What Is an Undefinitized Contract Action (UCA)?

What Is an Undefinitized Contract Action (UCA)?

If you're selling to the federal government or planning to, it's important to understand a tool known as an **Undefinitized Contract Action**, or **UCA**. A UCA allows a company to begin work before the full contract details—such as pricing, scope, and schedule—are finalized.

While this can help you start working faster, it also comes with risk. UCAs are typically used when there’s an urgent need and the government can’t afford to wait.

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Why Does the Government Use UCAs?

UCAs are used when quick action is required and the standard acquisition process would take too long. Examples include:

- Emergency response after a natural disaster
- Supplying critical parts to support deployed military units
- Beginning work on time-sensitive technology projects

Rather than delay action, the government issues a UCA to authorize work to begin immediately while the full contract is negotiated.

Relevant regulations include:
- **Federal Acquisition Regulation (FAR) 16.603** – Letter Contracts
- **Defense Federal Acquisition Regulation Supplement (DFARS) 217.74** – Undefinitized Contract Actions

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What Does “Undefinitized” Mean?

A contract is “undefinitized” when its key terms—such as final price and full scope of work—have not been agreed to in writing. However, the government authorizes work to start based on preliminary terms, including:

- A statement of work or limited description of services
- A funding ceiling or Not-To-Exceed (NTE) amount
- A target date by which the full contract must be finalized (also known as “definitized”)

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What Are the Rules for UCAs?

UCAs are closely regulated to protect both the government and the contractor. Here are a few key rules:

**Time Limit for Definitization**
The contract must be definitized within **180 days** from the date of the UCA or before 50% of the work is completed—whichever comes first.
**Source:** DFARS 217.7404-3(a)

**Funding Restrictions**
Except in rare cases, the government cannot obligate more than **50%** of the estimated contract value before the contract is definitized.
**Source:** DFARS 217.7404-4

**Justification Requirements**
The contracting officer must justify the need for a UCA in writing and obtain approvals based on agency policy.
**Source:** DFARS 217.7404-1

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Should You Accept a UCA?

UCAs are not for every business. But for companies that are agile and experienced, they can open doors to high-value work.

**Advantages:**
- Faster project starts
- Builds trust with federal buyers
- May lead to additional follow-on contracts

**Risks:**
- Lack of finalized pricing or terms
- Potential to lose money if actual costs are higher than estimated
- Pressure to perform without full contractual protections

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How to Prepare for a UCA

If you're interested in winning UCA work, here are a few tips:

1. Build relationships with contracting officers in your target agencies.
2. Maintain readiness in staffing, pricing, and documentation to move quickly.
3. Understand all FAR and DFARS clauses related to UCAs.
4. Work with a contract attorney or acquisition specialist before accepting a UCA.

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Final Thoughts

Undefinitized Contract Actions are designed to help the government move fast when it matters most. They offer opportunity for experienced vendors that can deliver on short timelines—but they also carry risk if not properly managed.

If you’re serious about doing business with the federal government, it’s essential to understand when UCAs are used, how they’re structured, and how to protect your business.

At **GovClose**, we help companies of all sizes navigate complex government sales strategies, including proposal writing, pre-award engagement, and post-award execution.

Learn more about how our certification program prepares you to win in today’s government contracting environment at our you tube channel: Government Contracting YouTube Channel

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**Legal Disclaimer:**
This blog post is provided for general informational purposes only and does not constitute legal, financial, or business advice. The information is not guaranteed to be complete, accurate, or up to date. For guidance on any specific matter, including interpreting FAR or DFARS clauses, consult with a qualified government contracts attorney. Use of this information is at your own risk.