FAR 17.503—Ordering procedures.
Plain-English Summary
FAR 17.503 explains the basic ordering procedures for interagency acquisitions—when one Government agency places an order with another agency for supplies or services. It covers the threshold requirement to follow the proper interagency acquisition procedures in FAR 17.502-1 and, for Economy Act orders, FAR 17.502-2; the content and form of the order itself; how the agencies should handle disagreements, including possible third-party forums; and what additional steps apply when the servicing agency must award a contract. It also addresses who is responsible for preparing justifications and approvals or determinations and findings (J&As or D&Fs), how the requesting agency must support those actions, and how legal, funding, competition, and contract administration requirements are allocated between the agencies. Finally, it includes special rules for nonsponsoring agencies using FFRDCs, including sponsor consent, scope limitations, and documentation that the work will not place the FFRDC in direct competition with private industry. In practice, this section is about making sure interagency buys are properly authorized, documented, competed, funded, and administered so the Government avoids invalid orders, improper charges, and disputes between agencies.
Key Rules
Follow interagency procedures first
Before placing an order with another Government agency, the requesting agency must follow FAR 17.502-1 and, if the order is under the Economy Act, FAR 17.502-2 as well. This means the order cannot be treated like a routine purchase; the interagency authority and required findings must be in place first.
Use a mutually acceptable order format
The order may be placed on any form or document both agencies accept, but it should clearly state the supplies or services, delivery requirements, funds citation, payment provision, and any needed acquisition authority. The goal is to ensure both agencies understand the requirement, funding, and legal basis for the transaction.
Agree on dispute resolution procedures
The requesting and servicing agencies should establish procedures for resolving disagreements that arise during interagency acquisitions. If they want to use a third-party forum, the third party’s written consent should be obtained in advance.
Servicing agency issues required J&As or D&Fs
If the interagency acquisition requires the servicing agency to award a contract and a law or regulation requires a justification and approval or a D&F, the servicing agency must prepare and issue it. The requesting agency must provide the information needed to support that document.
Requesting agency supports funding conditions
The requesting agency must provide any additional assistance needed to satisfy conditions or limitations tied to its funds, including special contract terms or other information. This ensures the servicing agency can structure the contract in a way that complies with the requesting agency’s appropriations law requirements.
Servicing agency must meet legal and competition rules
The servicing agency is responsible for all other legal and regulatory requirements applicable to the contract, including having statutory authority for the action and complying with FAR Part 6 competition requirements. If the servicing agency is not subject to the FAR, the requesting agency must verify that the contract protects the Government from improper charges and that adequate contract administration will occur.
FFRDC use is limited for nonsponsoring agencies
A nonsponsoring Federal agency may use an FFRDC only if the sponsoring agreement allows work from non-sponsoring agencies, the sponsor accepts the work, and the work fits within the FFRDC’s purpose, mission, scope, or special competency. The nonsponsoring agency must also document that the work will not put the FFRDC in direct competition with domestic private industry.
Responsibilities
Requesting Agency
Follow the required interagency acquisition procedures before placing the order; provide the order information, funds citation, payment terms, and any needed acquisition authority; supply information needed for any J&A or D&F; furnish special terms or other assistance needed to comply with funding restrictions; and, when the servicing agency is outside the FAR, verify protections against inappropriate charges and adequate contract administration.
Servicing Agency
Accept and process the order using a mutually acceptable document; prepare and issue any required J&A or D&F when it is the agency that must award the contract; ensure the contract action is legally authorized and complies with competition requirements and other applicable laws and regulations; and administer the resulting contract appropriately.
Both Agencies
Agree in advance on procedures for resolving disputes that may arise under the interagency acquisition, including whether to use a third-party forum and obtaining written consent from that third party if used.
Sponsoring Agency of an FFRDC
Determine whether its FFRDC sponsoring agreement permits work from nonsponsoring agencies and decide whether to accept the proposed work, consistent with the FFRDC’s mission and scope.
Nonsponsoring Federal Agency
Use the FFRDC only when the sponsoring agreement allows it, ensure the work fits within the FFRDC’s authorized purpose and scope, provide documentation that the work will not place the FFRDC in direct competition with domestic private industry, and comply with any applicable competition procedures.
Practical Implications
Interagency orders need more than a funding line and a request; they require a clear legal and procedural foundation, especially under the Economy Act.
A common mistake is assuming the servicing agency handles everything. In reality, the requesting agency often must supply the justification, funding restrictions, and other support needed to make the action lawful.
The order document should be detailed enough to avoid later disputes about scope, delivery, payment, and authority; vague interagency orders can create billing and performance problems.
If the servicing agency is not a FAR agency, the requesting agency cannot assume FAR protections will automatically apply; it must verify pricing protections and contract administration safeguards.
FFRDC use by nonsponsoring agencies is tightly controlled and often overlooked. Agencies should confirm sponsor permission and scope before relying on an FFRDC, or they risk an improper use of a federally funded resource.
Official Regulatory Text
(a) Before placing an order for supplies or services with another Government agency, the requesting agency shall follow the procedures in 17.502-1 and, if under the Economy Act, also 17.502-2 . (b) The order may be placed on any form or document that is acceptable to both agencies. The order should include- (1) A description of the supplies or services required; (2) Delivery requirements; (3) A funds citation; (4) A payment provision (see 17.502-2 (d) for Economy Act orders); and (5) Acquisition authority as may be appropriate (see 17.503 (d)). (c) The requesting and servicing agencies should agree to procedures for the resolution of disagreements that may arise under interagency acquisitions, including, in appropriate circumstances, the use of a third-party forum. If a third party is proposed, consent of the third party should be obtained in writing. (d) When an interagency acquisition requires the servicing agency to award a contract, the following procedures also apply: (1) If a justification and approval or a D&F (other than the requesting agency’s D&F required in 17.502-2 (c)) is required by law or regulation, the servicing agency shall execute and issue the justification and approval or D&F. The requesting agency shall furnish the servicing agency any information needed to make the justification and approval or D&F. (2) The requesting agency shall also be responsible for furnishing other assistance that may be necessary, such as providing information or special contract terms needed to comply with any condition or limitation applicable to the funds of the requesting agency. (3) The servicing agency is responsible for compliance with all other legal or regulatory requirements applicable to the contract, including- (i) Having adequate statutory authority for the contractual action; and (ii) Complying fully with the competition requirements of part 6 (see 6.002 ). However, if the servicing agency is not subject to the Federal Acquisition Regulation, the requesting agency shall verify that contracts utilized to meet its requirements contain provisions protecting the Government from inappropriate charges (for example, provisions mandated for FAR agencies by part 31 ), and that adequate contract administration will be provided. (e) Nonsponsoring Federal agencies may use a Federally Funded Research and Development Center (FFRDC) only if the terms of the FFRDC’s sponsoring agreement permit work from other than a sponsoring agency. Work placed with the FFRDC is subject to the acceptance by the sponsor and must fall within the purpose, mission, general scope of effort, or special competency of the FFRDC. (See 35.017 ; see also 6.302 for procedures to follow where using other than full and open competition.) The nonsponsoring agency shall provide to the sponsoring agency necessary documentation that the requested work would not place the FFRDC in direct competition with domestic private industry.