- Their purchasing power must come from a specific legislative source of funding. In other words, Congress—which holds the “power of the purse”—must have approved the expense or department budget.
- The agreement must follow the federal acquisition rules, most of which are derived in some way from the Federal Acquisition Reform Act (FARA) or the Federal Acquisition Regulations (FAR, found in Title 48 of the United States Code of Federal Regulations). These laws set guidelines, safeguards, fees, whistleblower protections, administrative rules for contracts and many other regulations.
In addition, federal contracts must be executed or authorized by a contracting officer (usually the head of the appropriate agency) who has the authority to bind the federal government. Both goods and services can be the subject of federal acquisition contracts, although special performance-based rules apply to service agreements. The acquisition regulations and process are provided in detail at Acquisition Central (www.acquisition.gov).