FAR 50.104-2—General.
Plain-English Summary
FAR 50.104-2 is a short but important implementation rule for using residual powers under the extraordinary contractual relief framework. It covers two core topics: the documentation required when an approving authority grants or denies a proposal to exercise residual powers, and the compliance requirements for any contract that is entered into, amended, or modified under those powers. In practice, this section ensures that decisions to use residual powers are not informal or undocumented, and that any resulting contractual action is tied back to the procedural safeguards in FAR 50.103-6 and FAR 50.103-7. The section matters because residual powers are an exceptional authority, so the Government must create a clear decision record and follow the prescribed contract-processing requirements. For contractors, this means relief actions are not complete until the required memorandum and contract documentation are in place; for contracting officials, it means the decision and the resulting contract action must be carefully documented and compliant.
Key Rules
Decision memorandum required
When the approving authority approves or denies a proposal to exercise residual powers, the authority must sign and date a Memorandum of Decision. The memorandum must contain substantially the same information required by FAR 50.103-6, so the decision record is not optional and must be complete enough to support review and accountability.
Same content standards apply
The Memorandum of Decision must include substantially the same information called for by FAR 50.103-6. This ties the residual-powers decision to the established documentation standard for extraordinary relief actions, ensuring the rationale, facts, and disposition are recorded consistently.
All resulting contract actions must comply
Every contract entered into, amended, or modified under residual powers must comply with FAR 50.103-7. This means the contract action itself must follow the required procedural and substantive safeguards, not just the initial approval decision.
Applies to approvals and denials
The documentation requirement applies whether the proposal is approved or denied. A denial still requires a signed and dated Memorandum of Decision, which preserves the administrative record and shows how the authority exercised discretion.
Responsibilities
Approving Authority
Must sign and date a Memorandum of Decision when approving or denying a proposal to exercise residual powers, and ensure the memorandum contains substantially the same information required by FAR 50.103-6.
Contracting Officer / Responsible Contracting Official
Must ensure any contract entered into, amended, or modified under residual powers complies with FAR 50.103-7 and that the contract file reflects the required documentation and authority basis.
Agency
Must maintain procedures and oversight so residual-powers actions are documented properly and contract actions taken under that authority meet the required FAR standards.
Contractor
Must recognize that relief or contract changes under residual powers are subject to formal Government approval and documentation, and should ensure its submissions and proposed changes support the required record.
Practical Implications
Residual-powers actions are not effective just because someone agrees in principle; the signed and dated Memorandum of Decision is a required control point.
A denial still needs documentation, so agencies should not treat rejected proposals as informal or unrecorded decisions.
The contract action must separately satisfy FAR 50.103-7, so a proper approval memo alone does not cure defects in the resulting contract modification or new contract.
Missing dates, signatures, or incomplete content in the Memorandum of Decision can create audit, legal, and file-support problems.
Contractors seeking relief should provide clear facts and supporting information, because the approving authority must document the basis for the decision and the resulting contract action must be defensible.
Official Regulatory Text
(a) When approving or denying a proposal for the exercise of residual powers, the approving authority shall sign and date a Memorandum of Decision containing substantially the same information called for by 50.103-6 . (b) Every contract entered into, amended, or modified under residual powers shall comply with the requirements of 50.103-7 .