FAR 34.005-3—Concept exploration contracts.
Plain-English Summary
FAR 34.005-3 addresses how agencies should structure and continue concept exploration contracts in major system acquisition. It covers four main ideas: keeping concept exploration contracts relatively short in duration, setting them at planned dollar levels, using them to refine the proposed concept and reduce technical uncertainty, ensuring the scope of work matches the Government’s planned budget for the phase, and deciding whether to award follow-on contracts during the exploration phase. In practice, this section is meant to prevent agencies from overcommitting too early, while still allowing promising concepts to be explored efficiently and economically. It gives contracting officers and program managers a framework for controlling risk, limiting exposure, and making incremental funding and award decisions based on technical progress and affordability. For contractors, it signals that concept exploration work is expected to be tightly scoped, budget-aware, and subject to continued performance review before additional work is awarded.
Key Rules
Short, limited-duration contracts
Whenever practicable, concept exploration contracts should be for relatively short periods. The intent is to avoid locking the Government into long commitments before the concept has been sufficiently tested and refined.
Planned dollar levels
These contracts should be structured at planned dollar levels, meaning the contract value should align with the amount the Government expects to spend during the exploration phase. This helps control cost growth and keeps the effort within approved funding expectations.
Refine the concept
The purpose of concept exploration work is to improve the proposed concept and reduce technical uncertainties. The contract should therefore focus on analysis, testing, and other activities that help determine whether the concept is viable.
Scope must match budget
The scope of work for the exploration phase must be consistent with the Government’s planned budget for that phase. Agencies should not define a broader effort than can reasonably be supported by the available funding.
Follow-on awards are conditional
Follow-on contracts for exploration tasks may be awarded only while the concept remains promising, the contractor’s progress is acceptable, and it is economically practicable to continue. Continued work is not automatic; it depends on performance, technical merit, and cost reasonableness.
Responsibilities
Contracting Officer
Structure concept exploration contracts as short-term, budget-aligned efforts whenever practicable, and ensure any follow-on award decisions are based on the concept’s promise, the contractor’s progress, and economic practicability.
Program Manager / Technical Team
Define a scope of work that focuses on refining the concept and reducing technical uncertainty, and keep the work aligned with the planned budget for the phase.
Agency
Establish and maintain a planned budget for the concept exploration phase and ensure acquisition planning supports incremental, controlled exploration rather than premature commitment to a full solution.
Contractor
Perform the exploration work efficiently, demonstrate acceptable progress, and provide the technical information needed to show whether the concept remains promising for possible follow-on work.
Practical Implications
This section pushes agencies to use short, controlled contracts instead of long exploratory commitments, which reduces risk if the concept proves unworkable.
Contractors should expect close scrutiny of technical progress and should not assume follow-on work will be awarded automatically.
A common pitfall is writing a scope that is broader than the phase budget can support, which can create funding and performance problems.
Another pitfall is treating concept exploration like a production or development contract; the focus here is uncertainty reduction, not full-scale execution.
Contracting officers should document the basis for continuing or stopping follow-on work, especially when the concept is no longer promising or costs are no longer economical.
Official Regulatory Text
Whenever practicable, contracts to be performed during the concept exploration phase shall be for relatively short periods, at planned dollar levels. These contracts are to refine the proposed concept and to reduce the concept’s technical uncertainties. The scope of work for this phase of the program shall be consistent with the Government’s planned budget for the phase. Follow-on contracts for such tasks in the exploration phase shall be awarded as long as the concept approach remains promising, the contractor’s progress is acceptable, and it is economically practicable to do so.