The D&F must establish that no other contract type is suitable — a test that AI acquisitions increasingly fail, because the platform portion can now be bought
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Before a time-and-materials or labor-hour award, the contracting officer signs a Determination and Findings establishing that no other contract type is suitable. FAR requires it to describe the market research conducted, establish that it is not possible to accurately estimate the extent or duration of the work or to anticipate costs with reasonable certainty, and address why a cost-plus-fixed-fee term, other cost-reimbursement, incentive, or fixed-price arrangement is not appropriate.
For AI services this document has quietly become harder to write well, and the reason is not legal. It is that the underlying market changed faster than acquisition templates did.
A D&F asserting that AI capability cannot be estimated is defensible when the contractor must build a platform. It is considerably weaker when a production platform can be licensed with source rights, because then the unestimable portion shrinks to integration against named systems — which is exactly the kind of work a fixed-price arrangement handles.
This guide covers what the document must contain, the specific test to apply for AI, and the market-research step that dates faster than any other part of an acquisition plan.
For AI infrastructure, research more than roughly two years old is likely to be wrong about what can be bought rather than built.
These have completely different estimability profiles, and merging them is what makes an unestimable-work assertion look true.
If integration against named systems can be estimated, the fixed-price alternative has to be addressed seriously.
Contract type and rights are separate decisions, and the D&F is a good forcing function for settling the second.
The most common defect in an AI D&F is market research conducted at the level of 'AI services' rather than at the level of the platform capabilities the requirement actually needs.
Retrieval, evaluation, guardrails, access control, audit logging, model routing, agent orchestration.
On-premise, GovCloud, air-gapped operation.
This field matters more here than in most acquisitions.
The standard is that it is not possible to accurately estimate the extent or duration of the work. Applied honestly, that is often true of building a platform and often false of integrating one.
Usually not, which is why T&M is reached for.
Usually yes, given a defined endpoint list.
The requirement is to explain why cost-plus-fixed-fee, other cost-reimbursement, incentive, and fixed-price arrangements are not appropriate. Generic language here is what makes a determination fragile on review.
For AI, an evaluation-set pass rate often supplies one.
The ceiling belongs to the determination's logic. A ceiling derived from available budget contradicts the assertion that the work was carefully assessed.
AI acquisition documents frequently reuse reasoning from an era when no production platform could be licensed with source rights. That reasoning is what a reviewer will test first.
Building a platform is genuinely hard to estimate. Integrating an existing one against a named endpoint list is not. Merging them into a single assertion is what makes an unestimable-work finding look defensible when it is not.
Incentive and fixed-price arrangements are often dismissed on the grounds that AI performance cannot be measured objectively. A held-out evaluation set with an agreed threshold undermines that reasoning.
A D&F is a useful forcing function for settling what the agency must be able to operate and modify independently, because that requirement often changes which alternatives are viable.
Determinations that rest on stale market research tend to be tested at exactly the moment a programme is under scrutiny for other reasons.
Compare the research date against the determination date
Review the determination for separate findings rather than a single global assertion
Legal review flags no boilerplate in the alternatives analysis
Reconcile the ceiling to the estimate rather than to the budget line
Consequence: The determination rests on a description of a market that no longer exists.
Prevention: Re-run research against the specific platform capabilities the requirement implies, and date it.
Consequence: A finding that is true of one portion and false of another, which is exactly what a reviewer will separate.
Prevention: Assess platform construction and integration independently and state both conclusions.
Consequence: The alternatives analysis reads as pro forma and weakens the entire determination.
Prevention: Address firm-fixed-price against the platform-licence option specifically.
Consequence: The document asserts careful assessment while the ceiling shows otherwise.
Prevention: Derive the ceiling from the independent estimate and show the derivation.
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