Contract Clauses: Simple Words, Complex Meaning

Potential contractors with the Federal Government are held responsible to all the clauses that are included in the solicitation document as either “Incorporated by Reference (IBR)” or “Full Text (FT)”. All of the clauses are published in the Federal Acquisition Regulations (FAR), and also in agency FAR supplements like the Defense FAR Supplement (DFARS). Please note that the only supplement that applies is the one for the agency that you will be supporting under a contract.

You may ask, what is the difference between the IBR and FT clauses? A clause that is IBR only has the title and the effective date of the clause listed; therefore you are not aware of the intent and purpose of the clause. Whereas with the FT version, you have the title and effective date of the clause, but you also have the full intent and purpose of the clause spelled out along with the penalties for non-compliance. Clauses included in either case are non-negotiable and your acceptance is based on your submission of your signed proposal to the Federal Government.

Let’s look at some examples that show that the meaning of a few words that can have an impact on your ability to be compliant with the FAR or the DFARS. The definitions of the below listed word are directly from the FAR, Section 2, subpart 2.101. These definitions may not make a lot of logical sense when taken out of context without having the overall meaning of the clause. Common definitions are listed inside the parentheses.

WORD:  MAY
DEFINITION: May denotes the permissive. However, the words “no person may…” means that no person is required, authorized or permitted to do the act described. (Indicates possibility)
NUMBER OF TIMES IN FAR:             2005
NUMBER OF TIMES IN DFARS:        140

WORD:   SHALL
DEFINITION:  Means the Imperative (commanding, necessary).
NUMBER OF TIMES IN FAR:             2171
NUMBER OF TIMES IN DFARS:        147

WORD:   MUST
DEFINITION:  See ‘shall’ (obligation, requirement)
NUMBER OF TIMES IN FAR:             681
NUMBER OF TIMES IN DFARS:        86

WORD:   WILL
DEFINITION: Nothing in the FAR (command, expectation)
NUMBER OF TIMES IN FAR:             1162
NUMBER OF TIMES IN DFARS:        130

These simple words can cause you as the contractor a great amount of frustration and potentially even financial impact if you are not aware of what you have to do to meet the requirements of each single word.

Contract clauses may be daunting, but we’re here to help you through them. If you want the inside scoop on federal contracting issues and compliance, contact the Norcal PTAC for free guidance and assistance from one of our experienced Procurement Specialists.

Written by Joseph D. Moore, NORCAL PTAC Procurement Specialist