48 C.F.R. PART 816—TYPES OF CONTRACTS
Title 48 - Federal Acquisition Regulations System
Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).
(a) Contracts which include an economic price adjustment provision other than those contracts awarded by the National Cemetery System for monuments or those contracts that contain the clause for service contracts (FAR 22.1006(c)) require the prior approval of the Deputy Assistant Secretary for Acquisition and Materiel Management (90). The request for approval shall clearly set forth the need for the provision. (b) Any contract involving direct obligation of appropriations and which extends beyond the appropriation of the year in which the contract period begins or which is for more than one fiscal year, is to contain provisions to the effect that: (1) It is made for the period covered by the contract, subject to the availability of appropriations in the ensuing year(s), and (2) No service is to be performed by the contractor after September 30 of each fiscal year unless and until specifically authorized by the contracting officer or representative. (c) Architect-engineer contracts, construction contracts, or professional engineer contracts, financed by “no year appropriations” are not subject to the requirements of paragraph (b) of this section. [49 FR 12607, Mar. 29, 1984, as amended at 50 FR 792, Jan. 7, 1985; 54 FR 30045, July 18, 1989; 61 FR 20492, May 7, 1996] (a) Description. A letter of availability (sometimes inappropriately called a letter of intent) is a letter to a supplier primarily for the purpose of obtaining a place on the supplier's production or delivery schedule for long lead time items. Such a letter typically indicates that products or services are being considered for procurement, but that the statement of intent is not to be construed as a commitment. Such letters of availability are sometimes solicited by prospective contractors, or they may be originated by Government personnel. A letter of availability is distinguished from a letter contract which is specifically authorized in FAR 16.603. (b) Policy. (1) Unless specifically authorized by the Deputy Assistant Secretary for Acquisition and Materiel Management, letters of availability are not to be utilized for the following reasons: (i) While such letters of availability may disclaim Government liability, they may induce potential contractors to initiate costly preparations in anticipation of contract award. (ii) Procurements announced in such letters do not always materialize. The result may be costly to the Government, the prospective contractor, or both. If the author of the letter of availability is an authorized contracting officer of the Department, the Government may be bound by action, even though the action is contrary to sound procurement practices and/or fiscal regulations. If the author of the letter of availability lacks procurement authority, the prospective contractor may incur substantial expenditures which may not be recovered from the Government, but for which the prospective contractor may seek to hold the unauthorized author personally liable. (iii) The issuance of a letter of availability may violate the “Anti-Deficiency Act” (31 U.S.C. 1341). (2) It is recognized that potential contractors have a need to obtain procurement information at the earliest possible moment in order to make timely preparations. To this end, procurement personnel are expected to act as efficiently and expeditiously as possible on all procurement actions. [49 FR 12607, Mar. 29, 1974, as amended at 54 FR 30044, July 18, 1989; 54 FR 40064, Sept. 29, 1989]
Title 48: Federal Acquisition Regulations System
PART 816—TYPES OF CONTRACTS
Section Contents
816.102 Policies.
816.7001 Letters of availability.
Subpart 816.1—Selecting Contract Types
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816.102 Policies.
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Subpart 816.70—Unauthorized Agreements
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816.7001 Letters of availability.
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