FAR 50.102—Delegation of and limitations on exercise of authority.

Delegation of authority.

FAR 50.102-1 explains how authority under Public Law 85-804 and Executive Order 10789 may be delegated within an agency, and it sets strict limits on how far that authority can be pushed down the chain of command. The section covers four main topics: the general rule that delegation must be in writing, the requirement that delegated authority be assigned high enough to promote uniformity of action, the prohibition on delegating authority to approve requests to obligate the Government above $90,000 below the secretarial level, the restriction on delegating authority to approve no-consideration amendments that increase contract or unit price, and the special rule for indemnification of unusually hazardous or nuclear risks, including subcontract coverage. In practice, this section is about controlling extraordinary contract actions that can create significant financial exposure or policy inconsistency, so the Government reserves these decisions to senior officials unless a narrow exception applies. It matters because these authorities are not routine contracting actions; they involve exceptional relief, price increases without consideration, or indemnification commitments that can bind the Government to substantial risk. Contractors should understand that approvals under this authority are limited, highly controlled, and often require senior-level review, while agencies must ensure their internal delegations comply with the FAR’s ceiling on delegation.

Contract adjustment boards.

FAR 50.102-2 explains how an agency may create a contract adjustment board to handle certain extraordinary contract actions under FAR subpart 50.1. It covers the agency head’s authority to establish the board, the board’s power to approve, authorize, and direct appropriate action, and its ability to make the determinations and findings needed to support those actions. The section also addresses the finality of board decisions by stating they are not subject to appeal, while still allowing the board to reconsider and change its own prior decisions. In addition, it gives the board control over its own procedures and broad authority to take whatever action is necessary or appropriate to carry out its mission. Practically, this means agencies can set up a specialized internal decision-making body to move quickly and consistently on contract adjustment matters without going through ordinary appeal channels, which can be important when dealing with urgent or exceptional contract situations.

Limitations on exercise of authority.

FAR 50.102-3 sets the limits on using the extraordinary authority available under Public Law 85-804 and related indemnification authority. It explains what this authority cannot be used for, including cost-plus-a-percentage-of-cost contracting, violating statutory profit or fee limits, avoiding full and open competition, or waiving legally required bonds. It also establishes threshold conditions for approving contracts, amendments, modifications, and informal commitments, such as a finding that the action will facilitate national defense, a determination that no other adequate legal authority exists, and compliance with appropriations, contract authorization, and congressional notification requirements for obligations over $150 million. The section further restricts post-award changes by requiring timely contractor requests, limits price increases tied to mistakes or negotiated procurements, and imposes special limits on officials below the secretarial level. Finally, it adds a separate safeguard for indemnification authority under Executive Order 10789 when the supply or service may be a qualified anti-terrorism technology, requiring additional review involving DHS, DoD, and OMB. In practice, this section is a guardrail: it preserves the government’s ability to act in exceptional circumstances while preventing misuse of extraordinary authority to bypass normal procurement rules, competition, fiscal controls, and statutory protections.