The contracting world that runs on funds the government generated, not funds Congress appropriated. Different rule book, different protest channel, different clause set. This module has four parts: What is NAF?, What it looks like, Execution, and Templates.
Picture the base bowling alley, the lodging desk, the golf course pro shop, the Force Support Squadron youth center. The money those activities take in (greens fees, lodging room rates, cafe sales, vending profits) does not flow back to the U.S. Treasury and does not get re-appropriated by Congress. It stays inside the activity that generated it and pays for that activity's ongoing needs. That money is Nonappropriated Funds, and the entity that holds and spends it is a Nonappropriated Fund Instrumentality, a NAFI for short.
NAF is government money that was never appropriated. It buys government things, on government property, for a government mission, with no claim on the U.S. Treasury.
The legal status of a NAFI is unusual. Per the standard NAF contract clauses, a NAFI is "an instrumentality of the United States Government" and "enjoys the same immunities and privileges as the U.S. Government in the absence of specific Federal statute." So it is the government for some purposes (sovereign immunity, anti-deficiency oversight) but it is not the government for others (Contract Disputes Act jurisdiction, Government Accountability Office bid-protest jurisdiction). That split is the source of most of the confusion.
Common Air Force NAFIs include the Force Support Squadron's Morale, Welfare, and Recreation (MWR) programs, Air Force Lodging, the Air Force Aero Clubs, the Army & Air Force Exchange Service (AAFES), and category-A through category-C MWR activities. The local Force Support Squadron Commander typically signs the surveillance certifications.
The standard NAF contract has one operative line that locks the boundary in place: "No appropriated funds of the United States shall become due or be paid the Contractor by reason of this contract." If a contractor performing on a NAF agreement ever tries to invoice appropriated dollars, the answer is no. The instrument itself forecloses it.
Three documents control the field for an Air Force NAF Contracting Officer:
One operational reality the Air Force has built around all of this is the Air Force Nonappropriated Fund Purchasing Office (AFNAFPO) at afnafpo.afsv.net. AFNAFPO publishes the standard clauses, the surveillance checklist and memo templates, the contract templates, the warrant database, and the centralized vehicle and lodging purchasing programs. If a question about NAF contracting has an authoritative answer, AFNAFPO is the place to find it. The training pages link to it more than once because there is no good reason to duplicate what AFNAFPO already publishes.
An installation has a NAF Contracting Officer (sometimes more than one) embedded in the Force Support Squadron with a NAF warrant from AFNAFPO. That NAF CO handles most NAF actions all the way through. So why would an operational contracting officer over in Base Support Contracting (BSCO) ever touch a NAF requirement?
The everyday answer is the NAF CO's warrant ceiling. NAF warrants are personal and specific to the position. The amount varies by individual, by installation, and by the level of NAF activity. Whatever the warrant ceiling is on file, when a NAF requirement exceeds it, the action handing off to BSCO is the most common path you will see in practice.
There are also a handful of category-specific ceiling drops baked into DAFMAN 64-119 that send work to BSCO regardless of the warrant amount. They are real but they fire less often than the warrant trigger:
| Category and trigger | NAF CO ceiling | Above the ceiling |
|---|---|---|
| Everyday case: any requirement (CONUS or overseas) | The NAF CO's warrant amount | BSCO or another CO with appropriate authority |
| Construction (CONUS) when Construction Wage Rate Requirements (Davis-Bacon) applies | $2,000 | BSCO awards the contract |
| Nonpersonal services (CONUS) when Service Contract Labor Standards (SCLS) applies | $2,500 in the aggregate | BSCO awards the contract |
| Entertainment | $500,000 | BSCO awards the contract |
The Davis-Bacon and SCLS rows look severe because the dollar numbers are tiny, but the trigger is narrow: Davis-Bacon applies only to NAF construction subject to the Construction Wage Rate Requirements, and SCLS applies only to nonpersonal-service contracts that fall under the Service Contract Labor Standards. Most NAF buys at the local level are commercial supply or services that do not invoke either statute, so the warrant ceiling is what actually moves the work to BSCO.
However the handoff happens, the rule book stays NAF: still DAFMAN 64-119, still the NAF Standard Clauses, still no FAR. The contracting work sits with operational contracting; the framework does not change.
The Federal Acquisition Regulation does not govern NAF contracts. CICA does not apply. The Contract Disputes Act does not apply (with one exception covered below). The Truth in Negotiations Act does not apply. Source-selection procedures from FAR 15.3 do not apply.
What does apply is the parallel framework: DoDI 4105.67, DAFMAN 64-119, the NAF Standard Clauses, and the NAF Standard Clauses Incorporated by Reference (the NFC- series). The two clause sets together cover the territory FAR 52 and DFARS 252 cover for appropriated-funds work.
Several FAR provisions are pulled in by reference inside specific NAF clauses, which sometimes catches new readers off guard. The most common imports:
Federal statutes also apply directly because they are statutes, not FAR clauses: the Fair Labor Standards Act, Service Contract Labor Standards, Davis-Bacon Act, the Defense Base Act for overseas performance, EO 14026 contractor minimum wage, EO 13706 contractor paid sick leave, and the Section 889 covered-telecom prohibition.
This is the area where bringing FAR muscle memory into a NAF action causes the most damage. The forums are different.
| Issue | Where it goes for a NAF contract |
|---|---|
| Bid protest before award | Filed with the Contracting Officer who issued the solicitation, in strict accordance with DAFMAN 64-119. Not GAO. |
| Protest of award | Same channel. CO decides. Internal Air Force appeal channel applies. GAO does not have jurisdiction over a NAF-buying-office award. |
| Claims under the contract | Submitted to the CO. CO issues a final decision per DAFMAN 64-119. Claims of $100,000 or more must be certified by the contractor. |
| Appeal of CO final decision | Armed Services Board of Contract Appeals (ASBCA), within 90 days of receipt of the final decision. Some claims may also go to the U.S. Court of Federal Claims. |
The Contract Disputes Act does not apply, but ASBCA is still the appellate forum because the standard NAF contract clause assigns it that role. That is unusual. ASBCA otherwise hears CDA cases. Here, jurisdiction comes from the contract itself.
Two things should set off your radar before you sign anything that touches NAF:
If the customer says "we're funding this with a mix," stop and route to legal before drafting. The clean answer is almost always two contracts, one of each type.
The next tab walks through one NAF requirement from a unit walk-in to a signed agreement, so the procedural pieces have a story.
This walks through one realistic NAF action from a unit walk-in to a signed contract. The numbers and names are illustrative. The procedure follows DAFMAN 64-119.
The setup. The Force Support Squadron's Outdoor Recreation program runs a paintball field on base. The current paintball-equipment vendor's contract is about to expire. The Outdoor Rec director walks into the NAF Contracting Officer's office with a renewal requirement: paintball equipment supply, ammunition replenishment, and on-site equipment maintenance. Estimated annual value $42,000. Funded entirely by Outdoor Rec program revenue (NAF). Service Contract Labor Standards does not apply (this is supply with incidental services, not a service contract subject to SCLS).
The NAF Contracting Officer triages on three things first:
The NAF CO logs the requirement in the NAF electronic purchasing system, opens a working file, and tells the director the next step is a clean Purchase Request with a written specification.
The Outdoor Rec director comes back two days later with the Purchase Request. The NAF CO reviews the specification for performance language (the surveillance checklist looks for this). The spec describes:
The NAF CO confirms the Essential Products Program list does not contain a mandatory product for this category, so the open-market path is clear.
Above $10,000, DAFMAN 64-119 requires solicitation of at least two sources for an Open Market action. The NAF CO drafts a request for quote built on the AFNAFPO Concessionaire / Service contract template framework, with the NAF Standard Clauses incorporated and the appropriate NFC- clauses listed.
Sources solicited:
Quotes due in 14 days. The solicitation states: price-reasonableness analysis will be conducted on the awarded price; award will be made to the responsible quoter offering the best value to the government considering price and past performance.
Two quotes come back:
The NAF CO documents price reasonableness against three reference points: prior-year actual prices on the expiring contract, the second quote received, and a quick parametric check on the per-unit ammunition pricing using publicly available commercial data. All three confirm the awarded price is fair and reasonable.
The NAF CO documents past performance in writing, references the two phone calls to the regional supplier's installation references, and writes a short best-value determination in the file.
The NAF CO awards a Concessionaire / Service contract template to the regional supplier at $39,200 base plus four priced options. The contract incorporates:
Day 0: Walk-in. Day 2: Purchase Request and specification received. Day 5: Solicitation issued to two sources. Day 19: Quotes due. Day 22: Evaluation complete; price reasonableness documented; best-value determination written. Day 24: Contract awarded. Day 30: Vendor performs.
The NAF CO appoints a Contracting Officer Representative (the Outdoor Rec director or their designee) and provides a written delegation of authority listing what the COR can and cannot do. The COR completes acceptance within one business day of each delivery (the surveillance checklist looks for this).
Invoices come in. The Prompt Payment Act applies. The NAF CO processes payment per the standard NAF Invoices and Payments clauses.
At the end of the period of performance, the contract closes out in the NAF electronic purchasing system. The next year, the activity exercises the option (or competes the requirement again, depending on the option-exercise determination).
Suppose the regional supplier had not won. They file a protest. Where does it go?
If a BSCO operational CO had awarded the same contract because the dollar value pushed it over a threshold, the answer changes: GAO would have jurisdiction, and the CO would handle the protest under appropriated-funds dispute procedures. Same contract content, different forum, because the buying office is different.
The Execution tab is the procedural reference: solicitation methods, contract types, modifications, ratifications, surveillance, term limits.
NAF contracting authority comes from a NAF warrant issued by AFNAFPO, not from a FAR-based SF 1402. The warrant names the individual, sets the dollar limit, and is tied to the position. When a NAF CO leaves the position, the FSS Commander is required to notify AFNAFPO and AFNAFPO terminates the warrant.
Per DAFMAN 64-119, every NAF Contracting Officer must complete the NAF CO Refresher Course annually. The annual surveillance program checks for completion. The FSS Commander signs the annual certification.
The Force Support Squadron Commander runs an annual procurement meeting and reviews warrant appointments. The annual NAF Surveillance Checklist (the same document AFNAFPO publishes as a template) is completed and signed by the NAF CO, certified by the FSS Commander, and submitted to AFNAFPO no later than 30 November each year.
The dollar thresholds in NAF contracting do not match FAR thresholds. They have their own logic.
| Threshold | What it triggers |
|---|---|
| Up to $10,000 (Open Market) | NAF CO can buy with documented analysis. Two-source rule does not strictly apply at this level. |
| Above $10,000 | Documented price reasonableness analysis required. At least two sources must be solicited for Open Market awards. |
| Up to $250,000 (Open Market) | Open Market authority for the NAF CO. |
| NAF CO warrant ceiling (varies by warrant) | The everyday handoff. Above the warrant amount, BSCO awards. |
| Construction (CONUS), $2,000 or more, Davis-Bacon applies | BSCO awards. NAF CO ceiling is $2,000 in this narrow case. |
| Nonpersonal services (CONUS), $2,500 or more aggregate, SCLS applies | BSCO awards. NAF CO ceiling is $2,500 aggregate in this narrow case. |
| Entertainment over $500,000 | BSCO awards. |
| Ratification up to $50,000 | FSS Commander approves. |
| Ratification above $50,000 | AFSVC Vice Commander or VP approves. |
| Claim of $100,000 or more | Contractor must certify the claim before the NAF CO issues a final decision. |
In practice, the warrant-ceiling row is what pushes most NAF actions over to BSCO. The Davis-Bacon and SCLS rows are real but narrow: they only fire when those federal labor statutes actually apply to the action. Most NAF buys do not invoke either.
The aircraft lease program has its own approval channel: AFSVC's Aero Club Program Manager approves all aircraft lease agreements regardless of dollar value. Air Force Services Center Capital Lease Program vehicles and Air Force Lodging vehicles are purchased centrally by AFNAFPO; the local NAF CO does not buy these.
The NAF environment uses several contract instruments. The instrument family looks similar to FAR contract types but has its own naming and rules.
Term limits to remember: contracts subject to Service Contract Labor Standards are limited to 5 years. Contracts not subject to SCLS, and BPAs, are limited to 10 years.
NAF solicitations look like FAR solicitations from the outside but follow DAFMAN 64-119 procedures rather than FAR Subpart 5 / Part 14 / Part 15.
Above $10,000, two sources must be solicited and price reasonableness must be documented. The evaluation method is at the NAF CO's discretion within DAFMAN 64-119 guidance. Common patterns:
Source-selection procedures from FAR Part 15 do not apply. Adjectival ratings, formal competitive ranges, and the discussions / clarifications apparatus from FAR 15.306 are not the right framework. The NAF CO designs the evaluation to fit the action and documents what they did.
Every NAF contract incorporates the AFNAFPO Nonappropriated Fund Standard Clauses (35 paragraphs covering the body of the contract, from definitions through termination through prompt payment) and the relevant subset of NFC- clauses incorporated by reference.
The 35 standard paragraphs include, among others:
The NFC- clauses incorporated by reference mirror DFARS 252 numbering with an "NFC-" prefix swap. Common ones: NFC-204-25 (telecom reps), NFC-222-41 (SCLS), NFC-228-3 (Defense Base Act for overseas performance), NFC-243-1 (Changes Fixed-Price), NFC-225-7036 (Buy American / Free Trade Agreements / Balance of Payments). The full text lives in a separate AFNAFPO publication (provided as a download on the next tab).
Modifications follow the standard NAF Changes clause. The clause variant depends on the contract type:
Ratifications are the NAF analogue to FAR ratification of unauthorized commitments. Up to $50,000, the FSS Commander approves. Above $50,000, AFSVC Vice Commander or VP approves. The ratification package documents what happened, who committed, why ratification is appropriate, and what corrective action is being taken to prevent recurrence.
Acceptance happens within one business day of delivery (the surveillance checklist confirms this). The COR completes acceptance on the documents per DAFMAN 64-119 procedure. Late acceptance starts the Prompt Payment Act clock late and exposes the NAFI to interest if payment runs past 30 days from acceptance.
Invoice content requirements come from the standard NAF Invoices clause: invoice number, contract number, line items, unit prices, totals, performance period, remittance address, and the contractor's contact information. The proper invoice triggers the 30-day clock.
Prompt-payment interest, when due, is paid from NAF funds. The standard Travel clause permits contractor travel reimbursement up to Federal Travel Regulation limits with receipts above $75. Contractor books their own travel; no SATO requirement on a NAF action.
The annual NAF Surveillance Checklist is the central oversight mechanism for the program. It is a yes / no / N/A questionnaire across roughly 50 items covering:
Any "NO" or "N/A" answer requires a written explanation. The completed checklist plus the FSS Commander certification memo plus a list of NAF COs (name, warrant amount, warrant number, issue date) and a list of ratifications during the reporting period are submitted to AFNAFPO by 30 November each year. The example surveillance memo and the full checklist are available on the Templates tab.
Closeout for individual actions happens in the NAF electronic purchasing system. The NAF CO confirms final delivery and acceptance, processes final payment, and closes the action.
The last tab is the document set: AFNAFPO templates, the standard clauses, the surveillance checklist and memo example, and links to DAFMAN 64-119 and AFNAFPO.
The templates below are AFNAFPO-published documents preserved here as a convenience. Always cross-check with afnafpo.afsv.net for the current version before use.
External links above point to live AFNAFPO documents. AFNAFPO updates these on its own cadence; if a link is dead, navigate from afnafpo.afsv.net » Policy and Training.
Concepts gives you the legal frame. The walkthrough shows the lifecycle. Execution is the procedural reference. Templates are the working set. AFNAFPO and DAFMAN 64-119 are the authorities you cross-check anything substantive against.