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Parent topic: Subpart 16.6 - Time-and-Materials, Labor-Hour, and Letter Contracts
Letter contracts (FAR Part 16.603), also known as Undefinitized Contract Actions (UCA), are a means to authorize a contractor to immediately begin delivering supplies or performing services before the terms and conditions of the contract can be agreed upon.
(a) A letter contract may be used when (1) the Government’s interests demand that the contractor be given a binding commitment so that work can start immediately and (2) negotiating a definitive contract is not possible in sufficient time to meet the requirement.
Letter contracts await negotiation to definitize prices. An undefinitized contract action (UCA) is a contract action which contains some aspect that is left open, to be determined prior to the start of contract performance.
Undefinitized Contract Actions (UCA) (DFARS 217.7401), also called Letter Contracts, are those contract actions for which the contract terms, specifications, or price are not agreed upon before performance commences.
Letter contracts are defined in FAR Part 16 as a written preliminary contractual instrument that authorizes the contractor to immediately begin work. By definition, a letter contract is an undefinitized contract action. When people speak of “UCAs,” they frequently are talking about letter contracts.
Need your subcontractor to start work? A Letter Contract may be the right path, but understand the risks and review the requirements.
UCAs, sometimes called “letter contracts” (see FAR 16.603-1), are used to create contracts with the government when one or more elements of a contract cannot be agreed upon, and there is an urgent need to begin production.
A letter contract is a written preliminary contractual instrument that authorizes the contractor to begin immediately manufacturing supplies or performing services.
What Is a Letter Agreement? A letter agreement — also called a "letter of agreement" or an "agreement letter" — documents an agreement between two or more parties. The agreement is structured as if it were a letter, with separate paragraphs, a date line, and places at the bottom for signatures.