Navigating government contracts can be challenging, especially when it comes to understanding the regulations that govern them. For government contractors, two essential regulatory frameworks to understand are FAR and DFAR.
Whether you're a seasoned contractor or new to the industry, understanding FAR and DFAR is vital for maintaining compliance and managing contracts effectively. Staying current with these regulations keeps your organization audit-ready and positioned for success in the federal marketplace.
The Federal Acquisition Regulation (FAR) is the primary set of rules governing federal procurement processes. It applies across all federal agencies and outlines the regulations contractors must follow when providing goods or services to the government. For more on the role of FAR in compliance, check out Unanet's DCAA Compliance Guide.
DFARS, or the Defense Federal Acquisition Regulation Supplement, builds on FAR and applies specifically to the Department of Defense (DoD). It introduces additional requirements and clauses for defense contractors, particularly in areas such as cybersecurity, safeguarding sensitive information, and supporting national security.
Together, FAR and DFARS form the backbone of regulatory standards that contractors must meet to maintain government contract compliance.
While both FAR and DFARS frameworks regulate federal procurement processes, they serve different scopes and purposes:
Scope:
Far is broader and it applies to all federal agencies while DFARS is specific to defense contracts
DFARS includes clauses that address national defense priorities, such as safeguarding Controlled Unclassified Information (CUI) and requirements for domestic manufacturing.
Unique requirements
DFARS mandates higher cybersecurity standards for defense contractors, such as compliance with DFARS 252.204-7012, which focuses on protecting sensitive defense-related information.
These differences are crucial for any contractor working in the defense sector. Failing to comply with DFAR requirements can lead to serious consequences, including contract loss or penalties.
If you're navigating the complexities of government contract compliance under DFARS, don’t miss our article on Contractor Purchasing System Review (CPSR) compliance for actionable insights on meeting CPSR standards.
To maintain government contract compliance, understanding the obligations under FAR and DFAR is critical. While FAR applies to all federal government contractors, DFARS compliance is mandatory for any contractor working with the Department of Defense.
Here’s a quick breakdown of what contractors need to know:
FAR compliance
FAR spans over 2,300 pages and outlines the rules for virtually every aspect of federal contracting. To remain compliant, contractors must:
For a deeper dive, check out our guide on Allowable vs. Unallowable Costs to understand how cost management fits into FAR compliance.
DFARS compliance
DFARS adds an extra layer of complexity, especially in areas like cybersecurity. Defense contractors must:
Compliance with DFAR requirements is not optional. Violations can lead to audits, penalties, or even exclusion from future DoD contracts.
Maintaining full FAR and DFAR compliance is vital to staying competitive in the federal and defense contracting space. Make sure you have the right tools to navigate the complexities of government contract compliance.
Understanding how FAR and DFAR affect small businesses is essential for achieving and maintaining government contract compliance. While these regulations can present significant challenges, they also offer valuable opportunities for growth within the federal and defense contracting space.
Opportunities for small businesses
Both FAR and DFARS contain provisions specifically designed to promote small business participation. This includes:
Despite these advantages, many small businesses struggle with:
Fortunately, organizations like the Small Business Administration (SBA) offer guidance, training, and support to help small businesses meet government contract compliance requirements.
Want more tips for navigating the world of federal contracts? Check out our article on The Basics of Government Contracts for practical insights and expert advice.
When it comes to government contract compliance, staying current with updates to FAR and DFAR is critical. These regulations are frequently revised to address shifting priorities such as cybersecurity, supply chain risk, and national security. For contractors working with federal or defense agencies, failing to keep up can result in costly missteps.
Here are a few best practices to help your team stay compliant:
Regularly visit trusted websites like Acquisition.gov for the latest updates to FAR and DFAR clauses. These platforms provide real-time regulatory changes that impact your contract requirements.
Subscribe to industry newsletters: Many industry organizations and compliance groups offer newsletters that highlight changes in government contracting regulations.
Software platforms like Unanet GovCon ERP are designed to simplify FAR and DFAR compliance. With features that track updates, manage documentation, and streamline audit readiness, Unanet helps you stay ahead of evolving regulatory demands—without the manual headache.
Staying informed, adopting compliance best practices, and using the right tools are essential for long-term success in the federal contracting space. FAR and DFAR aren’t the only regulations you’ll encounter, but they are among the most important.
Want to simplify your compliance process and focus on growing your business?
Learn how Unanet can help. Schedule a demo today.