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  • Question

    Is it reasonable to interpret that the use of "should" in FAR 36.204 permits the Government, in the proper circumstance, to narrow the range of magnitude? Specifically, are we strictly bound by the magnitude ranges set forth in DFARS 236.204 and FAR 36.204? Or can we narrow the range if determined appropriate? Thanks in advance for your assistance


    Answer

    As you state, FAR 36.204 outlines ranges to be used in construction contracts and provides that the estimated price “should” be described in terms of stated price ranges.  The DFARS 236.204 provides additional ranges which are, in some instances, still very broad.  The definition of “should” in FAR 2.101 means an expected course of action or policy that may be followed unless appropriate for a particular circumstance. 
     
    The decision as to whether a specific range is appropriate for a particular circumstance is left to the Contracting Officer.  FAR 1.102-4 Role of the Acquisition Team, empowers members of the acquisition team to make decisions within their areas of responsibility consistent with the guiding principles found at FAR 1.102, Statement of Guiding Principles for the Federal Acquisition System .  It goes on to say that the Contracting Officer must “have the authority to the maximum extent practicable and consistent with law, to determine the application of rules, regulations, and policies on a specific contract.”  Paragraph (e) says that “ If a policy or procedure, or a particular strategy or practice, is in the best interest of the Government and is not specifically addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, Government members of the Team should not assume it is prohibited. Rather, absence of direction should be interpreted as permitting the Team to innovate and use sound business judgment that is otherwise consistent with law and within the limits of their authority. Contracting officers should take the lead in encouraging business process innovations and ensuring that business decisions are sound.”
     
    Given the FAR guidance outlined above, the Contracting Officer is encouraged to use sound business judgment and a decision to determine an alternate range could certainly be supported.
     

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