DFARS Part 236: Construction and Architect-engineer Contracts

In plain English

DFARS Part 236 implements DoD-specific policies for construction and architect-engineer (A-E) contracts, covering topics such as cost estimates, liquidated damages, sealed bidding, cost-reimbursement restrictions, prequalification, foreign country restrictions, and A-E selection and fees. It matters to contractors because it adds DoD-unique rules and thresholds that affect how you bid, perform, and get paid on military construction and A-E projects.

Key rules

• For construction projects, additional price ranges for disclosure of magnitude are between $10M and $25M, $25M and $100M, $100M and $250M, $250M and $500M, and over $500M. (236.204)
• Expediting a construction contract completion date requires agency head approval if additional costs are involved; that authority cannot be redelegated, but the contracting officer may approve an expedited date if no additional costs are involved. (236.270)
• Prequalification of sources may be used for critical construction projects when authorized in writing by the head of the contracting activity, and for small businesses the procedures must request a preliminary recommendation from the SBA regional office. (236.272)
• Military construction contracts over $1,000,000 to be performed in U.S. outlying areas in the Pacific, on Kwajalein Atoll, or in countries bordering the Arabian Gulf must be awarded only to U.S. firms unless the lowest U.S. offer exceeds the lowest foreign offer by more than 20 percent or other exceptions apply. (236.273)
• For design-build construction, if the contract value exceeds $5.5 million, the maximum number of offerors selected to submit phase-two proposals is five, unless the solicitation is for an IDIQ design-build contract or the head of the contracting activity approves a greater number. (236.303-1)
• Written notification to congressional defense committees is required if the total estimated contract price for A-E services or construction design in connection with military construction, military family housing, or restoration of damaged facilities exceeds $1.5 million. (236.601)
• A-E contracts funded by military construction appropriations estimated to exceed $500,000 for work in Japan, NATO member countries, or countries bordering the Arabian Gulf must be awarded only to U.S. firms or joint ventures of U.S. and host nation firms. (236.602-70)
• The contract price or fee for A-E services for designs, plans, drawings, and specifications is limited to 10 percent of the project's estimated construction cost, and this limit also applies to modifications including redesign work. (236.606-70)

Who does what

In practice

• If you are a small business, prequalification procedures for construction must include a request for a preliminary recommendation from the SBA regional office, which may help you get considered for critical projects.
• For overseas military construction or A-E work in specified regions, you generally must be a U.S. firm (or a joint venture with a host nation firm for A-E) to be eligible, unless a price exception applies.
• When bidding on design-build construction over $5.5 million, expect a limit on the number of offerors selected for phase two, typically five, unless an exception is approved.
• For A-E contracts, the fee is capped at 10 percent of the estimated construction cost, and this cap also applies to modifications such as redesign work.

Common pitfalls

• Assuming you can use a cost-plus-fixed-fee contract for military construction without checking the restrictions in 216.301-3 and 216.306(c) referenced in 236.271.
• Overlooking the requirement that expediting a construction contract with additional costs needs non-delegable agency head approval, which can delay your project if not properly authorized.
• Failing to include the required clause 252.236-7000, Modification Proposals-Price Breakdown, and 252.236-7001, Contract Drawings and Specifications, in fixed-price construction solicitations and contracts as required by 236.570.
• For overseas A-E contracts over $500,000 in specified countries, not verifying that you are a U.S. firm or a joint venture of U.S. and host nation firms, as required by 236.602-70.

Written by AI from this part's codified text (2026-10-04); cited sections are checked against the part. A guide, not legal advice: the regulation text, the solicitation and your contract rule.