FAR 8.704—Purchase priorities.
Plain-English Summary
FAR 8.704 explains the mandatory purchase priorities that apply when supplies or services appear on the Procurement List and, in some cases, also on the Federal Prison Industries, Inc. (FPI) Schedule of Products. It implements the statutory requirement in 41 U.S.C. chapter 85 that agencies buy Procurement List items from AbilityOne participating nonprofit agencies at Committee-established prices when those items are available within the required delivery period. The section also establishes the order of precedence when the same item or service is listed by both AbilityOne and FPI, distinguishing between supplies and services and directing which source must be used first. In addition, it makes clear that no other FAR provision can be used to avoid the mandatory purchase requirement for Procurement List items. Finally, it points readers to the special waiver process in 8.604 for certain supplies that require a formal waiver from FPI before purchase from an AbilityOne nonprofit agency. In practice, this section is a strict source-of-supply rule that contracting and ordering personnel must follow before considering commercial sources or other acquisition methods.
Key Rules
Mandatory Procurement List buys
If a supply or service is on the Procurement List, the Government must buy it from the designated AbilityOne participating nonprofit agency at the Committee-established price, provided it is available within the required time. This is a mandatory source requirement, not a discretionary preference.
Supplies priority order
When identical supplies are listed both on the Procurement List and on the FPI Schedule of Products, ordering offices must follow the supply priority sequence: first FPI, then AbilityOne participating nonprofit agencies, then commercial sources. The ordering office cannot skip ahead to a lower-priority source without authority.
Services priority order
When identical services are listed both on the Procurement List and on the FPI Schedule of Products, the priority is AbilityOne participating nonprofit agencies first, then FPI or commercial sources. For services, AbilityOne has the higher priority source.
No FAR exception overrides
No other FAR provision may be read to create an exception to the mandatory purchase of Procurement List items. If an item is on the Procurement List, the ordering office must comply with the AbilityOne requirement unless a specific statutory or regulatory waiver process applies.
Formal FPI waiver for certain supplies
For supplies identified on the Procurement List that require it, the ordering office must obtain a formal waiver from FPI under 8.604 before buying from an AbilityOne participating nonprofit agency. The Procurement List itself identifies which supplies are subject to this waiver requirement.
Responsibilities
Ordering Office
Check whether the needed supply or service is on the Procurement List and, if so, follow the mandatory source rules and priority order before considering any other source. For covered supplies, obtain the required formal waiver from FPI under 8.604 when the Procurement List identifies that step as necessary.
Contracting Officer
Ensure solicitations, orders, and awards comply with the Procurement List requirements and the applicable priority between AbilityOne, FPI, and commercial sources. The contracting officer must not use other FAR provisions to bypass the mandatory purchase rule.
AbilityOne Participating Nonprofit Agency
Provide the listed supplies or services when selected as the mandatory source and perform at the Committee-established price and within the required delivery period.
Federal Prison Industries, Inc. (FPI)
Serve as the first-priority source for identical supplies listed on both the Procurement List and the FPI Schedule of Products, and as the second-priority source for identical services. Where required by the Procurement List, FPI must also be the source from which a formal waiver is obtained before purchase from AbilityOne.
Agency Acquisition Personnel
Screen requirements early to identify Procurement List items, apply the correct source priority, and document any waiver or source-selection decision required by the rule.
Practical Implications
This section is a hard source-of-supply rule, so the first question in any buy is whether the item or service is on the Procurement List. Missing that check can lead to an improper purchase from a commercial source or the wrong mandatory source.
The supply/service distinction matters. For identical supplies, FPI comes first; for identical services, AbilityOne comes first. Treating both categories the same is a common mistake.
The phrase 'available within the period required' is important in practice because the mandatory source must be able to meet the agency’s timing needs. If availability is an issue, the ordering office must evaluate that issue under the applicable rules rather than simply defaulting to another source.
The Procurement List may require a formal FPI waiver before buying certain supplies from AbilityOne. Failing to obtain that waiver when required can invalidate the purchase process or create compliance problems.
Because no other FAR provision can override the mandatory purchase requirement, personnel should not rely on general competition, small business, or other acquisition rules to avoid using the required source.
Official Regulatory Text
(a) 41 U.S.C. chapter 85 requires the Government to purchase supplies or services on the Procurement List, at prices established by the Committee, from AbilityOne participating nonprofit agencies if they are available within the period required. When identical supplies or services are on the Procurement List and the Schedule of Products issued by Federal Prison Industries, Inc., ordering offices shall purchase supplies and services in the following priorities: (1) Supplies: (i) Federal Prison Industries, Inc. ( 41 U.S.C. 8504 ). (ii) AbilityOne participating nonprofit agencies. (iii) Commercial sources. (2) Services: (i) AbilityOne participating nonprofit agencies. (ii) Federal Prison Industries, Inc., or commercial sources. (b) No other provision of the FAR shall be construed as permitting an exception to the mandatory purchase of items on the Procurement List. (c) The Procurement List identifies those supplies for which the ordering office must obtain a formal waiver ( 8.604 ) from Federal Prison Industries, Inc., before making any purchases from AbilityOne participating nonprofit agencies.