FAR 13.106-3—Award and documentation.
Plain-English Summary
FAR 13.106-3 explains how a contracting officer must make and document award decisions under simplified acquisition procedures. It covers the core requirement to determine that the price is fair and reasonable, how to support that determination when competition is limited or absent, and what sources may be used to justify price reasonableness such as market research, prior prices, catalogs, related-industry comparisons, personal knowledge, independent Government estimates, or other reasonable bases. It also addresses special situations like minimum order quantities or prices that exceed the Government’s actual need, and requires the contracting officer to coordinate with the requiring activity and document the final action taken. In addition, the section sets out the minimum necessary file documentation and retention expectations, including how to record oral and written solicitations, what extra statements are needed in special cases, when unsuccessful suppliers must be notified, how to respond to requests for award information when non-price factors were used, and how to handle Taxpayer Identification Number information on award documents. In practice, this section is about making sure simplified acquisitions are awarded quickly but still supported by a defensible record that shows the Government got a fair deal and that the file contains only the documentation needed for management review and accountability.
Key Rules
Fair and reasonable price required
Before award, the contracting officer must determine that the proposed price is fair and reasonable. Whenever possible, that determination should be based on competitive quotations or offers because competition is the strongest support for price reasonableness.
Single response needs written support
If only one response is received, the contract file must include a statement explaining why the price is reasonable. The officer may rely on market research, prior reasonable prices, current price lists or catalogs, comparisons to similar items, personal knowledge, an independent Government estimate, or any other reasonable basis.
Catalog prices are not enough alone
A price appearing in a catalog, price list, or advertisement may help support reasonableness, but it does not by itself prove the price is fair and reasonable. The contracting officer still must make an independent judgment based on the total circumstances.
Minimum order issues must be resolved
If a supplier’s minimum order price or quantity is higher than the Government’s actual need or creates an unreasonable price, the contracting officer should tell the requiring activity all relevant facts and ask whether the requirement should be confirmed or changed. The file must document the final action taken.
Keep documentation to the minimum
Purchasing offices should retain only the data needed for management review purposes, and only for the minimum extent and duration necessary. The section emphasizes lean documentation, not a full procurement record for every simplified acquisition.
Record oral and written solicitations appropriately
For oral solicitations, the file should show the suppliers contacted, the prices quoted, and other relevant terms so the award decision is clear. For written solicitations under the simplified acquisition threshold, records may be limited to notes or abstracts showing prices, delivery, references to printed price lists used, suppliers contacted, and other pertinent data.
Add special statements when needed
Additional documentation is required in certain cases, including explaining the absence of competition when only one source is solicited for an acquisition at or below the simplified acquisition threshold, supporting awards based on factors other than price, and—except for DoD—justifying use of lowest price technically acceptable source selection.
Notify unsuccessful suppliers when required
For acquisitions at or below the simplified acquisition threshold, unsuccessful suppliers are notified only if requested or if notification is required by FAR 5.301, unless automatic notice is already provided through an electronic commerce method with widespread public notice.
Provide brief award explanation on request
If a supplier asks why an award was made on factors other than price alone, the contracting officer must provide a brief explanation of the basis for the award decision, consistent with the applicable award-notification rules.
Annotate TIN on award documents
When an oral solicitation is used, the copy of the award document sent to the payment office must include the contractor’s Taxpayer Identification Number and type of organization unless that information will be obtained from another source. The contracting officer must also tell the contractor that the TIN may be used to collect and report delinquent amounts owed to the Government.
Responsibilities
Contracting Officer
Determine price fairness and reasonableness before award; use competition when available; document the basis for a single-offer price reasonableness determination; address minimum order problems with the requiring activity; keep the file documentation to the minimum needed; record oral and written solicitation results appropriately; add required special statements; provide brief explanations to suppliers when requested; ensure TIN and organization type are annotated on award documents when oral solicitations are used; and disclose the Government’s potential use of the TIN for debt collection and reporting.
Purchasing Office
Retain supporting data for purchases in paper or electronic form only to the minimum extent and duration necessary for management review purposes, consistent with the records-retention rules in subpart 4.8.
Requiring Activity
Review the facts presented by the contracting officer when a supplier’s minimum order price or quantity exceeds the Government’s stated need, and confirm or alter the requirement as appropriate.
Supplier/Offeror
Provide quotations or offers in response to solicitations; if requesting information about an award made on factors other than price alone, ask for the explanation; and understand that the contractor’s TIN may be used by the Government for collection and reporting of delinquent amounts.
Payment Office
Receive award documents that include the contractor’s TIN and type of organization when oral solicitations are used, unless that information is obtained from another source.
Practical Implications
This section is a documentation-and-defensibility rule: even in simplified acquisitions, the file must show why the price was acceptable and why the award decision was proper.
Competition is the easiest way to support price reasonableness; when competition is absent, the contracting officer needs a clear, file-ready rationale based on one or more accepted sources.
Catalogs and price lists help, but they do not eliminate the need for judgment; relying on them alone is a common mistake.
Minimum order quantities can create avoidable overbuying or inflated unit prices, so contracting officers should push the issue back to the requiring activity before award.
Documentation should be lean but sufficient: too little creates audit risk, while unnecessary detail defeats the section’s instruction to keep records to a minimum.
Official Regulatory Text
(a) Basis for award. Before making award, the contracting officer must determine that the proposed price is fair and reasonable. (1) Whenever possible, base price reasonableness on competitive quotations or offers. (2) If only one response is received, include a statement of price reasonableness in the contract file. The contracting officer may base the statement on- (i) Market research; (ii) Comparison of the proposed price with prices found reasonable on previous purchases; (iii) Current price lists, catalogs, or advertisements. However, inclusion of a price in a price list, catalog, or advertisement does not, in and of itself, establish fairness and reasonableness of the price; (iv) A comparison with similar items in a related industry; (v) The contracting officer’s personal knowledge of the item being purchased; (vi) Comparison to an independent Government estimate; or (vii) Any other reasonable basis. (3) Occasionally an item can be obtained only from a supplier that quotes a minimum order price or quantity that either unreasonably exceeds stated quantity requirements or results in an unreasonable price for the quantity required. In these instances, the contracting officer should inform the requiring activity of all facts regarding the quotation or offer and ask it to confirm or alter its requirement. The file shall be documented to support the final action taken. (b) File documentation and retention. Keep documentation to a minimum. Purchasing offices shall retain data supporting purchases (paper or electronic) to the minimum extent and duration necessary for management review purposes (see subpart 4.8 ). The following illustrate the extent to which quotation or offer information should be recorded: (1) Oral solicitations. The contracting office should establish and maintain records of oral price quotations in order to reflect clearly the propriety of placing the order at the price paid with the supplier concerned. In most cases, this will consist merely of showing the names of the suppliers contacted and the prices and other terms and conditions quoted by each. (2) Written solicitations (see 2.101 ). For acquisitions not exceeding the simplified acquisition threshold, limit written records of solicitations or offers to notes or abstracts to show prices, delivery, references to printed price lists used, the supplier or suppliers contacted, and other pertinent data. (3) Special situations. Include additional statements, when applicable— (i) Explaining the absence of competition (see 13.106-1 for brand name purchases) if only one source is solicited and the acquisition does not exceed the simplified acquisition threshold (does not apply to an acquisition of utility services available from only one source); (ii) Supporting the award decision if other than price-related factors were considered in selecting the supplier; and (iii) Except for DoD, when using lowest price technically acceptable source selection process, justifying the use of such process. (c) Notification. For acquisitions that do not exceed the simplified acquisition threshold and for which automatic notification is not provided through an electronic commerce method that employs widespread electronic public notice, notification to unsuccessful suppliers shall be given only if requested or required by 5.301 . (d) Request for information. If a supplier requests information on an award that was based on factors other than price alone, a brief explanation of the basis for the contract award decision shall be provided (see 15.503 (b)(2)). (e) Taxpayer Identification Number . If an oral solicitation is used, the contracting officer shall ensure that the copy of the award document sent to the payment office is annotated with the contractor’s Taxpayer Identification Number (TIN) and type of organization (see 4.203 ), unless this information will be obtained from some other source ( e.g., centralized database). The contracting officer shall disclose to the contractor that the TIN may be used by the Government to collect and report on any delinquent amounts arising out of the contractor’s relationship with the Government ( 31 U.S.C. 7701(c)(3) ).