot meet the requirement) may the agency procure from commercial sources using FAR Part 12, Part 13, or Part 15 procedures.
AbilityOne / JWOD Program
The AbilityOne Program (formerly known as the Javits-Wagner-O'Day or JWOD Program) is one of the largest sources of employment for people who are blind or have significant disabilities in the United States. Under the Javits-Wagner-O'Day Act (41 U.S.C. 8501-8506), federal agencies are required to purchase products and services on the AbilityOne Procurement List from participating nonprofit agencies.
The program is administered by the U.S. AbilityOne Commission, which maintains the Procurement List of products and services. Two central nonprofit agencies coordinate production: National Industries for the Blind (NIB) and SourceAmerica. They allocate orders to a network of approximately 450 nonprofit agencies across the country.
For private contractors, AbilityOne has several implications:
- You cannot compete for items on the Procurement List — they are reserved for AbilityOne nonprofits
- AbilityOne products include office supplies, furniture, janitorial products, textiles, and various manufactured goods
- AbilityOne services include custodial, grounds maintenance, food service, contact centers, and administrative support
- If your product or service category is added to the Procurement List, existing commercial contracts may not be renewed
- Subcontracting to AbilityOne nonprofits can count toward small business subcontracting goals in some circumstances
Federal Prison Industries (UNICOR)
Federal Prison Industries, operating under the trade name UNICOR, is a government corporation that employs federal inmates to produce goods and services for federal agencies. UNICOR manufactures furniture, electronics, textiles, plastics, and other products, and provides services including data entry, contact center operations, and printing.
Historically, UNICOR had mandatory source status — agencies were required to purchase UNICOR products when available. The National Defense Authorization Act for FY 2004 modified this requirement. Under current rules:
- Agencies must conduct market research before purchasing from UNICOR
- If comparable commercial products are available at fair market price, agencies may conduct a competitive procurement
- UNICOR must be included as a potential source in competitive procurements for products it manufactures
- If UNICOR's price is competitive and it can meet delivery schedules, it retains priority
- For new products not on UNICOR's schedule, the agency can procure commercially without UNICOR consideration
This means that private contractors now have more opportunity to compete against UNICOR than before 2004, but UNICOR remains a significant player in several product categories, particularly office furniture, clothing, and electronics assembly.
GSA Federal Supply Schedules
The GSA Multiple Award Schedule (MAS) program, governed by FAR 8.4, is the government's largest procurement vehicle. It consists of long-term government-wide contracts with commercial firms, providing federal agencies with a simplified process for obtaining commercial products and services at pre-negotiated prices.
Key features of GSA Schedules include:
- Pre-negotiated pricing, terms, and conditions (reducing procurement lead time)
- Simplified ordering procedures under FAR 8.4 (not a full competitive procurement)
- 20-year maximum contract period (5-year base plus three 5-year options)
- Access by all federal agencies, and many state and local governments
- Covers virtually every category of commercial products and services
For orders over the micro-purchase threshold ($10,000), agencies must consider multiple Schedule holders, compare pricing, and document their best value determination. For orders over the simplified acquisition threshold ($250,000), the ordering agency must post a Request for Quotation (RFQ) on GSA eBuy and evaluate quotes from at least three Schedule holders.
GSA Global Supply is a separate program that maintains a stock of common-use items (office supplies, tools, hardware, janitorial products) in GSA distribution centers. Agencies can order GSA Stock items using a government purchase card for fast fulfillment. This is a wholesale channel, distinct from the Schedule program.
How Part 8 Affects Competition
FAR Part 8's priority system significantly shapes the competitive landscape for government contractors. Understanding its implications helps you choose the right market entry strategies.
For GSA Schedule holders: Having a GSA Schedule contract positions you favorably in the priority system. Many agencies prefer ordering from Schedules because it simplifies the procurement process and reduces lead time. If you sell commercial products or services to the government, a GSA Schedule is often the most efficient path to market.
For open market competitors: If your product or service category is covered by AbilityOne, UNICOR, or GSA Schedules, competing on the open market becomes more difficult because agencies must exhaust higher-priority sources first. However, if mandatory sources cannot meet the agency's specific requirements (quality, delivery, customization), open market procurement remains available.
Strategic implications: Many contractors pursue GSA Schedule contracts specifically to bypass the open market competition barrier. Others partner with AbilityOne nonprofits or position their offerings as distinct from what mandatory sources can provide. Understanding where your products fall in the Part 8 hierarchy is essential for choosing the right go-to-market approach.
Frequently Asked Questions
What is the priority of sources under FAR Part 8?
FAR 8.002 establishes a mandatory order agencies must follow: (1) agency inventories and excess from other agencies, (2) AbilityOne/JWOD products, (3) wholesale supply sources (GSA Stock, DLA), (4) Federal Prison Industries (UNICOR), (5) GSA Federal Supply Schedules, (6) commercial sources via other FAR procedures. Agencies must exhaust higher-priority sources before moving to open market procurement.
Can a private company compete against AbilityOne or UNICOR?
Generally, no — for items on the AbilityOne Procurement List, agencies are required to purchase from AbilityOne participating nonprofits. For UNICOR, the situation is more nuanced. Since 2004, agencies can conduct market research and, if comparable commercial products are available at fair market prices, they may procure commercially instead. However, UNICOR retains priority if it offers the product at competitive pricing and meets delivery requirements.
How do GSA Federal Supply Schedules work under Part 8?
GSA Schedules (also called MAS — Multiple Award Schedule) are pre-negotiated, long-term government-wide contracts. Agencies can order from Schedules using simplified procedures under FAR 8.4 without conducting a separate competitive procurement. For orders over the micro-purchase threshold, the ordering agency must compare prices among Schedule holders and document best value. Schedule contracts have pre-negotiated pricing, terms, and conditions.
Explore GSA Schedule and Open Market Opportunities
Search across SAM.gov, GSA eBuy, and FPDS for contract opportunities. Filter by procurement method to find GSA Schedule orders and open market solicitations.