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FAR and DFARS › FAR Part 3: Improper Business Practices and Personal Conflicts of Interest › Subpart 3.5

FAR 3.501-2 General.

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 section explains that buying-in—bidding low to win a contract and then recovering losses later—can reduce competition or hurt performance. It directs the contracting officer to prevent the contractor from recovering those losses through change orders or follow-on contracts, and to use pricing approaches that limit the chance to buy in.

Applies to: Contracting officers and contractors involved in pricing and contract awards

What it requires

  • The contracting officer must take appropriate action to ensure buying-in losses are not recovered through change orders or follow-on contracts subject to cost analysis.

Key terms: buying-in · change orders · follow-on contracts · cost analysis · multiyear contracting

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

The text

(a) Buying-in may decrease competition or result in poor contract performance. The contracting officer must take appropriate action to ensure buying-in losses are not recovered by the contractor through the pricing of—

(1) Change orders; or

(2) Follow-on contracts subject to cost analysis.

(b) The Government should minimize the opportunity for buying-in by seeking a price commitment covering as much of the entire program concerned as is practical by using—

(1) Multiyear contracting, with a requirement in the solicitation that a price be submitted only for the total multiyear quantity; or

(2) Priced options for additional quantities that, together with the firm contract quantity, equal the program requirements (see subpart 17.2).

(c) Other safeguards are available to the contracting officer to preclude recovery of buying-in losses (e.g., amortization of nonrecurring costs (see 15.408, Table 15-2, paragraph A., column (2) under “Formats for Submission of Line Item Summaries”) and treatment of unreasonable price quotations (see 15.405).

Sections it refers to

  • 15.408 Solicitation provisions and contract clauses.
  • 15.405 Price negotiation.

← 3.501-1 Definition. · 3.502 Subcontractor kickbacks. →

Rule changes for FAR Part 3

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

FAR 3.501-2 General · SpendQuery