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FAR and DFARS › DFARS Part 234: Major System Acquisition

DFARS 234.005-1 Competition.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This DFARS section allows a contract initially awarded through competitive selection under a broad agency announcement to include a line item or option using funds beyond those normally tied to the BAA, but only for developing, demonstrating, or initially producing technology from the contract, or delivering initial or additional items or prototypes. It matters because it sets strict limits on that added work: minimal quantities, a term of no more than 2 years, and a dollar cap of $100 million in fiscal year 2017 constant dollars.

Applies to: Contracts initially awarded from competitive selection of a proposal resulting from a broad agency announcement

What it requires

  • Limit the contract line item or contract option to the minimal amount of initial or additional items or prototypes needed to allow timely competitive solicitation and award of a follow-on development or production contract
  • Keep the term of the contract line item or contract option to not more than 2 years
  • Ensure the dollar value of the work under the contract line item or contract option does not exceed $100 million in fiscal year 2017 constant dollars

Key terms: broad agency announcement · contract line item · contract option · follow-on development or production contract · fiscal year 2017 constant dollars

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

A contract that is initially awarded from the competitive selection of a proposal resulting from a broad agency announcement (see 235.016) may contain a contract line item or contract option using funds not limited to those identified in 235.016 for the development and demonstration or initial production of technology developed under the contract, or the delivery of initial or additional items if the item or a prototype thereof is created as the result of work performed under the contract, only when it adheres to the following limitations:

(1) The contract line item or contract option shall be limited to the delivery of the minimal amount of initial or additional items or prototypes that will allow for timely competitive solicitation and award of a follow-on development or production contract for those items.

(2) The term of the contract line item or contract option shall be for not more than 2 years.

(3) The dollar value of the work to be performed pursuant to the contract line item or contract option shall not exceed $100 million in fiscal year 2017 constant dollars. (10 U.S.C. 4004)

(4) See PGI 234.005-1 for guidance on providing, upon request, the benefits derived from use of this competitive selection method.

Sections it refers to

Sections that refer to it

← 234.005 General requirements. · 234.005-2 Mission-oriented solicitation. →

Rule changes for DFARS Part 234

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

DFARS 234.005-1 Competition · SpendQuery