FAR 51.202—Authorization.
Plain-English Summary
FAR 51.202 explains when and how a contracting officer may authorize a cost-reimbursement contractor to use interagency fleet management system (IFMS) vehicles and related services. It covers the threshold decision to grant authorization, including the need to find that the arrangement supports the agency’s contractual objectives and produces demonstrable economies, and it requires the contracting officer to verify insurance coverage, arrange periodic compliance checks, ensure employee penalties are in place for misuse, obtain a written assumption of nonreimbursable costs for unauthorized use, and consider the contractor’s recommendations. The section also prescribes what the written authorization must contain: it must be in writing, cite the contract number, state any limits and duration, and direct compliance with the applicable subpart policies and procedures. It further addresses subcontractor access, requiring that any authorization to a subcontractor be issued through and approved by the prime contractor. Finally, it warns that authorizing use of IFMS vehicles and related services exposes the agency to the accident and claims responsibilities and liabilities described in 41 CFR 101-39.4. In practice, this section is about controlling risk, documenting authority, and ensuring that government-furnished transportation resources are used only when they are justified, properly insured, and tightly managed.
Key Rules
Only cost-reimbursement contractors
The contracting officer may authorize IFMS vehicles and related services only for a cost-reimbursement contractor. This is not a general-use authority and must be tied to the contract type and the agency’s needs.
Must serve agency objectives
Before authorizing use, the contracting officer must determine that the arrangement will accomplish the agency’s contractual objectives and produce demonstrable economies. The decision should be based on a real business justification, not convenience alone.
Insurance and liability proof required
The contractor must provide evidence of motor vehicle liability insurance covering bodily injury and property damage, with limits required or approved by the agency. The coverage must protect both the contractor and the Government against third-party claims arising from ownership, maintenance, or use of the IFMS vehicle.
Compliance monitoring is mandatory
The contracting officer must arrange periodic checks to confirm that authorized contractors use vehicles and related services exclusively under cost-reimbursement contracts. This is a continuing oversight obligation, not a one-time approval step.
Misuse penalties must exist
The contractor must establish and enforce suitable penalties for employees who use or authorize use of Government vehicles for purposes other than performance of Government contracts. The section points to 41 CFR 101-38.301-1 for this requirement.
Contractor assumes unauthorized-use costs
The contracting officer must receive a written statement that the contractor will absorb, without reimbursement, any cost or expense for IFMS use or services not related to contract performance. This shifts unauthorized-use costs away from the Government.
Authorization must be written and specific
The authorization must be in writing, cite the contract number, identify any limitations including duration, and include any other pertinent information. It must also instruct the contractor to follow the applicable policies and procedures in the subpart.
Subcontractor access needs prime approval
Authorizations to subcontractors cannot be issued directly in the ordinary course; they must be issued through, and with the approval of, the prime contractor. This preserves prime contractor accountability for downstream use.
Agency assumes accident and claims exposure
By authorizing contractor use of IFMS vehicles and related services, the contracting officer subjects the agency to the responsibilities and liabilities in 41 CFR 101-39.4 for accidents and claims. This makes the authorization decision a risk-management decision as well as a procurement decision.
Responsibilities
Contracting Officer
Determine whether authorization will support contractual objectives and yield demonstrable economies; verify insurance; arrange periodic compliance checks; ensure the contractor has employee misuse penalties; obtain the contractor’s written assumption of unauthorized-use costs; consider contractor recommendations; issue a written authorization with required content; ensure subcontractor authorizations go through the prime contractor; and recognize the agency’s accident and claims exposure.
Contractor
Provide evidence of required motor vehicle liability insurance; establish and enforce penalties for employee misuse; submit a written statement accepting nonreimbursable costs for unauthorized IFMS use; comply with the authorization’s limits and the applicable subpart policies and procedures; and, when subcontractors are involved, approve and channel any subcontractor authorization through the prime contract relationship.
Agency
Approve or set insurance liability limits as appropriate; support the contracting officer’s oversight and periodic checks; and accept the responsibilities and liabilities associated with IFMS use under 41 CFR 101-39.4 when authorization is granted.
Subcontractor
Use IFMS vehicles and related services only if authorization is issued through and approved by the prime contractor, and only within the limits of the approved authorization and applicable policies.
Practical Implications
This section requires a documented business case before a contractor can use IFMS resources; if the contracting officer cannot show contractual benefit and savings, the authorization should not be granted.
Insurance is not optional paperwork. Missing, inadequate, or unapproved liability coverage is a common reason an authorization should be delayed or denied.
The authorization must be tightly written. Vague approvals create compliance problems, so the contract number, duration, limits, and governing procedures should be spelled out clearly.
Periodic checks matter because misuse can happen after approval. Agencies should plan how they will verify exclusive use under cost-reimbursement contracts and document those reviews.
Subcontractor use is a control point. If the prime contractor has not approved the arrangement, the authorization is defective and can create accountability and liability issues for the agency.
Official Regulatory Text
(a) The contracting officer may authorize a cost-reimbursement contractor to obtain interagency fleet management system (IFMS) vehicles and related services, if the contracting officer has- (1) Determined that the authorization will accomplish the agency’s contractual objectives and effect demonstrable economies; (2) Received evidence that the contractor has obtained motor vehicle liability insurance covering bodily injury and property damage, with limits of liability as required or approved by the agency, protecting the contractor and the Government against third-party claims arising from the ownership, maintenance, or use of an interagency fleet management system vehicle (IFMS); (3) Arranged for periodic checks to ensure that authorized contractors are using vehicles and related services exclusively under cost-reimbursement contracts; (4) Ensured that contractors shall establish and enforce suitable penalties for their employees who use or authorize the use of Government vehicles for other than performance of Government contracts (see 41 CFR 101-38.301 -1); (5) Received a written statement that the contractor will assume, without the right of reimbursement from the Government, the cost or expense of any use of interagency fleet management vehicles (IFMS) and services not related to the performance of the contract; and (6) Considered any recommendations of the contractor. (b) The authorization shall- (1) Be in writing; (2) Cite the contract number; (3) Specify any limitations on the authority, including its duration, and any other pertinent information; and (4) Instruct the contractor to comply with the applicable policies and procedures provided in this subpart. (c) Authorizations to subcontractors shall be issued through, and with the approval of, the contractor. (d) Contracting officers authorizing contractor use of interagency fleet management system (IFMS) vehicles and related services subject their agencies to the responsibilities and liabilities provided in 41 CFR 101-39.4 regarding accidents and claims.