FAR 36.606—Negotiations.
Plain-English Summary
FAR 36.606 explains how the contracting officer conducts negotiations after the architect-engineer (A-E) selection authority has made the final selection. It covers when negotiations may begin, how they must be conducted under FAR part 15, the order of negotiation with the most preferred firm first, and the need to request a proposal without restricting modern design methods. It also addresses the special A-E rule that the firm designing the project generally cannot receive the construction contract, the need to discuss and, where appropriate, pre-agree on computer-assisted design charges, and the importance of subcontracting arrangements because A-E selection is based on qualifications. Finally, it sets out the fallback process if negotiations fail: obtain a written final proposal revision, terminate negotiations with that firm, move to the next firm on the selection list, and, if all selected firms fail, refer the matter back to the selection authority for possible recommendation of additional firms. In practice, this section is the roadmap for turning a qualifications-based A-E selection into a workable contract while preserving fairness, compliance with A-E procurement rules, and the government’s ability to keep the procurement moving if the first choice cannot be reached.
Key Rules
Selection authorizes negotiations
Unless the selection authority says otherwise, the final selection gives the contracting officer authority to start negotiations. The contracting officer must then negotiate under FAR part 15, beginning with the most preferred firm on the final selection list and observing the fee limitation guidance in 15.404-4(c)(4)(i).
Request proposal carefully
The contracting officer should ordinarily request a proposal from the selected firm, but the solicitation must not accidentally block the firm from proposing modern design methods. This means the request should be written so it does not discourage or exclude approaches such as computer-assisted design.
No construction award to designer
The contracting officer must tell the selected firm that it cannot be awarded the construction contract for the project it designed, except where FAR 36.209 allows an exception. This protects the separation between design and construction roles unless a specific regulatory exception applies.
Address computer-assisted design charges
During negotiations, the contracting officer should try to reach advance agreement on any charges for computer-assisted design under 31.109. If the proposal does not include appropriate modern and cost-effective design methods, the contracting officer should raise that issue with the firm and negotiate it directly.
Subcontracting is a negotiation issue
Because A-E firms are selected based on qualifications, the extent of subcontracting matters and should be negotiated. The prescribed clause limits subcontracting to the firms agreed to during negotiations, so the contracting officer should identify and document acceptable subcontractors and outside associates or consultants.
Failure to agree triggers next firm
If a mutually satisfactory contract cannot be reached, the contracting officer must obtain a written final proposal revision, notify the firm that negotiations are terminated, and then move to the next firm on the final selection list. This process continues until a contract is negotiated or all selected firms are exhausted.
Escalate if all negotiations fail
If negotiations fail with every selected firm, the contracting officer must refer the matter to the selection authority. After consulting with the contracting officer about why a contract could not be negotiated, the selection authority may direct the evaluation board to recommend additional firms under 36.602.
Responsibilities
Selection Authority
Make the final selection of the most preferred firm and, unless otherwise specified, thereby authorize the contracting officer to begin negotiations. If negotiations fail with all selected firms, consult with the contracting officer and decide whether to direct the evaluation board to recommend additional firms.
Contracting Officer
Conduct negotiations under FAR part 15 starting with the most preferred firm; request a proposal without restricting modern design methods; inform the firm that it generally cannot receive the construction contract for the project it designed; seek advance agreement on computer-assisted design charges; negotiate subcontracting arrangements; obtain a written final proposal revision if negotiations fail; terminate negotiations with that firm; move to the next firm on the list; and refer the matter to the selection authority if all negotiations fail.
Selected A-E Firm
Submit a proposal and negotiate in good faith; ensure its proposal addresses appropriate modern and cost-effective design methods; agree to any subcontractors or outside associates/consultants that will be used; and, if negotiations fail, provide a written final proposal revision when requested.
Evaluation Board
If directed by the selection authority after all selected firms fail to produce a contract, recommend additional firms in accordance with 36.602.
Practical Implications
This section is the bridge between qualifications-based selection and price/terms negotiation, so the contracting officer must be careful not to reopen the technical selection decision while still reaching a workable contract.
A common pitfall is drafting the proposal request too narrowly and unintentionally discouraging modern design approaches, especially computer-assisted design or other cost-effective methods.
Another frequent issue is overlooking subcontractors and outside consultants; because the A-E clause limits subcontracting to agreed firms, the contracting officer should resolve these relationships early and document them clearly.
If negotiations stall, the contracting officer cannot simply keep bargaining indefinitely; the rule requires a written final proposal revision, formal termination of that round, and movement to the next ranked firm.
The prohibition on awarding construction to the designer is easy to miss, so the contracting officer should communicate it early to avoid unrealistic expectations and later disputes.
Official Regulatory Text
(a) Unless otherwise specified by the selection authority, the final selection authorizes the contracting officer to begin negotiations. Negotiations shall be conducted in accordance with part 15 of this chapter, beginning with the most preferred firm in the final selection (see 15.404-4 (c)(4)(i) on fee limitation). (b) The contracting officer should ordinarily request a proposal from the firm, ensuring that the solicitation does not inadvertently preclude the firm from proposing the use of modern design methods. (c) The contracting officer shall inform the firm that no construction contract may be awarded to the firm that designed the project, except as provided in 36.209 . (d) During negotiations, the contracting officer should seek advance agreement (see 31.109 ) on any charges for computer-assisted design. When the firm’s proposal does not cover appropriate modern and cost-effective design methods ( e.g., computer-assisted design), the contracting officer should discuss this topic with the firm. (e) Because selection of firms is based upon qualifications, the extent of any subcontracting is an important negotiation topic. The clause prescribed at 44.204 (b), Subcontractors and Outside Associates and Consultants (Architect-Engineer Services) (see 52.244-4 ), limits a firm’s subcontracting to firms agreed upon during negotiations. (f) If a mutually satisfactory contract cannot be negotiated, the contracting officer shall obtain a written final proposal revision from the firm, and notify the firm that negotiations have been terminated. The contracting officer shall then initiate negotiations with the next firm on the final selection list. This procedure shall be continued until a mutually satisfactory contract has been negotiated. If negotiations fail with all selected firms, the contracting officer shall refer the matter to the selection authority who, after consulting with the contracting officer as to why a contract cannot be negotiated, may direct the evaluation board to recommend additional firms in accordance with 36.602 .