FAR 37.105—Competition in service contracting.
Plain-English Summary
FAR 37.105 explains how competition requirements apply to service contracts. It addresses two main topics: when service contracts must be awarded through sealed bidding, and how the general competition rules in statute and FAR part 6 apply to service acquisitions. The section makes clear that services are not exempt from competition requirements simply because they are services; instead, the normal competition framework applies unless another statute says otherwise. It also recognizes that competition for services can be achieved in different ways depending on the nature of the service, so the government is not limited to price-only competition. In practice, this section tells contracting officers to choose a contracting method that satisfies competition rules while fitting the service being bought, and it reminds contractors that service procurements may be competed under a variety of evaluation approaches, not just lowest price.
Key Rules
Sealed bidding when appropriate
Unless a statute provides otherwise, service contracts must be awarded through sealed bidding when the conditions in FAR 6.401(a) are met. The cross-reference to FAR 6.401(b) means the usual exceptions and limitations on sealed bidding still apply.
Competition rules fully apply
The statutory and FAR part 6 requirements for competition apply to service contracts just as they do to other acquisitions. Agencies cannot avoid competition requirements simply because the requirement is for services.
Competition method may vary
The method used to provide competition for services may differ based on the type of service being acquired. The regulation allows flexibility in how competition is structured so long as the competition requirement is satisfied.
Not limited to price
Competition for service contracts is not necessarily confined to price competition. Agencies may use other competitive approaches, such as best-value or technical evaluation methods, when appropriate under the acquisition strategy and applicable rules.
Responsibilities
Contracting Officer
Determine whether the service requirement meets the conditions for sealed bidding under FAR 6.401(a), apply the competition requirements of statute and FAR part 6, and select a competition method suited to the service being acquired while remaining within legal and regulatory limits.
Agency
Structure service acquisitions to ensure full and proper competition, use an acquisition approach that fits the service requirement, and avoid treating service contracts as exempt from competition rules unless a statute specifically allows it.
Contractor
Understand that service procurements may be competed under different evaluation methods, respond to solicitations accordingly, and not assume that award will be based solely on lowest price.
Practical Implications
This section is a reminder that service contracts are subject to the same core competition principles as other federal procurements.
Contracting officers must first ask whether sealed bidding is required or appropriate, then determine whether another competitive method is better suited to the service.
A common pitfall is assuming that services can be acquired with less competition or outside FAR part 6 requirements; this section says the opposite.
Another common mistake is treating competition for services as automatically price-driven; agencies may use technical, past performance, or best-value considerations when allowed.
For contractors, the practical takeaway is to read service solicitations carefully because the basis for award may vary widely depending on the service and acquisition strategy.
Official Regulatory Text
(a) Unless otherwise provided by statute, contracts for services shall be awarded through sealed bidding whenever the conditions in 6.401 (a) are met, (except see 6.401 (b)). (b) The provisions of statute and part 6 of this regulation requiring competition apply fully to service contracts. The method of contracting used to provide for competition may vary with the type of service being acquired and may not necessarily be limited to price competition.