About this guide
Most of what you read about job order contracting describes how it works in practice. This page covers the written rules on the federal side. Two sets of regulations matter. The Federal Acquisition Regulation (FAR) sets the general rules for indefinite-quantity contracts, which is the contract family a JOC belongs to. The Army Federal Acquisition Regulation Supplement (AFARS) adds a short subpart written just for job order contracts. That subpart is an Army rule, so read it as the Army's approach, not a rule every federal agency follows. This is a plain-English summary, not legal or contracting advice. Check the current regulation text and your contracting office before you rely on it.[1][2]
Where a JOC fits in the FAR
The FAR does not have a section titled "job order contracting." A JOC is built on the indefinite-quantity contract in FAR Subpart 16.5. Under FAR 16.501-2, indefinite-quantity contracts (along with requirements contracts) are also known as delivery-order or task-order contracts. That is why people describe a JOC as an IDIQ, short for indefinite-delivery, indefinite-quantity.[2]
Three FAR rules shape every JOC built this way:
- A real minimum. FAR 16.504(a) says the government must order at least a stated minimum, and the contractor must deliver more if ordered, up to a stated maximum. The minimum has to be more than nominal, but it should not exceed what the government is fairly certain to order. FAR 16.501-2 adds that the government's obligation is limited to that minimum.
- What the solicitation must state. FAR 16.504(a)(4) requires the solicitation and contract to state the contract period and options, the total minimum and maximum, a description of the general scope of the work, the ordering procedures, and who is authorized to issue orders.
- What each order must do. Under FAR 16.505(a)(2), each order has to describe the work clearly enough that its full price can be set when the order is placed. It also has to be within the contract's scope, issued within its period of performance, and within its maximum value.
How the Army defines a JOC
AFARS 5117.9000 calls a JOC an indefinite-delivery, indefinite-quantity contract and an alternative way to handle repair, maintenance, and minor construction. It holds a comprehensive collection of task descriptions, units of measure, and pre-established unit prices, and each order is made up of several of those pre-described, pre-priced tasks.[1]
The same section sets a floor. Projects valued at or below the micro-purchase threshold for construction are generally considered a poor fit for a JOC, because processing a JOC order has administrative cost and simpler purchase methods exist for small buys.
Two definitions in AFARS 5117.9001 explain how the price is built. The JOC price book unit prices cover direct material, labor, and equipment. Indirect costs and profit are not in the unit prices; they go into the coefficient. For work in the continental United States, the price book is developed with commercially available pricing tools unless the contracting officer decides that is not in the government's best interest. If the price book and coefficient are new to you, start with how unit price books work and what a JOC coefficient is.
What a JOC may not be used for
AFARS 5117.9002 lists work that must not be bought through a JOC. Informal shop drawings and as-built drawings that are incidental to the job are still expected under a JOC.[1]
The excluded work:
- recurring facilities support services, such as utility plant operation, custodial work, grounds maintenance, and refuse collection and disposal
- architect-engineer services as defined in FAR 36.102
- design-build work as defined in FAR Subpart 36.3
When the Army says a JOC makes sense
AFARS 5117.9003-1 says a JOC should be considered when the yearly workload is large enough that its benefits outweigh the cost of setting it up and running it, counting both government staff time and contractor overhead. When sizing that workload, the Army leaves out two kinds of work: work normally reserved for the 8(a) program or set aside for small businesses, and work in-house staff can do effectively and economically.[1]
What goes into the solicitation
AFARS 5117.9004-2 adds JOC-specific requirements on top of the FAR:[1]
- The solicitation must include realistic and reasonable annual minimum and maximum dollar amounts. The regulation's stated reason is competition and lower coefficients: "Generally, the higher the minimum is, the lower the coefficient proposed will be."
- It must explain how the government unit prices are made up and list the types of costs the coefficient must cover at a minimum. Offerors may propose more than one coefficient, for example one for normal working hours and one for other hours.
- There is no separate repayment for bond premiums. The premium is recovered through the coefficient.
- The contract uses either an annual coefficient adjustment or an annually updated price book, but not both.
Placing an order
AFARS 5117.9004-3 says JOC orders follow FAR 16.505(a) unless the subpart says otherwise. The statement of work for each order must be detailed enough for the government to build an independent government estimate under FAR 36.203, and for the contractor to prepare a responsive proposal with as few non-prepriced tasks as possible. Before the order is issued, the statement of work is updated to match what was negotiated, including significant quantities, methods of construction, quality levels, and the number of days to finish. Our guide to how job orders work walks through that cycle step by step.[1][2]
The 10 percent limit on non-prepriced work
Under AFARS 5117.9004-3(c), the value of non-prepriced work in an order must not exceed 10 percent of the value of the pre-priced work. Pre-priced value is the coefficient times the price book unit prices.[1]
If non-prepriced work goes over 10 percent, the regulation says it should normally be reduced, eliminated, done in-house, or bought another way. A contracting officer may exceed 10 percent if it is justified and approved under FAR 6.302. The regulation also says non-prepriced work must not be described in a way that forces it into a pre-priced line item to get under the limit. For how to handle those items on a proposal, see prepriced vs. non-prepriced items.
Who can sign orders
AFARS 5117.9005 allows JOC ordering officers, people other than the contracting officer who are appointed to sign orders. Appointments are supposed to be kept to a minimum, and each ordering officer must be trained at least once a year.[1]
By default, an ordering officer may sign orders valued between the micro-purchase threshold for construction and the simplified acquisition threshold, as long as non-prepriced items are no more than 5 percent of the order. Note that this 5 percent limit for ordering officers is tighter than the 10 percent order limit above. The head of the contracting activity may authorize larger orders in writing, within the limit in 10 U.S.C. 2805(c), when management controls and training are in place, the contracting officer approves, and non-prepriced items stay at or under 5 percent.
Ordering officers must confirm with the contracting officer that the JOC has enough capacity before issuing an order, and must get a valid purchase request and commitment from resource management, confirming funds are available, before issuing an order or modification.
Yearly oversight
AFARS 5117.9006 requires the contracting officer to have ordering officer files and procedures reviewed at least once a year, and to track a representative sample of orders from the start of the requirement through final payment and closeout.[1]
Quick reference
[1][2]| Rule | Where | What it says |
|---|---|---|
| JOC is an IDIQ | AFARS 5117.9000, FAR 16.501-2 | Indefinite-quantity contracts are also called task-order contracts |
| Minimum and maximum | FAR 16.504(a) | Government must order the minimum; contractor furnishes up to the maximum |
| Order content | FAR 16.505(a)(2) | Full price set when placed; in scope, in period, under the maximum |
| Small projects | AFARS 5117.9000 | At or below the construction micro-purchase threshold, generally inappropriate |
| Excluded work | AFARS 5117.9002 | No recurring facilities support, A-E services, or design-build |
| Annual amounts | AFARS 5117.9004-2 | Realistic annual minimum and maximum dollar amounts required |
| Bond premiums | AFARS 5117.9004-2 | Recovered through the coefficient, no separate repayment |
| Non-prepriced cap | AFARS 5117.9004-3(c) | 10 percent of pre-priced value unless justified under FAR 6.302 |
| Ordering officers | AFARS 5117.9005 | Up to the simplified acquisition threshold, non-prepriced 5 percent or less |
| Annual review | AFARS 5117.9006 | Files reviewed and sample orders tracked at least yearly |
Sources: Army Federal Acquisition Regulation Supplement Subpart 5117.90 and Federal Acquisition Regulation Subpart 16.5. Regulation text checked November 5, 2026. Federal acquisition rules are revised from time to time, and thresholds are adjusted, so confirm the current text before you act on it.