FAR 13.302-2—Unpriced purchase orders.
Plain-English Summary
FAR 13.302-2 explains when and how a contracting office may use an unpriced purchase order under simplified acquisition procedures. It covers the definition of an unpriced purchase order, the limited situations in which it may be used, the requirement that pricing be impractical to obtain before award, the specific types of purchases that qualify (repairs requiring disassembly, sole-source material with costs not readily established, and competitively priced supplies or services with unknown exact prices), and the administrative controls that must accompany issuance. It also addresses the form of the order, allowing paper or electronic issuance, and requires a realistic monetary limitation on each order or line item to control the Government’s obligation until firm pricing is established. Finally, it requires follow-up to obtain timely pricing and review of the invoice price before payment, tying the rule to invoice reasonableness under FAR 13.106-3(a). In practice, this section is designed to let agencies move quickly when exact pricing cannot be known up front, while still protecting appropriated funds, preventing open-ended commitments, and ensuring the final price is reviewed and justified before payment.
Key Rules
Unpriced order definition
An unpriced purchase order is a supply or service order issued before the price is established. The Government is committing to buy, but the exact amount owed is determined later when pricing becomes available.
Use only in limited cases
The authority is narrow: the contracting officer may use an unpriced purchase order only when obtaining pricing in advance is impractical and the purchase fits one of the listed categories. It is not a general substitute for normal competition or price negotiation.
Repairs needing disassembly
One permitted use is for repairs to equipment that must be taken apart before the nature and extent of the repair can be determined. This recognizes that the Government may not know the scope or cost until inspection occurs.
Single-source or uncertain-cost items
Another permitted use is for material available from only one source when cost cannot readily be established, or for supplies and services with known competitive pricing but unknown exact prices, such as miscellaneous repair parts or maintenance agreements.
Monetary limit required
Each unpriced purchase order must include a realistic monetary limitation, either by line item or for the total order. That limit is the Government’s obligated amount until the firm price is set, so it must be reasonable and supportable.
Follow-up and timely pricing
The contracting office must actively follow up on each unpriced order to ensure pricing is established promptly. This is an administrative control meant to prevent orders from remaining unresolved indefinitely.
Invoice review before payment
Before paying, the contracting officer or designated representative must review the invoice price and process payment only if the price is reasonable under FAR 13.106-3(a). This creates a final check against overpayment or unsupported charges.
Paper or electronic issuance
Unpriced purchase orders may be issued either on paper or electronically. The rule is format-neutral, so agencies may use modern procurement systems as long as the substantive requirements are met.
Responsibilities
Contracting Officer
Determine that pricing in advance is impractical and that the purchase fits one of the permitted categories. Set a realistic monetary limitation, ensure the order is properly issued, follow up for timely pricing, and review the invoice price for reasonableness before payment.
Contracting Office
Maintain administrative oversight of unpriced purchase orders, track outstanding orders, and ensure follow-up actions occur so firm pricing is obtained without undue delay.
Contracting Officer’s Designated Representative
When delegated, review the invoice price for reasonableness under FAR 13.106-3(a) and process the invoice for payment if the price is reasonable.
Contractor
Perform the ordered supplies or services, provide pricing when it becomes available, and submit invoices consistent with the eventual firm price and the terms of the order.
Agency
Use unpriced purchase orders only within the limited circumstances allowed by the FAR and ensure internal controls exist to monitor obligations, pricing, and payment review.
Practical Implications
This authority is useful when the Government truly cannot know the price up front, but it should be used sparingly because it creates a temporary obligation without a firm final price.
A common pitfall is using an unpriced purchase order as a convenience when pricing could have been obtained in advance; that can create audit and compliance issues.
The monetary limitation matters a lot: if it is set too high, the Government may over-obligate funds; if too low, the order may not cover the eventual price and require corrective action.
Follow-up is not optional. Contracting offices should track these orders closely so they do not linger unresolved, especially for repairs and maintenance work where final pricing can be delayed.
Before payment, someone must actually assess whether the invoice price is reasonable; simply receiving an invoice is not enough to justify payment.
Official Regulatory Text
(a) An unpriced purchase order is an order for supplies or services, the price of which is not established at the time of issuance of the order. (b) An unpriced purchase order may be used only when- (1) It is impractical to obtain pricing in advance of issuance of the purchase order; and (2) The purchase is for- (i) Repairs to equipment requiring disassembly to determine the nature and extent of repairs; (ii) Material available from only one source and for which cost cannot readily be established; or (iii) Supplies or services for which prices are known to be competitive, but exact prices are not known ( e.g., miscellaneous repair parts, maintenance agreements). (c) Unpriced purchase orders may be issued on paper or electronically. A realistic monetary limitation, either for each line item or for the total order, shall be placed on each unpriced purchase order. The monetary limitation shall be an obligation subject to adjustment when the firm price is established. The contracting office shall follow up on each order to ensure timely pricing. The contracting officer or the contracting officer’s designated representative shall review the invoice price and, if reasonable (see 13.106-3 (a)), process the invoice for payment.