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Defense Federal Acquisition Regulation SupplementTable of ContentsPART 230--COST ACCOUNTING STANDARDS ADMINISTRATIONSUBPART 230.2--CAS PROGRAM REQUIREMENTSPART 231--CONTRACT COST PRINCIPLES AND PROCEDURESSUBPART 231.1--APPLICABILITYSUBPART 231.2--CONTRACTS WITH COMMERCIAL ORGANIZATIONSSUBPART 231.3--CONTRACTS WITH EDUCATIONAL INSTITUTIONSSUBPART 231.6--CONTRACTS WITH STATE, LOCAL, AND FEDERALLYRECOGNIZED INDIAN TRIBAL GOVERNMENTSSUBPART 231.7--CONTRACTS WITH NONPROFIT ORGANIZATIONSPART 232--CONTRACT FINANCINGSUBPART 232.0SUBPART 232.1--NON-COMMERCIAL ITEM PURCHASE FINANCINGSUBPART 232.2--COMMERCIAL ITEM PURCHASE FINANCINGSUBPART 232.3--LOAN GUARANTEES FOR DEFENSE PRODUCTIONSUBPART 232.4--ADVANCE PAYMENTS FOR NON-COMMERCIAL ITEMSSUBPART 232.5--PROGRESS PAYMENTS BASED ON COSTSSUBPART 232.6--CONTRACT DEBTSSUBPART 232.7--CONTRACT FUNDINGSUBPART 232.8--ASSIGNMENT OF CLAIMSSUBPART 232.9--PROMPT PAYMENTSUBPART 232.10--PERFORMANCE-BASED PAYMENTSSUBPART 232.11--ELECTRONIC FUNDS TRANSFERSUBPART 232.70--ELECTRONIC SUBMISSION AND PROCESSING OFPAYMENT REQUESTS AND RECEIVING REPORTSSUBPART 232.71--LEVIES ON CONTRACT PAYMENTSSUBPART 232.72--PAYMENT IN LOCAL CURRENCY (AFGHANISTAN)1998 EDITIONx

Defense Federal Acquisition Regulation SupplementTable of ContentsPART 233--PROTESTS, DISPUTES, AND APPEALSSUBPART 233.1–PROTESTSSUBPART 233.2--DISPUTES AND APPEALSSUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTINGPART 234--MAJOR SYSTEM ACQUISITIONSUBPART 234.0SUBPART 234.2--EARNED VALUE MANAGEMENT SYSTEMSUBPART 234.70--ACQUISITION OF MAJOR WEAPON SYSTEMS ASCOMMERCIAL ITEMSSUBPART 234.71–COST AND SOFTWARE DATA REPORTINGPART 235--RESEARCH AND DEVELOPMENT CONTRACTINGSUBPART 235.0PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTSSUBPART 236.1--GENERALSUBPART 236.2--SPECIAL ASPECTS OF CONTRACTING FORCONSTRUCTIONSUBPART 236.3—TWO-PHASE DESIGN-BUILD SELECTION PROCEDURESSUBPART 236.5--CONTRACT CLAUSESSUBPART 236.6--ARCHITECT-ENGINEER SERVICESSUBPART 236.7--STANDARD AND OPTIONAL FORMS FOR CONTRACTINGFOR CONSTRUCTION, ARCHITECT-ENGINEER SERVICES, ANDDISMANTLING, DEMOLITION, OR REMOVAL OF IMPROVEMENTSPART 237--SERVICE CONTRACTINGSUBPART 237.1--SERVICE CONTRACTS--GENERALSUBPART 237.2--ADVISORY AND ASSISTANCE SERVICESSUBPART 237.5--MANAGEMENT OVERSIGHT OF SERVICE CONTRACTSSUBPART 237.70--MORTUARY SERVICESSUBPART 237.71--LAUNDRY AND DRY CLEANING SERVICES1998 EDITIONxi

Defense Federal Acquisition Regulation SupplementTable of ContentsSUBPART 237.72--EDUCATIONAL SERVICE AGREEMENTSSUBPART 237.73--SERVICES OF STUDENTS AT RESEARCH ANDDEVELOPMENT LABORATORIESSUBPART 237.74--SERVICES AT INSTALLATIONS BEING CLOSEDSUBPART 237.75—ACQUISITION AND MANAGEMENT OF INDUSTRIALRESOURCESSUBPART 237.76–CONTINUATION OF ESSENTIAL CONTRACTOR SERICESSUBPART 237.77—COMPETITION FOR RELIGIOUS-RELATED SERVICESPART 238--FEDERAL SUPPLY SCHEDULE CONTRACTINGPART 239--ACQUISITION OF INFORMATION TECHNOLOGYSUBPART 239.0SUBPART 239.1--GENERALSUBPART 239.70--EXCHANGE OR SALE OF INFORMATION TECHNOLOGYSUBPART 239.71--SECURITY AND PRIVACY FOR COMPUTER SYSTEMSSUBPART 239.72--STANDARDSSUBPART 239.73--REQUIREMENTS FOR INFORMATION RELATING TOSUPPLY CHAIN RISKSUBPART 239.74--TELECOMMUNICATIONS SERVICESSUBPART 239.76—CLOUD COMPUTINGPART 240--RESERVEDPART 241--ACQUISITION OF UTILITY SERVICESSUBPART 241.1--GENERALSUBPART 241.2--ACQUIRING UTILITY SERVICESSUBPART 241.5--SOLICITATION PROVISION AND CONTRACT CLAUSESSUBCHAPTER G--CONTRACT MANAGEMENTPART 242--CONTRACT ADMINISTRATION AND AUDIT SERVICESSUBPART 242.01998 EDITIONxii

Defense Federal Acquisition Regulation SupplementTable of ContentsSUBPART 242.2--CONTRACT ADMINISTRATION SERVICESSUBPART 242.3--CONTRACT ADMINISTRATION OFFICE FUNCTIONSSUBPART 242.5--POSTAWARD ORIENTATIONSUBPART 242.6--CORPORATE ADMINISTRATIVE CONTRACTING OFFICERSUBPART 242.7--INDIRECT COST RATESSUBPART 242.8--DISALLOWANCE OF COSTSSUBPART 242.11--PRODUCTION SURVEILLANCE AND REPORTINGSUBPART 242.12--NOVATION AND CHANGE-OF-NAME AGREEMENTSSUBPART 242.15--CONTRACTOR PERFORMANCE INFORMATIONSUBPART 242.70--CONTRACTOR BUSINESS SYSTEMSSUBPART 242.71--VOLUNTARY REFUNDSSUBPART 242.72--CONTRACTOR MATERIAL MANAGEMENT ANDACCOUNTING SYSTEMSUBPART 242.73--CONTRACTOR INSURANCE/PENSION REVIEWSUBPART 242.74--TECHNICAL REPRESENTATION AT CONTRACTORFACILITIESSUBPART 242.75--CONTRACTOR ACCOUNTING SYSTEMS AND RELATEDCONTROLSPART 243--CONTRACT MODIFICATIONSSUBPART 243.1--GENERALSUBPART 243.2--CHANGE ORDERSPART 244--SUBCONTRACTING POLICIES AND PROCEDURESSUBPART 244.1–GENERALSUBPART 244.2--CONSENT TO SUBCONTRACTSSUBPART 244.3--CONTRACTORS' PURCHASING SYSTEMS REVIEWSSUBPART 244.4--SUBCONTRACTS FOR COMMERCIAL ITEMS ANDCOMMERCIAL COMPONENTS1998 EDITIONxiii

Defense Federal Acquisition Regulation SupplementTable of ContentsPART 245--GOVERNMENT PROPERTYSUBPART 245.1--GENERALSUBPART 245.2--SOLICITATION AND EVALUATION PROCEDURESSUBPART 245.3--AUTHORIZING THE USE AND RENTAL OFGOVERNMENT PROPERTYSUBPART 245.4--TITLE TO GOVERNMENT PROPERTYSUBPART 245.5--SUPPORT GOVERNMENT PROPERTY ADMINISTRATIONSUBPART 245.6--REPORTING, REUTILIZATION, AND DISPOSALSUBPART 245.70--PLANT CLEARANCE FORMSPART 246--QUALITY ASSURANCESUBPART 246.1--GENERALSUBPART 246.2--CONTRACT QUALITY REQUIREMENTSSUBPART 246.3--CONTRACT CLAUSESSUBPART 246.4--GOVERNMENT CONTRACT QUALITY ASSURANCESUBPART 246.5--ACCEPTANCESUBPART 246.6--MATERIAL INSPECTION AND RECEIVING REPORTSSUBPART 246.7--WARRANTIESSUBPART 246.8--CONTRACTOR LIABILITY FOR LOSS OF OR DAMAGE TOPROPERTY OF THE GOVERNMENTPART 247--TRANSPORTATIONSUBPART 247.0SUBPART 247.1--GENERALSUBPART 247.2--CONTRACTS FOR TRANSPORTATION OR FORTRANSPORTATION-RELATED SERVICESSUBPART 247.3--TRANSPORTATION IN SUPPLY CONTRACTSSUBPART 247.5--OCEAN TRANSPORTATION BY U.S.-FLAG VESSELS1998 EDITIONxiv

Defense Federal Acquisition Regulation SupplementTable of ContentsPART 248--VALUE ENGINEERINGPART 249--TERMINATION OF CONTRACTSSUBPART 249.1--GENERAL PRINCIPLESSUBPART 249.5--CONTRACT TERMINATION CLAUSESSUBPART 249.70--SPECIAL TERMINATION REQUIREMENTSPART 250--EXTRAORDINARY CONTRACTUAL ACTIONS AND THE SAFETYACTSUBPART 250.1--EXTRAORDINARY CONTRACTUAL ACTIONSPART 251--USE OF GOVERNMENT SOURCES BY CONTRACTORSSUBPART 251.1--CONTRACTOR USE OF GOVERNMENT SUPPLY SOURCESSUBPART 251.2--CONTRACTOR USE OF INTERAGENCY FLEETMANAGEMENT SYSTEM (IFMS) VEHICLESSUBCHAPTER H--CLAUSES AND FORMSPART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSESSUBPART 252.1--INSTRUCTIONS FOR USING PROVISIONS AND CLAUSESSUBPART 252.2--TEXT OF PROVISIONS AND CLAUSESPART 253--FORMSSUBPART 253.3--ILLUSTRATION OF FORMSAPPENDICESAPPENDIX A--ARMED SERVICES BOARD OF CONTRACT APPEALSPart 1--CharterPart 2--RulesAPPENDIX B--RESERVEDAPPENDIX C--RESERVEDAPPENDIX D--RESERVEDAPPENDIX E--RESERVED1998 EDITIONxv

Defense Federal Acquisition Regulation SupplementTable of ContentsAPPENDIX F--MATERIAL INSPECTION AND RECEIVING REPORTPart 1--Introduction.Part 2--Contract Quality Assurance on Shipments Between Contractors.Part 3--Preparation of the Wide Area Workflow (WAWF) Receiving Report(RR), WAWF Reparable Receiving Report (WAWF RRR), and WAWFEnergy RR.Part 4--Preparation of the DD Form 250 and DD Form 250c.Part 5--Distribution of Wide Area Workflow Receiving Report (WAWF RR), DDForm 250 and DD Form 250c.Part 6--Preparation of the DD Form 250-1 (Loading Report).Part 7--Preparation of the DD Form 250-1 (Discharge Report).Part 8--Distribution of the DD Form 250-1.APPENDIX G--RESERVEDAPPENDIX H--DEBARMENT AND SUSPENSION PROCEDURESAPPENDIX I--POLICY AND PROCEDURES FOR THE DOD PILOTMENTOR-PROTEGE PROGRAM1998 EDITIONxvi

Defense Federal Acquisition Regulation SupplementPart 201—Federal Acquisition Regulations SystemTABLE OF CONTENTS(Revised May 4, 2018)SUBPART 201.1--PURPOSE, AUTHORITY, 5Issuance.201.105-3Copies.201.106OMB approval under the Paperwork Reduction Act.201.107Certifications.201.109Statutory acquisition-related dollar thresholds – adjustment forinflation.201.170Peer reviews.SUBPART 201.2--ADMINISTRATION201.201Maintenance of the FAR.201.201-1The two councils.201.201-70Maintenance of Procedures, Guidance, and Information.SUBPART 201.3--AGENCY ACQUISITION REGULATIONS201.301Policy.201.303Publication and codification.201.304Agency control and compliance procedures.SUBPART 201.4--DEVIATIONS FROM THE FAR201.402Policy.201.403Individual deviations.201.404Class deviations.SUBPART 201.6--CAREER DEVELOPMENT, CONTRACTING AUTHORITY,AND RESPONSIBILITIES201.602Contracting act clause.201.603Selection, appointment, and termination of appointment forcontracting 01.670Appointment of property administrators and plant clearance officers.1998 EDITION1

Defense Federal Acquisition Regulation SupplementPart 201—Federal Acquisition Regulations SystemSUBPART 201.1--PURPOSE, AUTHORITY, ISSUANCE(Revised May 31, 2019)201.101 Purpose.(1) The defense acquisition system, as defined in 10 U.S.C 2545, exists tomanage the investments of the United States in technologies, programs, andproduct support necessary to achieve the national security strategy prescribed bythe President pursuant to section 108 of the National Security Act of 1947 (50U.S.C. 3043) and to support the United States Armed Forces.(2) The investment strategy of DoD shall be postured to support not only thecurrent United States armed forces, but also future armed forces of the UnitedStates.(3) The primary objective of DoD acquisition is to acquire quality supplies andservices that satisfy user needs with measurable improvements to missioncapability and operational support at a fair and reasonable price.201.104 Applicability.The FAR and the Defense Federal Acquisition Regulation Supplement (DFARS) alsoapply to purchases and contracts by DoD contracting activities made in support offoreign military sales or North Atlantic Treaty Organization cooperative projectswithout regard to the nature or sources of funds obligated, unless otherwise specified inthis regulation.201.105 Issuance.201.105-3 Copies.The DFARS and the DFARS Procedures, Guidance, and Information (PGI) areavailable electronically via the World Wide Web 06 OMB approval under the Paperwork Reduction Act.See PGI 201.106 for a list of the information collection and recordkeeping requirementscontained in this regulation that have been approved by the Office of Management andBudget.201.107 Certifications.In accordance with 41 U.S.C. 1304, a new requirement for a certification by a contractoror offeror may not be included in the DFARS unless (1) The certification requirement is specifically imposed by statute; or(2) Written justification for such certification is provided to the Secretary of Defenseby the Under Secretary of Defense (Acquisition, Technology, and Logistics), and theSecretary of Defense approves in writing the inclusion of such certification requirement.1998 EDITION201.1-1

Defense Federal Acquisition Regulation SupplementPart 201—Federal Acquisition Regulations System201.109 Statutory acquisition-related dollar thresholds – adjustment forinflation.(a)(i) 41 U.S.C. 1908(d) requires the adjustment for inflation of all statutoryacquisition-related dollar thresholds in the DFARS be applied to contracts andsubcontracts without regard to the date of award of the contract or subcontract, exceptthresholds based on the Wage Rate Requirements statute, the Service Contract LaborStandards statute, or established by the United States Trade Representative pursuantto the Trade Agreement Act, which are not escalated by the statute.(ii) Section 814(b) of the National Defense Authorization Act for Fiscal Year2012 (Pub. L. 112-81) requires that the threshold established in 10 U.S.C. 2253(a)(2) forthe acquisition of right-hand drive passenger sedans be included in the list of dollarthresholds that are subject to adjustment for inflation in accordance with therequirements of 41 U.S.C. 1908, and is adjusted pursuant to such provisions, asappropriate.(d) A matrix showing the most recent escalation adjustments of statutoryacquisition-related dollar thresholds is available at PGI 201.109.201.170 Peer reviews.(a) DoD peer reviews.(1) The Office of the Director, Defense Procurement and Acquisition Policy, willorganize teams of reviewers and facilitate peer reviews for solicitations and contracts,as follows using the procedures at PGI 201.170—(i) Preaward peer reviews for competitive procurements will be conducted inthree phases for all solicitations valued at 1 billion or more;(ii) Preaward peer reviews for noncompetitive procurements will beconducted in two phases for new contract actions valued at 500 million or more; and(iii) Postaward peer reviews will be conducted for all contracts for servicesvalued at 1 billion or more.(2) To facilitate planning for peer reviews, the military departments anddefense agencies shall provide a rolling annual forecast of acquisitions that will besubject to DoD peer reviews at the end of each quarter (i.e., March 31; June 30;September 30; December 31), to the Deputy Director, Defense Procurement andAcquisition Policy (Contract Policy and International Contracting) via email (b) Component peer reviews. The military departments and defense agencies shallestablish procedures for—(1) Preaward peer reviews of solicitations for competitive procurements valuedat less than 1 billion;(2) Preaward peer reviews for noncompetitive procurements valued at less than 500 million; and1998 EDITION201.1-2

Defense Federal Acquisition Regulation SupplementPart 201—Federal Acquisition Regulations Systembillion.(3) Postaward peer reviews of all contracts for services valued at less than 11998 EDITION201.1-3

Defense Federal Acquisition Regulation SupplementPart 201—Federal Acquisition Regulations SystemSUBPART 201.2--ADMINISTRATION(Revised February 28, 2013)201.201 Maintenance of the FAR.201.201-1 The two councils.(c) The composition and operation of the DAR Council is prescribed in DoDInstruction 5000.35, Defense Acquisition Regulations (DAR) System.(d)(i) Departments and agencies process proposed revisions of FAR or DFARSthrough channels to the Director of the DAR Council. Process the proposed revision asa memorandum in the following format, addressed to the Director, DAR Council,OUSD(AT&L), 3060 Defense Pentagon, Washington, DC 20301-3060; datafax(571) 372-6094.I. PROBLEM: Succinctly state the problem created by current FAR and/orDFARS coverage and describe the factual and/or legal reasons necessitating the changeto the regulation.II. RECOMMENDATION: Identify the FAR and/or DFARS citations to berevised. Attach as TAB A a copy of the text of the existing coverage, conformed toinclude the proposed additions and deletions. Indicate deleted coverage with dashedlines through the current words being deleted and insert proposed language in bracketsat the appropriate locations within the existing coverage. If the proposed deletedportion is extensive, it may be outlined by lines forming a box with diagonal linesdrawn connecting the corners.III. DISCUSSION: Include a complete, convincing explanation of why thechange is necessary and how the recommended revision will solve the problem.Address advantages and disadvantages of the proposed revision, as well as any cost oradministrative impact on Government activities and contractors. Identify any potentialimpact of the change on automated systems, e.g., automated financial and procurementsystems. Provide any other background information that would be helpful inexplaining the issue.IV. COLLATERALS: Address the need for public comment (FAR 1.301(b)and Subpart 1.5), the Paperwork Reduction Act, and the Regulatory Flexibility Act(FAR 1.301(c)).V. DEVIATIONS: If a recommended revision of DFARS is a FAR deviation,identify the deviation and include under separate TAB a justification for the deviationthat addresses the requirements of 201.402(2). The justification should be in the formof a memorandum for the Director of Defense Procurement and Acquisition Policy,Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics).(ii) The public may offer proposed revisions of FAR or DFARS by submission ofa memorandum, in the format (including all of the information) prescribed inparagraph (d)(i) of this subsection, to the Director of the DAR Council.1998 EDITION201.2-1

Defense Federal Acquisition Regulation SupplementPart 201—Federal Acquisition Regulations System201.201-70 Maintenance of Procedures, Guidance, and Information.The DAR Council is also responsible for maintenance of the DFARS Procedures,Guidance, and Information (PGI).1998 EDITION201.2-2

Defense Federal Acquisition Regulation SupplementPart 201—Federal Acquisition Regulations SystemSUBPART 201.3--AGENCY ACQUISITION REGULATIONS(Revised June 26, 2015)201.301 Policy.(a)(1) DoD implementation and supplementation of the FAR is issued in theDefense Federal Acquisition Regulation Supplement (DFARS) under authorization andsubject to the authority, direction, and control of the Secretary of Defense. The DFARScontains—(i) Requirements of law;(ii) DoD-wide policies;(iii) Delegations of FAR authorities;(iv) Deviations from FAR requirements; and(v) Policies/procedures that have a significant effect beyond the internaloperating procedures of DoD or a significant cost or administrative impact oncontractors or offerors.(2) Relevant procedures, guidance, and information that do not meet thecriteria in paragraph (a)(1) of this section are issued in the DFARS Procedures,Guidance, and Information (PGI).(b) When Federal Register publication is required for any policy, procedure, clause,or form, the department or agency requesting Under Secretary of Defense (Acquisition,Technology, and Logistics) (USD(AT&L)) approval for use of the policy, procedure,clause, or form (see 201.304(1)) must include an analysis of the public comments in therequest for approval. Information on determining when a clause requires publication inthe Federal Register and approval in accordance with 201.304(1) is provided at PGI201.301(b).201.303 Publication and codification.(a)(i) The DFARS is codified under chapter 2 in Title 48, Code of FederalRegulations.(ii) To the extent possible, all DFARS text (whether implemental orsupplemental) is numbered as if it were implemental. Supplemental numbering is usedonly when the text cannot be integrated intelligibly with its FAR counterpart.(A) Implemental numbering is the same as its FAR counterpart, exceptwhen the text exceeds one paragraph, the subdivisions are numbered by skipping a unitin the FAR 1.105-2(b)(2) prescribed numbering sequence. For example, threeparagraphs implementing FAR 19.501 would be numbered 219.501(1), (2), and (3)rather than (a), (b), and (c). Three paragraphs implementing FAR 19.501(a) would benumbered 219.501(a)(i), (ii), and (iii) rather than (a)(1), (2), and (3). Further subdivisionof the paragraphs follows the prescribed numbering seq

Defense Federal Acquisition Regulation Supplement Table of Contents 1998 EDITION i (Revised November 30, 2020) SUBCHAPTER A--GENERAL . PART 201--FEDERAL ACQUISITION REGULATIONS SYSTEM . SUBPART 201.1--PURPOSE, AUTHORITY, ISSUANCE . SUBPART 201.2--ADMINISTRATION . SUBPART 201.3--AGENCY ACQUISITION REGULATIONS . SUBPART 201.4--DEVIATIONS FROM THE FAR