FAR 18.112—Letter contracts.
Plain-English Summary
FAR 18.112 is a very short emergency-procurement cross-reference that addresses one topic: the use of letter contracts when performance must start immediately. Its purpose is to recognize that, in urgent situations, the government may need to authorize work before all contract terms, pricing details, or final paperwork are fully completed. In practice, this section does not create a separate letter-contract authority; it points readers to FAR 16.603, which contains the actual rules for using letter contracts, including when they are appropriate and how they must be definitized. For contracting officers, the section signals that immediate-start requirements may justify a temporary contractual instrument, but only within the limits of the FAR. For contractors, it means they may be asked to begin work quickly under a preliminary agreement, but they should expect later negotiation and formalization of the final contract terms.
Key Rules
Immediate performance only
Letter contracts may be used when contract performance must begin immediately. The trigger is urgency, not convenience, and the government should use this approach only when waiting for a fully definitized contract would defeat the need for prompt performance.
See FAR 16.603
This section is only a cross-reference. The substantive requirements for letter contracts are in FAR 16.603, which governs when they may be used, what they must contain, and how they are later definitized.
Temporary, not final
A letter contract is a preliminary contractual instrument used to authorize work before final terms are settled. It is not a substitute for completing the contracting process, and the parties must later convert it into a definitive contract.
Responsibilities
Contracting Officer
Determine whether immediate performance is truly necessary, ensure the use of a letter contract is consistent with FAR 16.603, and move promptly to definitize the agreement into a final contract with appropriate terms and pricing.
Contractor
Begin performance only to the extent authorized, track costs and work performed carefully, and participate in definitization negotiations so the temporary arrangement is converted into a final contract.
Agency
Support the urgent requirement with proper justification and ensure the procurement action follows the letter-contract procedures and approval requirements applicable under FAR 16.603 and agency policy.
Practical Implications
This section is a warning flag for urgent acquisitions: if work must start immediately, the contracting team may need a letter contract instead of waiting for a fully signed definitive contract.
The biggest risk is treating a letter contract like a finished deal; the parties still need to negotiate and document final terms, scope, and price.
Contractors should watch the authorized scope carefully, because work outside the temporary authorization can create payment and authority disputes.
Contracting officers should document why immediate performance is necessary and should not use a letter contract as a shortcut for poor planning.
Because this section points to FAR 16.603, users must read both provisions together to understand the full legal and procedural requirements.
Official Regulatory Text
Letter contracts may be used when contract performance must begin immediately. (See 16.603 .)