Concurrent Contracts and A-E Construction Work: FAR 36.208 and 36.209 Explained
When preparing bids for federal construction, small general contractors and trade subcontractors must look beyond standard plan specifications to understand the governing procurement regulations. Two critical sections under Federal Acquisition Regulation (FAR) Subpart 36.2 establish firm boundaries regarding contract structure and entity eligibility. Understanding how these rules operate prevents costly bidding oversights, clarifies who can build the project, and highlights how jobsite contract structures are managed.
Why Does Federal Procurement Restrict Concurrent Contracts Under FAR 36.208?
Federal acquisition guidelines deliberately limit the mixing of different procurement structures on a single jobsite. According to FAR 36.208, these restrictions exist specifically in view of potential labor and administrative problems that arise when different payment mechanics overlap in the same work environment.
When multiple contracting approaches operate simultaneously in the same physical space, prime contractors and contracting officers face significant friction. Tracking workforce allocations, sorting out supervisory oversight, and isolating administrative duties become complex. To avoid disputes, federal rules limit the commingling of risk structures unless formal approval has been granted.
Which Specific Contract Types Cannot Run Concurrently at the Same Work Site?
The regulation draws a clear line between fixed pricing and variable-cost agreements. Per the standard outlined in FAR 36.208, agencies shall not permit the following contract types to run concurrently at the same work site:
- Cost-plus-fixed-fee contracts
- Price-incentive contracts
- Other types of contracts with cost variation or cost adjustment features
These variable arrangements cannot run side by side at the same location with firm-fixed-price, lump sum, or unit price contracts. Understanding these boundaries helps estimators evaluate the terms outlined in prime solicitations, especially when comparing project delivery formats such as Lump Sum vs. Unit Price vs. Cost-Plus structures.
Who Holds the Authority to Approve Concurrent Contracts?
While the baseline policy prohibits mixing fixed-price and cost-variation models at the same location, the regulation does not establish an absolute bar. Under FAR 36.208, concurrent performance at the same work site is permitted only with the prior approval of the head of the contracting activity.
Without this explicit, high-level administrative determination, contracting officers cannot execute or combine these differing contract instruments across identical physical sites. Subcontractors reviewing prime contract structures should recognize that dual-method sites require this formal prior authorization before work can proceed.
Can an Architect-Engineer Firm Win the Construction Contract for Its Own Design?
Federal procurement enforces an explicit separation between the entity that draws the plans and the entity that builds the physical facility. Under FAR 36.209, no contract for the construction of a project shall be awarded to the firm that designed the project or its subsidiaries or affiliates.
This barrier prevents structural conflicts of interest and ensures independent checks on drawings, specifications, and project estimating. Subcontractors and specialty tradesāsuch as framing, drywall, or ceiling installersādo not have to worry about competing against the original design entity or its related corporate entities when bidding on federal construction solicitations, as the designing firm is barred by default.
Who Can Grant an Exception Under FAR 36.209 for Design Entities?
Just as with concurrent contract types, the restriction against awarding construction work to a project's designer has a single administrative escape hatch. The regulation states that an award to the design firm, its subsidiaries, or its affiliates is prohibited except with the approval of the head of the agency or authorized representative.
This exception is narrowly held. Because standard contracting officers do not hold unilateral discretion to waive this rule, any solicitation where an affiliated design entity attempts to participate in the physical construction requires approval from the head of the agency or an authorized representative. Trade contractors structuring proposals should incorporate careful scope reviews and Bid Exclusions and Clarifications to verify that prime entities meet these baseline procurement standards.
What Should Subcontractors and Small GCs Verify Before Bidding?
Before investing estimating hours into federal work, trade contractors and small builders should verify the commercial terms and team relationships established by the government. Ensuring compliance with FAR 36.208 and FAR 36.209 protects bidders from disrupted jobsite administration or canceled awards:
- Confirm the pricing structure of the solicitation to see if fixed-price and cost-adjustment features are improperly combined on the same site without approval.
- Review the prime contractor team to confirm that the construction entity is neither the original design firm nor an affiliate of that firm.
- Check solicitation documents for any required administrative determinations from the head of the contracting activity or head of the agency if specialized project delivery combinations are utilized.
Sources
FAR 36.209 Construction contracts with architect-engineer firms. | Acquisition.GOV
Published October 29, 2026. No affiliate links on this page. Facts come from the sources linked above; check them for updates.