Reserved Contract

Reserved Contract

The U.S. Federal Acquisition Regulation (FAR) defines a reserved contract as ‘a type of Federal contract in which an agency reserves the right to award contracts on a sole source basis to a particular source or sources’. In other words, a reserved contract is a government contract that is set aside for a specific company or companies.

There are two types of reserved contracts:

-Mandatory reserved contracts: These are reserved for small businesses, such as those that participate in the Small Business Administration’s (SBA) 8(a) program.

-Discretionary reserved contracts: These are typically used when an agency wants to promote competition among a limited number of companies or when there are only a few companies that can provide the goods or services required.