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    Is Service/Agency policy allowed to be more strict than the FAR/DFARS? If so, where can I find that in black and white so as to settle this issue?


    A Service or Agency policy is not allowed to be more strict (restrictive) that the FAR/DFARS, per FAR 1.304:

    1.304 Agency control and compliance procedures.

          (a) Under the authorities of 1.301(d), agencies shall control and limit issuance of agency acquisition regulations and, in particular, local agency directives that restrain the flexibilities found in the FAR, and shall establish formal procedures for the review of these documents to assure compliance with this part  1.

          (b) Agency acquisition regulations shall not-

               (1) Unnecessarily repeat, paraphrase, or otherwise restate material contained in the FAR or higher-level agency acquisition regulations; or

               (2) Except as required by law or as provided in subpart  1.4 (deviations), conflict or be inconsistent with FAR content.

          (c) Agencies shall evaluate all regulatory coverage in agency acquisition regulations to determine if it could apply to other agencies. Coverage that is not peculiar to one agency shall be recommended for inclusion in the FAR.

    So, in summary, unless there is a law or an authorized deviation to the FAR/DFARS concerning your particular situation, it appears that your agency policy may not be restrain the flexibilty found in the FAR/DFARS.

    Be advised that it would be prudent to run your question and all opinions past your legal counsel.

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