FAR 50.101-2—Policy.
Plain-English Summary
FAR 50.101-2 states the policy limits for using the extraordinary contractual relief authority granted by Public Law 85-804, which is implemented in FAR subpart 50.1. This section covers three core topics: first, the authority may not be used in a way that encourages carelessness or laxity by defense contractors or others supporting the defense effort; second, the authority may not be used when the agency already has adequate legal authority available; and third, when relief is available under the Contract Disputes Act and FAR part 33—such as rescission or reformation for mutual mistake—part 33 must be used instead of subpart 50.1. The section also requires that authorized actions be handled as quickly as practicable, but only with the care, restraint, and sound judgment appropriate to such an extraordinary remedy. In practice, this means Public Law 85-804 is a last-resort tool, not a routine contract administration mechanism, and contracting officers must screen for other legal remedies before considering it. The section is designed to preserve the exceptional nature of this authority, prevent misuse, and ensure that disputes or contract corrections are processed under the normal disputes framework whenever that framework applies.
Key Rules
No encouragement of laxity
Public Law 85-804 authority may not be used in a way that rewards or encourages carelessness, laxity, or poor performance by persons engaged in the defense effort. Relief should not create a moral hazard or signal that contractors can ignore normal diligence because extraordinary relief will later fix the problem.
Use only when no adequate authority exists
The authority may not be relied on if the agency already has adequate legal authority to address the issue. This makes subpart 50.1 a residual remedy, available only after the contracting officer determines that ordinary statutory, regulatory, or contractual remedies are insufficient.
Act promptly but cautiously
Authorized actions under Pub. L. 85-804 must be completed as expeditiously as practicable. Speed is required, but not at the expense of careful review, restraint, and sound judgment, because the authority is extraordinary and can affect the public fisc and procurement integrity.
Use part 33 when it applies
Relief now available under the Contract Disputes Act, including rescission or reformation for mutual mistake, must be pursued under FAR part 33 rather than subpart 50.1. The regulation expressly directs use of part 33 in preference to subpart 50.1 for those matters.
Seek legal advice in doubtful cases
If there is uncertainty about whether part 33 applies, the contracting officer should obtain legal advice. This helps ensure the correct procedural path is used and reduces the risk of granting relief under the wrong authority.
Responsibilities
Contracting Officer
Screen requests for extraordinary relief to determine whether another adequate legal basis exists, whether the matter belongs under FAR part 33, and whether using Pub. L. 85-804 would avoid or encourage laxity. The contracting officer must process authorized actions promptly, exercise restraint and sound judgment, and seek legal advice when the proper authority is unclear.
Agency
Ensure that Pub. L. 85-804 is used only as a last-resort authority and only within the limits of the statute and FAR subpart 50.1. The agency must maintain controls that prevent misuse of extraordinary relief and ensure that normal disputes and contract correction remedies are used when available.
Contractor
Present requests for relief only when a legitimate basis exists and not as a substitute for ordinary contract performance, diligence, or dispute procedures. Contractors should understand that extraordinary relief is not intended to excuse avoidable mistakes or poor administration and may be unavailable if other legal remedies exist.
Legal Counsel
Advise the contracting officer on whether the issue falls under FAR part 33 or subpart 50.1, and whether the agency has adequate alternative authority. Counsel should help ensure the proposed action is legally supportable and consistent with the limited purpose of Pub. L. 85-804.
Practical Implications
This section makes Pub. L. 85-804 a narrow, exceptional remedy, so users should always check for ordinary contract remedies first, especially under FAR part 33.
A common pitfall is trying to use extraordinary relief to fix problems that are actually disputes, mutual mistakes, or other issues already covered by the Contract Disputes Act.
Contracting officers should document why no adequate alternative authority exists and why the requested relief does not reward carelessness or laxity.
Because the rule requires expeditious action, agencies should move requests through review quickly, but not skip legal review or factual development.
When there is any doubt about whether a matter belongs under part 33, the safest course is to pause and obtain legal advice before proceeding under subpart 50.1.
Official Regulatory Text
(a) The authority conferred by Pub. L. 85-804 may not- (1) Be used in a manner that encourages carelessness and laxity on the part of persons engaged in the defense effort; or (2) Be relied upon when other adequate legal authority exists within the agency. (b) Actions authorized under Pub. L. 85-804 shall be accomplished as expeditiously as practicable, consistent with the care, restraint, and exercise of sound judgment appropriate to the use of such extraordinary authority. (c) Certain kinds of relief previously available only under Pub. L. 85-804; e.g. , rescission or reformation for mutual mistake, are now available under the authority of 41 U.S.C. chapter 71 , Contract Disputes. In accordance with paragraph (a)(2) of this subsection, part 33 must be followed in preference to subpart 50.1 for such relief. In case of doubt as to whether part 33 applies, the contracting officer should seek legal advice.