FAR 26.204—Justification for expenditures to other than local firms.
Plain-English Summary
FAR 26.204 implements a post-disaster documentation requirement for emergency response contracting when Federal funds are spent on a contract that is not awarded to a local firm after a Presidential declaration of a major disaster or emergency. The section covers the statutory basis in 42 U.S.C. 5150(b)(1), the need for a written justification in the contract file, the factors that must be considered in that justification, the option to prepare the justification on an individual or class basis, and the requirement that the contracting officer approve it. In practice, this rule is meant to ensure that agencies can explain why a non-local firm was used when local firms might otherwise be preferred or expected in disaster response. It also creates a record showing that the decision was tied to the actual emergency needs—such as protecting life, caring for victims, and safeguarding property—rather than convenience alone. For contractors and contracting officers, the section matters because it affects award documentation, file support, and the defensibility of emergency procurement decisions during major disasters and emergencies.
Key Rules
Written justification required
If Federal funds are expended under an emergency response contract not awarded to a local firm after a Presidential major disaster or emergency declaration, the contract file must contain a written justification. This is a documentation requirement tied to the use of non-local firms in emergency response work.
Consider disaster scope and needs
The justification must address the scope of the disaster or emergency and the immediate requirements for supplies and services. It should show how the procurement supports protecting life, caring for victims, and protecting property.
Applies after Presidential declaration
The rule is triggered only subsequent to a Presidential declaration of a major disaster or emergency. The justification requirement is therefore linked to formally declared disaster/emergency response actions.
May be individual or class-based
The justification can be prepared for a single contract or for a class of contracts. This allows agencies to document a broader emergency procurement approach when the same rationale applies across multiple awards.
Contracting officer approval required
The contracting officer must approve the justification. Approval is not automatic; the contracting officer must review the written support and accept it before the file is complete.
Responsibilities
Contracting Officer
Prepare or ensure preparation of the written justification, review whether it adequately addresses the disaster scope and immediate needs, approve the justification, and ensure it is placed in the contract file.
Agency/Contracting Activity
Maintain contract file documentation showing compliance with the justification requirement for emergency response contracts awarded to non-local firms after a Presidential declaration.
Program/Requirements Personnel
Provide the factual basis for the justification, including the emergency requirements, the need for supplies or services, and how the procurement supports life safety, victim care, and property protection.
Contractor
No direct approval duty under this section, but a contractor may need to support the agency’s understanding of its locality, availability, or capability if requested during the emergency procurement process.
Practical Implications
Contracting officers should not treat non-local emergency awards as routine; the file must show why the award was justified in light of the disaster and immediate mission needs.
The justification should be specific enough to explain the emergency context and why the selected source was appropriate, not just a generic statement that local firms were unavailable.
Class justifications can save time during large disasters, but they still need to be grounded in the actual circumstances and approved by the contracting officer.
A common pitfall is failing to place the justification in the contract file promptly, which can create audit and compliance problems later.
Another risk is using the rule as a blanket preference for non-local firms; the section is about documenting the necessity of the decision, not bypassing local participation without explanation.
Official Regulatory Text
(a) 42U.S.C .5150(b)(1) requires that, subsequent to any Presidential declaration of a major disaster or emergency, any expenditure of Federal funds, under an emergency response contract not awarded to a local firm, must be justified in writing in the contract file. The justification should include consideration for the scope of the major disaster or emergency and the immediate requirements or needs of supplies and services to ensure life is protected, victims are cared for, and property is protected. (b) The justification may be made on an individual or class basis. The contracting officer approves the justification.