FAR 9.507-2—Contract clause.
Plain-English Summary
FAR 9.507-2 explains how a contracting officer must handle contract clauses that restrict a contractor’s future work when a conflict-of-interest concern exists, especially in situations involving organizational conflicts of interest under FAR Part 9. The section covers when a solicitation must include a proposed restraint clause, what that clause must identify, when and how the final clause is negotiated with the successful offeror, and the limits on how long the restraint may last. Its purpose is to prevent unfair competitive advantage or bias while still allowing the Government to use needed contractors for sensitive work such as preparing specifications, work statements, systems engineering, or technical direction. In practice, this section requires the Government to be precise and narrowly tailored: the restraint must be tied to a real conflict concern, must describe both the type and duration of the restriction, and cannot be open-ended. For contractors, the rule matters because it can affect future bidding opportunities and subcontracting eligibility, so the restriction must be understood before award and reflected clearly in the contract. For contracting officers, it is a drafting and negotiation requirement that helps ensure the restraint is enforceable, reasonable, and limited to what is necessary to protect the integrity of the procurement process.
Key Rules
Solicitation must propose restraint
If award will depend on the contractor accepting a restriction on future prime or subcontract awards, the solicitation must include a proposed clause. The clause must state both the nature of the restraint and how long it will last.
Final terms may be negotiated
The contracting officer must include the clause in the contract and, when appropriate, negotiate its final terms with the successful offeror. This means the restriction is not automatically fixed at solicitation stage if negotiation is appropriate under FAR 9.506(d).
Restraint must be time-limited
Any restriction imposed by the clause must be for a fixed, reasonable duration. The period must be long enough to prevent unfair competitive advantage or bias, but no longer than necessary.
Termination must be identifiable
The restriction cannot be indefinite or vague. It must end on a specific date or when a clearly identifiable event occurs, such as award of the first production contract or completion of a system’s life cycle.
Duration depends on the conflict
The proper length of the restraint varies with the nature of the contractor’s prior role. For example, systems engineering and technical direction may justify a longer restriction than preparation of specifications or a work statement.
Responsibilities
Contracting Officer
Determine whether a future-award restraint is needed, include a proposed clause in the solicitation, ensure the clause states the nature and duration of the restraint, negotiate final terms with the successful offeror when appropriate, and make sure the final restriction is limited, reasonable, and tied to a specific end point.
Successful Offeror / Contractor
Review the proposed restraint before award, accept or negotiate the final clause terms as part of the contract formation process when permitted, and comply with the restriction on future prime or subcontract awards for the stated period or until the stated event occurs.
Agency
Use restraint clauses only when necessary to address a legitimate conflict-of-interest or unfair-advantage concern, and ensure procurement planning and solicitation language support a narrowly tailored, defensible restriction.
Practical Implications
This section is a drafting control point: if the solicitation does not clearly state the restraint’s nature and duration, the clause may be vulnerable to challenge or may be difficult to enforce.
Contracting officers should avoid vague language like "for an appropriate period" or "until further notice"; the rule requires a specific date or identifiable event.
Contractors should evaluate these clauses early because they can limit future business opportunities, including both prime contracts and subcontracts.
The duration should match the actual risk. Overly long restraints can be seen as unnecessary and may discourage competition, while overly short restraints may fail to prevent bias or unfair advantage.
Teams working on specifications, work statements, systems engineering, or technical direction should flag potential organizational conflict issues early so the solicitation can include the right restraint language from the start.
Official Regulatory Text
(a) If, as a condition of award, the contractor’s eligibility for future prime contract or subcontract awards will be restricted or the contractor must agree to some other restraint, the solicitation shall contain a proposed clause that specifies both the nature and duration of the proposed restraint. The contracting officer shall include the clause in the contract, first negotiating the clause’s final terms with the successful offeror, if it is appropriate to do so (see 9.506 (d)). (b) The restraint imposed by a clause shall be limited to a fixed term of reasonable duration, sufficient to avoid the circumstance of unfair competitive advantage or potential bias. This period varies. It might end, for example, when the first production contract using the contractor’s specifications or work statement is awarded, or it might extend through the entire life of a system for which the contractor has performed systems engineering and technical direction. In every case, the restriction shall specify termination by a specific date or upon the occurrence of an identifiable event.