FAR 8.405-2—Ordering procedures for services requiring a statement of work.
Plain-English Summary
FAR 8.405-2 sets the ordering procedures for services acquired under the Federal Supply Schedule when the services are priced at hourly rates and require a statement of work. It explains when these procedures apply, what must be included in the statement of work, how the ordering activity must prepare and issue the RFQ, and how competition works for orders at or below the micro-purchase threshold, above the micro-purchase threshold but at or below the simplified acquisition threshold, and above the simplified acquisition threshold. It also addresses posting RFQs on eBuy, providing RFQs to schedule contractors, limiting competition only under the exceptions in 8.405-6, evaluating quotes, making best-value awards, notifying unsuccessful offerors, and giving brief award explanations when requested. The section further covers the use of time-and-materials and labor-hour orders by reference to 8.404(h), and it requires minimum documentation of the schedule contracts considered, the service purchased, the amount paid, the evaluation method, tradeoff rationale, price reasonableness, justification for using something other than firm-fixed-price or performance-based ordering, and proof of compliance with the competitive ordering procedures for orders above the simplified acquisition threshold. In practice, this section is meant to ensure that schedule service orders are competed fairly, documented adequately, and structured to support reasonable pricing and clear performance expectations.
Key Rules
Applies to hourly-rate services
Use these procedures when ordering services priced at hourly rates under the Schedule contracts. The applicable services must be identified in the Federal Supply Schedule publications and the contractor pricelists.
SOW must be complete
Every statement of work must describe the work, location, period of performance, deliverables, performance standards, and any special requirements such as security clearances, travel, or special knowledge. Agencies should use performance-based statements to the maximum extent practicable.
RFQ must include SOW and criteria
The ordering activity must issue an RFQ that includes the statement of work and evaluation criteria, such as experience and past performance, to schedule contractors that can meet the need. The RFQ may be posted in eBuy.
Micro-purchase orders are flexible
For orders at or below the micro-purchase threshold, the ordering activity may place an order with any Schedule contractor that can meet the need. The activity should try to distribute orders among contractors.
Three-contractor competition rule
For orders above the micro-purchase threshold but not exceeding the simplified acquisition threshold, the ordering activity must send the RFQ to at least three Schedule contractors that can meet the need, or document why fewer than three were reasonably available under an 8.405-6(a) exception.
SAT orders require broader competition
For proposed orders exceeding the simplified acquisition threshold, the order must be competed unless waived by an approved justification under 8.405-6. The CO must post the RFQ on eBuy or otherwise seek quotes from as many contractors as practicable to reasonably ensure at least three quotes, and must document efforts if fewer than three are received.
Evaluate on stated criteria
All quotes must be evaluated using the criteria in the RFQ. The ordering activity must consider labor mix and level of effort, determine that the total price is reasonable, and award to the contractor representing best value.
Notify unsuccessful offerors
After award, unsuccessful offerors should be notified promptly. If the award was based on factors other than price alone and an unsuccessful offeror asks, the ordering activity must provide a brief explanation of the award basis.
T&M and labor-hour orders cross-reference
When using time-and-materials or labor-hour orders for services, the ordering activity must follow the additional requirements in 8.404(h).
Document the file
The ordering activity must document the contracts considered, the service purchased, amount paid, evaluation method, tradeoff rationale, price reasonableness determination, rationale for using other than firm-fixed-price or performance-based ordering, and compliance with the competitive procedures for orders above the simplified acquisition threshold.
Responsibilities
Ordering Activity
Use the procedures in 8.405-2 for hourly-rate Schedule services; prepare a complete SOW; issue the RFQ with evaluation criteria; compete the requirement appropriately based on dollar value; evaluate quotes using the stated criteria; determine price reasonableness; make a best-value award; notify unsuccessful offerors; and maintain the required documentation.
Ordering Activity Contracting Officer
For orders above the simplified acquisition threshold, post the RFQ on eBuy or otherwise seek competition as required; ensure the RFQ reaches enough contractors to reasonably obtain at least three quotes; document efforts when fewer than three quotes are received; approve or rely on approved justifications when competition is limited; and ensure the award decision and file support the selection.
Schedule Contractors
Review RFQs, submit quotes when capable of meeting the requirement, and provide pricing and technical information responsive to the stated evaluation criteria. Contractors requesting the RFQ are entitled to receive a copy.
Agency/Requirement Owner
Define the requirement in a performance-based manner to the maximum extent practicable, identify special requirements, and support the ordering activity with accurate scope, performance standards, and market research information.
Unsuccessful Offerors
If they request it, they may receive a brief explanation of the award basis when the award was made using factors other than price alone.
Practical Implications
This section is the core playbook for buying Schedule services that are billed by the hour, so the quality of the SOW and evaluation criteria drives the entire procurement.
A common pitfall is using vague labor descriptions or incomplete performance standards; that weakens competition, makes evaluation harder, and can undermine price reasonableness determinations.
For orders above the micro-purchase threshold, failing to compete to at least three capable Schedule contractors—or failing to document why fewer were available—is a frequent compliance risk.
For orders above the simplified acquisition threshold, the file must show real competition efforts and, if fewer than three quotes are received, a written determination explaining the search effort and why no additional capable contractors were found.
The documentation requirements are extensive and matter in audits and protests; if the file does not show the evaluation method, tradeoff rationale, and price reasonableness analysis, the award can be difficult to defend.
Official Regulatory Text
(a) General . Ordering activities shall use the procedures in this subsection when ordering services priced at hourly rates as established by the schedule contracts. The applicable services will be identified in the Federal Supply Schedule publications and the contractor’s pricelists. For establishing BPAs and for orders under BPAs see 8.405-3 . (b) Statements of Work (SOWs) . All Statements of Work shall include a description of work to be performed; location of work; period of performance; deliverable schedule; applicable performance standards; and any special requirements ( e.g., security clearances, travel, special knowledge). To the maximum extent practicable, agency requirements shall be performance-based statements (see subpart 37.6 ). (c) Request for Quotation procedures . The ordering activity must provide the request for quotation (RFQ), which includes the statement of work and evaluation criteria ( e.g., experience and past performance), to schedule contractors that offer services that will meet the agency’s needs. The RFQ may be posted to GSA’s electronic RFQ system, eBuy (see 8.402 (d)). (1) Orders at, or below, the micro-purchase threshold . Ordering activities may place orders at, or below, the micro-purchase threshold with any Federal Supply Schedule contractor that can meet the agency’s needs. The ordering activity should attempt to distribute orders among contractors. (2) For orders exceeding the micro-purchase threshold, but not exceeding the simplified acquisition threshold. (i) The ordering activity shall develop a statement of work, in accordance with 8.405-2 (b). (ii) The ordering activity shall provide the RFQ (including the statement of work and evaluation criteria) to at least three schedule contractors that offer services that will meet the agency’s needs or document the circumstances for restricting consideration to fewer than three schedule contractors based on one of the reasons at 8.405-6 (a). (iii) The ordering activity shall specify the type of order ( i.e. , firm-fixed-price, labor-hour) for the services identified in the statement of work. The contracting officer should establish firm-fixed-prices, as appropriate. (3) For proposed orders exceeding the simplified acquisition threshold. In addition to meeting the requirements of 8.405-2 (c)(2)(i) and (iii), the following procedures apply: (i) Each order shall be placed on a competitive basis in accordance with (c)(3)(ii) and (iii) of this section, unless this requirement is waived on the basis of a justification that is prepared and approved in accordance with 8.405-6 . (ii) The ordering activity contracting officer shall provide an RFQ that includes a statement of work and the evaluation criteria. (iii) The ordering activity contracting officer shall- (A) Post the RFQ on eBuy to afford all schedule contractors offering the required services under the appropriate multiple-award schedule(s) an opportunity to submit a quote; or (B) Provide the RFQ to as many schedule contractors as practicable, consistent with market research appropriate to the circumstances, to reasonably ensure that quotes will be received from at least three contractors that can fulfill the requirements. When fewer than three quotes are received from schedule contractors that can fulfill the requirements, the contracting officer shall prepare a written determination to explain that no additional contractors capable of fulfilling the requirements could be identified despite reasonable efforts to do so. The determination must clearly explain efforts made to obtain quotes from at least three schedule contractors. (C) Ensure all quotes received are fairly considered and award is made in accordance with the evaluation criteria in the RFQ. (4) The ordering activity shall provide the RFQ (including the statement of work and the evaluation criteria) to any schedule contractor who requests a copy of it. (d) Evaluation . The ordering activity shall evaluate all responses received using the evaluation criteria provided to the schedule contractors. The ordering activity is responsible for considering the level of effort and the mix of labor proposed to perform a specific task being ordered, and for determining that the total price is reasonable. Place the order with the schedule contractor that represents the best value (see 8.404 (d) and 8.405-4 ). After award, ordering activities should provide timely notification to unsuccessful offerors. If an unsuccessful offeror requests information on an award that was based on factors other than price alone, a brief explanation of the basis for the award decision shall be provided. (e) Use of time-and-materials and labor-hour orders for services . When placing a time-and-materials or labor-hour order for services, see 8.404 (h). (f) Minimum documentation. The ordering activity shall document- (1) The schedule contracts considered, noting the contractor from which the service was purchased; (2) A description of the service purchased; (3) The amount paid; (4) The evaluation methodology used in selecting the contractor to receive the order; (5) The rationale for any tradeoffs in making the selection; (6) The price reasonableness determination required by paragraph (d) of this subsection; (7) The rationale for using other than- (i) A firm-fixed price order; or (ii) A performance-based order; and (8) When an order exceeds the simplified acquisition threshold, evidence of compliance with the ordering procedures at 8.405-2 (c).