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Federal procurement is the largest buying operation in the world, with U.S. agencies spending hundreds of billions of dollars a year on goods and services. For companies, understanding how that spending is governed — the rules, the contract vehicles, and how award decisions are made — is the foundation of a successful federal strategy. At the center of it all is the Federal Acquisition Regulation, or FAR. This primer covers what you need to know.
Federal procurement is the process by which executive-branch agencies — the Department of Defense, civilian agencies like GSA, HHS, and DHS, and their many components — buy goods and services using appropriated funds. Unlike commercial purchasing, federal buying is governed by law and regulation. The cornerstone is the Federal Acquisition Regulation (FAR), codified in Title 48 of the Code of Federal Regulations, with the DFARS adding defense-specific rules on top. The guiding principles are full and open competition, integrity, and fair treatment so that every responsible offeror has a fair opportunity to compete for public dollars.
How an agency buys depends largely on the dollar value. Micro-purchases — generally up to $10,000 — can be made with a government purchase card and minimal process. Acquisitions up to the Simplified Acquisition Threshold (currently $250,000) can use the streamlined procedures of FAR Part 13, often as an RFQ with fewer formalities. Above that level, agencies typically run a full RFP under FAR Part 15 with formal Section L instructions and Section M evaluation factors. There is also a commercial-products threshold under FAR Part 12 that lets agencies buy commercial items with simplified terms. These dollar figures are adjusted for inflation periodically — always confirm the current thresholds in the FAR before relying on them.
Negotiated proposals are evaluated against the factors published in Section M of the solicitation. Many awards use a best-value tradeoff, where the agency weighs non-price factors — technical approach, management, and past performance — against price and may pay more for a stronger proposal. Others use lowest-price technically acceptable (LPTA), where the cheapest compliant proposal wins. Evaluators assign adjectival or color ratings and document strengths, weaknesses, and deficiencies in a source selection record. The single biggest driver of success is understanding exactly what each factor is assessing — and writing directly and compliantly to Section L and Section M.
The Federal Acquisition Regulation is the uniform rulebook every executive agency must follow, covering competition, contract types, clauses, ethics, and small business participation under FAR Part 19. Defense components add the Defense Federal Acquisition Regulation Supplement (DFARS), which layers in requirements such as cybersecurity (DFARS 252.204-7012 and CMMC) and domestic-sourcing rules. Each agency may also issue its own FAR supplement. Offerors should know which clauses apply to a given solicitation, because the incorporated FAR and DFARS clauses define your obligations once you are on contract.
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