FAR 52.216-21—Requirements.
Plain-English Summary
FAR 52.216-21, Requirements, is the core clause for a requirements contract. It explains that the Government is buying all of its actual needs for the listed supplies or services from the contractor during the contract period, but the quantities in the Schedule are only estimates and are not guaranteed purchases. The clause also covers how orders are placed under the Ordering clause, the contractor’s duty to fill authorized orders, the Government’s obligation to buy its covered requirements from the contractor, limits on the Government’s obligation when total orders exceed a stated cap, the Government’s right to buy elsewhere when urgent delivery is needed sooner than the contract allows, and how orders issued near the end of the contract period are completed after expiration. The alternates add special rules for nonpersonal services where the agency can self-perform part of the work, for subsistence contracts involving both Government use and resale with brand-name purchases, and for partial small business set-asides where requirements are split between set-aside and non-set-aside contractors. In practice, this clause is important because it defines exclusivity, ordering obligations, and risk allocation in a way that affects pricing, capacity planning, delivery commitments, and competition between contractors.
Key Rules
Estimates Are Not Guaranteed
The quantities in the Schedule are estimates only, not purchased quantities. If actual Government orders are higher or lower than estimated, that alone does not entitle the contractor to an equitable price adjustment unless another contract provision says otherwise.
Orders Control Performance
The contractor must deliver or perform only when the Government issues orders under the Ordering clause. The contractor must then furnish all supplies or services called for by those valid orders, subject to any order limitations or other contract limits.
Government Buys Covered Needs
Except where the contract says otherwise, the Government must order from the contractor all of the supplies or services in the Schedule that the specified Government activity or activities require. This is the defining feature of a requirements contract: the contractor gets the agency’s covered requirements, not a fixed quantity.
Order Limits Still Apply
The Government is not required to place orders that exceed any stated total-order limit in the contract. If the contract sets a ceiling or other limitation, that cap controls the Government’s obligation.
Urgent Needs May Be Bought Elsewhere
If the Government urgently needs delivery sooner than the earliest delivery date allowed under the contract and the contractor will not accept an accelerated order, the Government may obtain the needed goods or services from another source.
Late Orders Must Be Completed
Orders issued during the contract’s effective period remain binding even if not completed before the contract ends. The contractor must complete them within the order’s specified time, but the clause also allows the contract to set a final date after which no further deliveries are required.
Alternate I: Self-Performance Offset
For certain nonpersonal services and related supplies, the Government’s estimated quantities may represent only the portion above what the activity can produce or perform itself. In that case, the contractor must supply only the activity’s requirements that exceed its own internal capability.
Alternate II: Brand-Name Resale Exception
For subsistence contracts covering both Government use and resale, where similar products may be bought on a brand-name basis, the Government may buy similar products from other sources for resale even though the contract otherwise covers the requirements.
Alternate III: Partial Small Business Set-Aside Split
When a requirements contract is partially set aside for small business, the Government must order approximately half of the total covered requirements from the set-aside contractor and half from the non-set-aside contractor. The Government may choose either contractor for a particular order, but must keep the overall ratio as close as reasonably practicable.
Alternate IV: Split Set-Aside Plus Brand-Name
This alternate combines the partial set-aside allocation rule with the brand-name resale exception for subsistence contracts. It preserves the approximate 50/50 split while also allowing the Government to buy similar brand-name products from other sources for resale.
Responsibilities
Contracting Officer
Draft the contract schedule and ordering terms carefully, including estimated quantities, any maximum order limits, delivery dates, and the final delivery cutoff date. Issue orders only under the Ordering clause, apply the correct alternate when the contract type requires it, and ensure the Government’s ordering pattern complies with requirements-contract exclusivity, set-aside allocation rules, and any urgency exception.
Government Activity / Ordering Activity
Place all covered requirements with the contractor unless the contract or a valid exception allows otherwise. Track actual needs against estimates, respect any order ceiling, maintain the required allocation between set-aside and non-set-aside contractors when applicable, and use other sources only when the urgency exception or another contract provision permits it.
Contractor
Accept and perform valid orders for the supplies or services covered by the contract, within the contract’s delivery and performance terms. Plan capacity around estimated demand, complete orders issued during the contract period even if performance extends beyond expiration, and understand that lower-than-estimated ordering does not automatically create a price-adjustment right.
Agency / Government
Use the requirements contract as the exclusive source for covered needs for the specified activity or activities, except where the contract allows purchases elsewhere. When alternates apply, follow the special rules for self-performance offsets, brand-name resale purchases, or split ordering between set-aside and non-set-aside contractors.
Practical Implications
This clause is about exclusivity and demand risk: the contractor is not guaranteed a minimum quantity unless the contract separately provides one, but the Government generally must buy its covered needs from that contractor.
Contractors should not treat the Schedule estimates as firm forecasts; they should review maximums, delivery windows, and the final delivery cutoff date to avoid overcommitting capacity.
Contracting officers need to be precise in the Schedule because the clause depends heavily on identifying the covered activity, the estimated quantities, any order limits, and whether an alternate applies.
A common pitfall is assuming the Government can freely buy elsewhere; under a requirements contract, off-contract purchases are limited unless the urgency exception, a brand-name resale exception, or another contract term permits them.
For partial small business set-asides, ordering balance matters operationally: agencies must manage cumulative awards to keep the split approximately even, not just alternate orders casually.
Orders issued near the end of the contract period remain enforceable, so both sides should track outstanding orders and delivery obligations even after the base period ends.
Official Regulatory Text
As prescribed in 16.506 (d) , insert the following clause: Requirements (Oct 1995) (a) This is a requirements contract for the supplies or services specified, and effective for the period stated, in the Schedule. The quantities of supplies or services specified in the Schedule are estimates only and are not purchased by this contract. Except as this contract may otherwise provide, if the Government’s requirements do not result in orders in the quantities described as "estimated" or "maximum" in the Schedule, that fact shall not constitute the basis for an equitable price adjustment. (b) Delivery or performance shall be made only as authorized by orders issued in accordance with the Ordering clause. Subject to any limitations in the Order Limitations clause or elsewhere in this contract, the Contractor shall furnish to the Government all supplies or services specified in the Schedule and called for by orders issued in accordance with the Ordering clause. The Government may issue orders requiring delivery to multiple destinations or performance at multiple locations. (c) Except as this contract otherwise provides, the Government shall order from the Contractor all the supplies or services specified in the Schedule that are required to be purchased by the Government activity or activities specified in the Schedule. (d) The Government is not required to purchase from the Contractor requirements in excess of any limit on total orders under this contract. (e) If the Government urgently requires delivery of any quantity of an item before the earliest date that delivery may be specified under this contract, and if the Contractor will not accept an order providing for the accelerated delivery, the Government may acquire the urgently required goods or services from another source. (f) Any order issued during the effective period of this contract and not completed within that period shall be completed by the Contractor within the time specified in the order. The contract shall govern the Contractor’s and Government’s rights and obligations with respect to that order to the same extent as if the order were completed during the contract’s effective period; provided , that the Contractor shall not be required to make any deliveries under this contract after _________________ [ insert date ] . Alternate I (Apr1984 ). If the requirements contract is for nonpersonal services and related supplies and covers estimated requirements that exceed a specific Government activity’s internal capability to produce or perform, substitute the following paragraph (c) for paragraph (c) of the basic clause: (c) The estimated quantities are not the total requirements of the Government activity specified in the Schedule, but are estimates of requirements in excess of the quantities that the activity may itself furnish within its own capabilities. Except as this contract otherwise provides, the Government shall order from the Contractor all of that activity's requirements for supplies and services specified in the Schedule that exceed the quantities that the activity may itself furnish within its own capabilities. Alternate II (Apr 1984) . If the requirements contract includes subsistence for both Government use and resale in the same Schedule, and similar products may be acquired on a brand-name basis, add the following paragraph (g) to the basic clause: (g) The requirements referred to in this contract are for items to be manufactured according to Government specifications. Notwithstanding anything to the contrary stated in the contract, the Government may acquire similar products by brand name from other sources for resale. Alternate III (Oct 1995) . If the requirements contract involves a partial small business set-aside, substitute the following paragraph (c) for paragraph (c) of the basic clause: (c) The Government’s requirements for each item or subitem of supplies or services described in the Schedule are being purchased through one non-set-aside contract and one set-aside contract. Therefore, the Government shall order from each Contractor approximately one-half of the total supplies or services specified in the Schedule that are required to be purchased by the specified Government activity or activities. The Government may choose between the set-aside Contractor and the non-set-aside Contractor in placing any particular order. However, the Government shall allocate successive orders, in accordance with its delivery requirements, to maintain as close a ratio as is reasonably practicable between the total quantities ordered from the two Contractors. Alternate IV (Oct 1995) . If the contract includes subsistence for both Government use and resale in the same Schedule and similar products may be acquired on a brand-name basis and the contract also involves a partial small business set-aside, substitute the following paragraph (c) for paragraph (c) of the basic clause and add the following paragraph (g) to the basic clause: (c) The Government’s requirements for each item or subitem of supplies or services described in the Schedule are being purchased through one non-set-aside contract and one set-aside contract. Therefore, the Government shall order from each Contractor approximately one-half of the total supplies or services specified in the Schedule that are required to be purchased by the specified Government activity or activities. The Government may choose between the set-aside Contractor and the non-set-aside Contractor in placing any particular order. However, the Government shall allocate successive orders, in accordance with its delivery requirements, to maintain as close a ratio as is reasonably practicable between the total quantities ordered from the two Contractors. (g) The requirements referred to in this contract are for items to be manufactured according to the Government specifications. Notwithstanding anything to the contrary stated in the contract, the Government may acquire similar products by brand name from other sources for resale.