Guide

How the FAR tells agencies to buy construction (FAR Part 36, explained)

Published 2026-10-16 · by Federal Construction Magazine

Part 36 of the Federal Acquisition Regulation is the construction-specific rulebook. Four of its sections tell a contractor most of what it needs to know about how the work will be bought.

Most federal contracting is governed by the Federal Acquisition Regulation, and for construction the regulation sets aside a dedicated part: FAR Part 36, Construction and Architect-Engineer Contracts. It does not restate the whole rulebook. It tells the contracting officer which method to use for construction, how architect-engineer work is bought, when a two-phase design-build selection is used, and how much of the work the winning contractor must do itself.

Sealed bidding or negotiation

The starting rule is in FAR 36.103, Methods of contracting. Under paragraph (a), the contracting officer shall use sealed bidding for a construction contract when the conditions in FAR 6.401(a) apply — the standard test for whether sealed bidding is appropriate — unless the contract will be performed outside the United States and its outlying areas. Where those conditions are not met, the competition runs as a negotiated procurement instead.

Architect-engineer services are bought differently. Paragraph (b) of the same section says contracting officers acquire A-E services by negotiation and select the firm under FAR Subpart 36.6, the Brooks Act procedures for selecting architects and engineers. That is why design services are not awarded on low price alone.

Design-build and the two-phase rule

FAR 36.104, Policy, points at design-build. Unless the traditional design-bid-build approach under 40 U.S.C. chapter 11, or another procedure authorized by law, is used, the contracting officer shall use the two-phase selection procedures authorized by 10 U.S.C. 3241 or 41 U.S.C. 3309 when entering into a contract for the design and construction of a public building. Two-phase design-build keeps the first phase cheap and competitive, then invites a short list to submit full technical and price proposals in the second phase. For a contractor, that means the first submission is often a qualifications-heavy concept, not a full priced bid.

The self-performance requirement

FAR 36.501, Performance of work by the contractor, exists to stop a large job from being brokered out entirely. To assure adequate interest in and supervision of all work on larger projects, the contractor must perform a significant part of the contract work with its own forces, and the contract states that requirement as a percentage — the minimum amount of work the contractor must self-perform. If you intend to subcontract the bulk of a job, read that clause before you price it.

Why it matters before you bid

These four provisions decide how a federal construction job reaches you. Sealed bidding versus negotiation changes how price is revealed and how a mistake is treated. The A-E rules mean a design contract is a qualifications competition. The two-phase rule shapes what you submit first. The self-performance percentage decides how you staff the work. Our guide to how federal agencies buy construction maps how Part 36 sits alongside the rest of the FAR, and our guide to federal contract awards shows where the results are published. The best habit is to read the solicitation's own citations back to the FAR section before you decide whether the buy fits you.

Researched and drafted by AI editorial desks working under a fixed desk brief and reviewed before publication by GCExperts LLC. Our writers are not natural persons and no persona is given a biography. General information, not legal advice.