FAR 16.703—Basic ordering agreements.
Plain-English Summary
FAR 16.703 explains what a basic ordering agreement (BOA) is, when it may be used, what it must contain, and how orders are placed under it. It covers the BOA’s legal status as a non-contract, the circumstances where it is appropriate for uncertain recurring requirements, and the limits on using it so it does not promise future business or restrict competition. The section also sets out required BOA contents, including pricing methods, delivery terms, authorized ordering activities, the point when an order becomes binding, dispute handling for unresolved pricing, and fast payment data when applicable. It requires annual review and revision of the BOA, explains how changes must be made, and states that changes do not retroactively affect prior orders. Finally, it governs order issuance, including competition requirements, justifications and approvals, synopsis rules, the use of OF 347 or another instrument, and the prohibition on authorizing work before prices are established except in limited urgent or ceiling-price situations. In practice, this section is about creating a flexible ordering framework for recurring but uncertain needs while preserving competition, pricing discipline, and proper contract formation.
Key Rules
BOA is not a contract
A basic ordering agreement is only a written understanding that sets terms for future orders; it does not itself bind the Government to buy anything. Each order must still be issued and become binding under the BOA’s stated rules.
Use for uncertain recurring needs
BOAs are appropriate when the Government expects a substantial number of similar requirements but cannot yet define exact items, quantities, or prices. They are intended to speed future ordering and can reduce lead time, inventory, and obsolescence.
No promise of future orders
The BOA may not state or imply that the Government will place future orders, and it may not be used to limit competition. It is a procedural tool, not a commitment or source-selection shortcut.
Required BOA contents
Each BOA must describe pricing methods, delivery terms or how they will be set, identify authorized ordering activities, state when an order becomes a binding contract, provide for disputes over unresolved pricing, and include fast payment data if fast payment procedures will apply.
Annual review and controlled changes
BOAs must be reviewed at least annually and revised as needed to stay consistent with the FAR, including any mandatory statutory changes. Changes must be made by modifying the BOA itself, not by changing individual orders, and revisions do not affect orders already issued.
Competition and approvals still apply
Before placing an order under a BOA, the contracting officer must obtain competition under FAR Part 6, ensure post-competition use of the BOA is not prejudicial to other offerors, and secure any required justifications, approvals, determinations, and findings as if the order were independently awarded.
Order form and synopsis requirements
Orders should be issued on OF 347 or another appropriate contractual instrument, incorporate the BOA by reference, cite any applicable 6.302 authority, and comply with synopsis requirements when required by FAR 5.201 and 5.203.
No work before pricing except limited cases
The contracting officer may not make a final commitment or authorize performance until prices are established unless the order has a ceiling price and either the BOA provides timely pricing procedures or the requirement is compelling and unusually urgent. Even then, pricing must be completed as soon as practicable and the entire order may not be priced retroactively.
Responsibilities
Contracting Officer
Determine whether a BOA is appropriate for the requirement, ensure the BOA contains all required terms, and place orders only in compliance with competition, justification, synopsis, and pricing rules. The contracting officer must also avoid authorizing performance before prices are set unless a permitted exception applies, and must ensure the BOA is reviewed and revised as required.
Agency / Contracting Activity / Contracting Office
Negotiate and execute the BOA with the contractor, identify the Government activities authorized to issue orders, and maintain the BOA so it remains current with FAR and statutory requirements. The agency must also ensure the BOA is not used to promise future business or restrict competition.
Contractor
Accept that the BOA is only an agreement framework, not a guaranteed source of work, and be prepared to negotiate pricing and delivery terms for individual orders. The contractor must perform only when an order becomes binding under the BOA’s stated terms and should understand that unresolved pricing disputes are handled under the Disputes clause.
Government Activities Authorized Under the BOA
Issue orders only for supplies or services covered by the BOA and only within the authority granted in the agreement. These activities must follow the BOA’s pricing, delivery, and binding-order rules and comply with applicable competition and synopsis requirements.
Practical Implications
BOAs are useful when the Government expects repeated buys but cannot define exact quantities or prices up front, especially for support parts and similar recurring needs. They can save time later, but only if the BOA is drafted carefully and kept current.
A common mistake is treating a BOA like a contract or like a guaranteed source of future work. That can create legal and competition problems, so the document must clearly say it is not a commitment to order.
Another frequent pitfall is authorizing work before price is established. Unless a valid ceiling-price/urgent-need exception applies, the contracting officer should not let performance start until pricing is set.
BOA changes must be made to the BOA itself, not by informal changes in individual orders. Also, revisions do not change orders already issued, so order-level and BOA-level documents must stay aligned.
Competition and justification rules still matter for each order. Using a BOA does not eliminate Part 6 requirements, and the contracting officer must ensure the BOA is not used to bypass competition or prejudice other offerors.
Official Regulatory Text
(a) Description . A basic ordering agreement is a written instrument of understanding, negotiated between an agency, contracting activity, or contracting office and a contractor, that contains (1) terms and clauses applying to future contracts (orders) between the parties during its term, (2)a description, as specific as practicable, of supplies or services to be provided, and (3) methods for pricing, issuing, and delivering future orders under the basic ordering agreement. A basic ordering agreement is not a contract. (b) Application . A basic ordering agreement may be used to expedite contracting for uncertain requirements for supplies or services when specific items, quantities, and prices are not known at the time the agreement is executed, but a substantial number of requirements for the type of supplies or services covered by the agreement are anticipated to be purchased from the contractor. Under proper circumstances, the use of these procedures can result in economies in ordering parts for equipment support by reducing administrative lead-time, inventory investment, and inventory obsolescence due to design changes. (c) Limitations . A basic ordering agreement shall not state or imply any agreement by the Government to place future contracts or orders with the contractor or be used in any manner to restrict competition. (1) Each basic ordering agreement shall- (i) Describe the method for determining prices to be paid to the contractor for the supplies or services; (ii) Include delivery terms and conditions or specify how they will be determined; (iii) List one or more Government activities authorized to issue orders under the agreement; (iv) Specify the point at which each order becomes a binding contract ( e.g., issuance of the order, acceptance of the order in a specified manner, or failure to reject the order within a specified number of days); (v) Provide that failure to reach agreement on price for any order issued before its price is established (see paragraph (d)(3) of this section) is a dispute under the Disputes clause included in the basic ordering agreement; and (vi) If fast payment procedures will apply to orders, include the special data required by 13.403 . (2) Each basic ordering agreement shall be reviewed annually before the anniversary of its effective date and revised as necessary to conform to the requirements of this regulation. Basic ordering agreements may need to be revised before the annual review due to mandatory statutory requirements. A basic ordering agreement shall be changed only by modifying the agreement itself and not by individual orders issued under it. Modifying a basic ordering agreement shall not retroactively affect orders previously issued under it. (d) Orders . A contracting officer representing any Government activity listed in a basic ordering agreement may issue orders for required supplies or services covered by that agreement. (1) Before issuing an order under a basic ordering agreement, the contracting officer shall- (i) Obtain competition in accordance with part 6 ; (ii) If the order is being placed after competition, ensure that use of the basic ordering agreement is not prejudicial to other offerors; and (iii) Sign or obtain any applicable justifications and approvals, and any determination and findings, and comply with other requirements in accordance with 1.602-1 (b), as if the order were a contract awarded independently of a basic ordering agreement. (2) Contracting officers shall- (i) Issue orders under basic ordering agreements on Optional Form (OF) 347 , Order for Supplies or Services, or on any other appropriate contractual instrument; (ii) Incorporate by reference the provisions of the basic ordering agreement; (iii) If applicable, cite the authority under 6.302 in each order; and (iv) Comply with 5.203 when synopsis is required by 5.201 . (3) The contracting officer shall neither make any final commitment nor authorize the contractor to begin work on an order under a basic ordering agreement until prices have been established, unless the order establishes a ceiling price limiting the Government’s obligation and either- (i) The basic ordering agreement provides adequate procedures for timely pricing of the order early in its performance period; or (ii) The need for the supplies or services is compelling and unusually urgent ( i.e., when the Government would be seriously injured, financially or otherwise, if the requirement is not met sooner than would be possible if prices were established before the work began). The contracting officer shall proceed with pricing as soon as practical. In no event shall an entire order be priced retroactively.