FAR 46.802—Definition.
Plain-English Summary
FAR 46.802 defines the term "high-value item" for use in the quality assurance subpart. The definition has two parts: the item must be a contract end item with a high unit cost, normally exceeding $100,000 per unit, and it must also be specifically designated by the contracting officer as a high-value item. The section gives examples of items that commonly fit the concept, including aircraft, aircraft engines, communication systems, computer systems, missiles, and ships. In practice, this definition matters because it identifies which end items may warrant heightened attention in inspection, acceptance, quality assurance, and related contract administration activities. It also makes clear that high unit cost alone is not enough; the contracting officer must make the designation for the item to fall within this subpart’s meaning. For contractors and contracting officers, the rule helps focus oversight on expensive, mission-critical deliverables where defects or failures can have significant operational and financial consequences.
Key Rules
End item requirement
The item must be a contract end item, meaning it is the final deliverable under the contract rather than a component or lower-level part. This limits the definition to completed items that are being acquired for delivery to the Government.
High unit cost threshold
The item must have a high unit cost, normally exceeding $100,000 per unit. The word "normally" signals that the threshold is a general benchmark, not an absolute mathematical rule in every case.
Contracting officer designation
An item is not a high-value item unless the contracting officer designates it as such. This designation is an affirmative administrative decision, not something that happens automatically based only on price or item type.
Illustrative examples
The regulation lists examples such as aircraft, aircraft engines, communication systems, computer systems, missiles, and ships. These examples show the kinds of expensive, complex end items the definition is intended to capture, but they do not limit the definition to only those items.
Responsibilities
Contracting Officer
Determine whether a contract end item meets the high-value item concept and formally designate it as a high-value item when appropriate. The contracting officer must use judgment based on unit cost and the nature of the item, and ensure the designation is applied consistently within the subpart.
Contractor
Recognize when the Government has designated an item as high-value and adjust quality, inspection, documentation, and delivery planning accordingly. The contractor should not assume an item is covered unless the contracting officer has made the designation.
Agency/Acquisition Team
Support the contracting officer by identifying candidate items that are expensive, complex, or mission-critical and by applying the designation in a way that aligns with contract administration and quality assurance needs.
Practical Implications
This definition is a trigger for heightened attention to expensive end items, so it can affect how quality assurance and acceptance are managed on the contract.
A common pitfall is assuming that any item over $100,000 automatically qualifies; the contracting officer must still designate it.
Another pitfall is confusing a component or subsystem with a contract end item; the definition applies to the final deliverable, not every expensive part.
Contractors should look for explicit designation in the contract or administration records and not rely only on the item’s market value or complexity.
Because the examples are illustrative, contracting officers should consider other high-cost end items that are functionally similar even if they are not listed by name.
Official Regulatory Text
High-value item , as used in this subpart, means a contract end item that- (1) Has a high unit cost (normally exceeding $100,000 per unit), such as an aircraft, an aircraft engine, a communication system, a computer system, a missile, or a ship, and (2) Is designated by the contracting officer as a high-value item.