[Federal Register Volume 60, Number 180 (Monday, September 18, 1995)]
[Rules and Regulations]
[Pages 48231-48258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22778]
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DEPARTMENT OF DEFENSE
48 CFR Parts 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 16, 22, 23,
31, 36, 42, 44, 46, 47, 49, 52, and 53
[FAC 90-32; FAR Case 94-790; Item III]
RIN 9000-AG38
Federal Acquisition Regulation; Acquisition of Commercial Items
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: This final rule is issued pursuant to the Federal Acquisition
Streamlining Act of 1994 to implement the revised statutory authorities
in Title VIII of the Act for the acquisition of commercial items and
components by Federal Government agencies as well as contractors and
subcontractors at all levels. This regulatory action was subject to
Office of Management and Budget review under Executive Order 12866,
dated September 30, 1993.
EFFECTIVE DATE: October 1, 1995.
Applicability date: For solicitations issued on or after October 1,
1995; use of the new policies, provisions and clauses is optional for
solicitations issued before December 1, 1995, and mandatory for
solicitations issued after December 1, 1995.
FOR FURTHER INFORMATION CONTACT: Colonel Laurence M. Trowel, Commercial
Item Team Leader, at (703) 695-3858 in reference to this FAR case. For
general information, contact the FAR Secretariat, Room 4037, GS
Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-32,
FAR case 94-790.
SUPPLEMENTARY INFORMATION:
A. Background
The Federal Acquisition Streamlining Act of 1994, Pub. L. 103-355,
provides authorities that streamline the acquisition process and
minimize burdensome Government-unique requirements. This notice
announces revisions developed under FAR case 94-790, Acquisition of
Commercial Items, which encourage the acquisition of commercial end
items and components by Federal Government agencies as well as
contractors and subcontractors at all levels. The most significant
revisions are in the following FAR parts:
Part 2 has been amended to incorporated the definitions of
``commercial item,'' ``component,'' ``commercial component'' and
``nondevelopmental item'' from the Act with only minor revisions for
clarification. The clause at 52.202-1, Definitions, has been similarly
revised to make the definitions available to prime and subcontractors.
Part 10 has been completely revised to address market research. It
contains some language taken from the current FAR Part 11. This new
part establishes the requirement for market research as the first step
in the acquisition process. Market research is an essential element in
the later steps of describing the agency's need, developing the overall
acquisition strategy and identifying terms and conditions unique to the
item being acquired.
Part 11 has been completely revised to address the process of
describing agency needs. It contains some of the language on
specifications and standards formerly found in FAR Part 10, but takes a
more streamlined approach. In addition, the revised Part 11 establishes
the Government's order of precedence for requirements documents and
addresses the concept of market acceptance contained in the Act. The
revised Part 11 also contains coverage on Delivery or Performance
Schedules, Liquidated Damages, Priorities and Allocations, and
Variations in Quantity taken from the current Part 12 with only minor
editorial revisions. The current Part 12 coverage on Suspension of
Work, Stop Work Orders, and Government Delay of Work has been moved to
Subpart 42.13 with only minor editorial revisions.
Part 12 has been completely revised to address the acquisition of
commercial items. The Team created this entirely new coverage to
address in one FAR part the policies for the acquisition of commercial
items.
--Subpart 12.1 states that the policies in the revised Part 12 are
applicable to all acquisitions of commercial items above the micro-
purchase threshold. The requirements of other parts of the FAR apply to
commercial items to the extent they are not inconsistent with Part 12;
--Subpart 12.2 identifies special requirements for the acquisition of
commercial items. These requirements generally reflect the requirements
of Title VIII.
--Subpart 12.3 establishes standard provisions and clauses for use in
the acquisition of commercial items. This approach is essential to meet
the requirements of the statute and provide contracting officers and
industry with an easy to use, simplified method for acquiring
commercial items. However, it is essential that contracting officers be
allowed to tailor solicitations and contracts to meet the needs of the
particular acquisition and the marketplace for that item. Subpart 12.3
gives contracting officers broad authority to tailor solicitations and
contracts, a practice itself that is consistent with commercial
practices. The Act requires that some limitations be placed on this
authority to tailor, and that has also been accommodated in this
subpart.
--A new form, the Standard Form 1449, Solicitation/Contract/Order for
Commercial Items, was established.
[[Page 48232]]
The SF 1449 combines features of the SF 33, Solicitation, Offer and
Award; the SF 1447, Solicitation/Contract; and the DD 1155, Order for
Supplies and Services. The most significant element is the addition of
acceptance blocks at the bottom of the form (patterned after the DD
Form 1155). This will allow suppliers of commercial items to utilize
the SF 1449 to document receipt of the supplies or services by the
government avoiding the need for preparation of separate receipt/
acceptance forms.
--Subpart 12.5 identifies the applicability of certain laws to the
acquisition of commercial items. This subpart is intended to meet the
requirements of Section 8003(a) of the Act which requires that the FAR
contain a list of laws determined to be inapplicable to prime contracts
for commercial items.
--Section 12.503 contains the list of laws determined to be not
applicable to executive agency prime contracts for acquisition of
commercial items. This list has been expanded to also include those
laws that have been revised in some manner to modify their
applicability to commercial items. In each instance, the specific
prescriptive language elsewhere in the FAR has been revised to reflect
this modified applicability. FAR 12.503 only includes those laws that
apply to prime contracts awarded by both DOD and civilian agencies.
Agency unique laws determined to be not applicable to prime contracts
are not addressed in this rule and may be addressed separately by the
respective agencies.
--Section 12.504 contains the list of laws determined to be not
applicable to subcontracts for commercial items. This list has been
expanded to also include those laws that have been revised in some
manner to modify their applicability to subcontracts for commercial
items.
--Subpart 12.6 identifies two streamlined procedures for the evaluation
and solicitation of contracts for commercial items. These procedures
may be used at the discretion of the contracting officer.
Part 52 has been amended to include several new provisions and
clauses to be inserted in all solicitations and contracts for the
acquisition of commercial items:
--Section 52.212-1, Instructions to Offerors--Commercial Items,
contains solicitation instructions unique to Government procurement and
is based upon existing FAR language. The information has been
simplified and tailored to meet the requirements of commercial items.
For the most part, the simplified paragraphs in the new provision do
not contain new concepts.
--Section 52.212-2, Evaluation--Commercial Items, contains evaluation
information that has been simplified and tailored to meet the
requirements of commercial items. Again, this provision does not
contain new concepts and is generally based upon provisions prescribed
in Parts 14 and 15. This provision may be used at the discretion of the
contracting officer. It requires the contracting officer to establish
specific evaluation factors and the relative order of importance for
each acquisition.
--Section 52.212-3, Offeror Representations and Certifications--
Commercial Items, includes the certifications and representations
required to comply with laws or Executive orders. Instead of using the
numerous certifications contained in the FAR, the Team drafted a single
provision containing all the requirements that may apply to the
acquisition of commercial items.
--Section 52.212-4, Contract Terms and Conditions--Commercial Items,
contains the terms and conditions the Team believes are consistent with
customary commercial practice by addressing general areas that previous
studies have identified as the ``core'' areas covered by commercial
contracts. Several concepts included in the clause at 52.212-4
represent significant changes from standard Government practices to
commercial-like practices.
--Section 52.212-5, Contract Terms and Conditions Required to Implement
Statutes or Executive orders--Commercial Items, implements provisions
of law or executive orders applicable to Government acquisitions of
commercial items or commercial components. The Team believes the clause
at 52.212-5 represents the minimum number of clauses required to
implement statutes and Executive orders. Certain clauses may apply
depending upon the circumstances; the contracting officer will indicate
which of these clauses apply for the specific acquisition. In addition,
this clause provides that the contractor is not required to include any
FAR provision or clause in its subcontracts other than those listed in
the clause as applying to subcontracts for commercial items.
--Section 52.244-6, Subcontracts for Commercial Items and Commercial
Components, implements the preference for the acquisition of commercial
items or nondevelopmental items as components of items to be supplied
under Federal contracts. This clause will be inserted in all
solicitations and contracts for supplies and services other than
commercial items. It provides that the contractor is not required to
include in its subcontracts for commercial items any FAR provision or
clause, other than those listed in the clause.
B. Regulatory Flexibility Act
This final rule will have a significant economic impact on a
substantial number of small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601, et seq. This rule will have
this impact as a result of the following:
(1) It establishes a much broader definition of ``commercial
items'' compared to the language of Part 11, it includes certain
modifications to existing items, and includes certain commercial
services. In all these cases, small business is very likely to benefit
from this expanded definition;
(2) It establishes a requirement for conducting market research in
certain circumstances before issuing solicitations which should benefit
small business by ensuring the contracting activity has conducted
sufficient research to be aware of the availability of commercial items
and the practices used in the commercial marketplace to acquire them.
The rule also cautions contracting officers not to request potential
sources to submit more than the minimum information necessary as a part
of market research.
(3) It establishes a preference for the acquisition of commercial
items thereby enabling more small businesses that offer commercial
items to participate in Government acquisition;
(4) It establishes a preference for stating Government requirements
in terms of functions to be performed, performance required, or
essential physical characteristics rather than detailed, Government-
unique design specifications thereby allowing a broader range of
products of small businesses to satisfy the Government need;
(5) It establishes the Government order of precedence for
requirements documents emphasizing performance-oriented documents and
nongovernment standards rather than Federal/Military-unique standards
thereby allowing a broader range of small businesses to participate in
Government acquisitions;
[[Page 48233]]
(6) It allows contracting officers the flexibility to use either
the streamlined solicitation procedure in the revised Subpart 12.6 for
acquiring commercial items, or the existing procedures in Parts 13, 14
or 15, as applicable, if they are more streamlined and beneficial,
thereby allowing maximum flexibility for contracting with small
businesses;
(7) It allows the use of the streamlined terms and conditions for
acquiring commercial items for every acquisition above the
micropurchase threshold thereby allowing the maximum number of small
businesses to benefit from these procedures;
(8) It requires, except in unique circumstances, that the
Government rely on the contractor's quality assurance system thereby
allowing small businesses to utilize their own quality system when
selling commercial items rather than a Government-specified system;
(9) It requires that, when acquiring commercial items, the
contracting officer use the solicitation provisions and contract
clauses specifically established for acquiring commercial items. The
contracting officer may tailor those provisions and clauses when the
customary practices in the market dictate the use of other terms and
conditions or when a waiver is approved; and
(10) By significantly limiting the flow down of Government-unique
terms and conditions to subcontractors at all levels thereby minimizing
the burden on a significant number of small businesses.
A Final Regulatory Flexibility Analysis (FRFA) has been prepared
and will be provided to the Chief Counsel for Advocacy for the Small
Business Administration. A copy of the FRFA may be obtained from the
FAR Secretariat.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 96-511) is deemed to apply
because the final rule contains information collection requirements.
Accordingly, a request for approval of a new information collection
requirement concerning Acquisition of Commercial Items was submitted to
the Office of Management and Budget and approved through OMB Control
No. 9000-0136. Public comments concerning this request were invited in
a Federal Register notice at 60 FR 11219, March 1, 1995.
D. Public Comments
Title VIII of the Act makes significant statutory revisions to
facilitate the acquisition of commercial items and components by
Federal Government agencies, as well as contractors and subcontractors
at all levels. This final rule incorporates revisions to two proposed
rules resulting from a public meeting held on April 3, 1995, and
written comments received in response to publication of the two
proposed rules in the Federal Register. The first proposed rule was
published in the Federal Register on March 1, 1995 (60 FR 11198), under
FAR case 94-790. That proposed rule made changes throughout the FAR to
incorporate provisions of Title VIII. The second proposed rule was
published in the Federal Register on March 22, 1995 (60 FR 15220),
under FAR case 94-791. That case contained the list of laws required by
Section 8003(a) of the Act that were determined to be inapplicable to
Executive agency contracts and subcontracts for commercial items. FAR
case 94-791 also contained the list of contract clauses determined to
be applicable to subcontracts for the acquisition of commercial items.
On April 4, 1995, a correction to the proposed rule under FAR case 94-
791 was published in the Federal Register (60 FR 17184), to correct
section 52.212-5 to include access to contractor records by the
Comptroller General of the United States for contracts awarded using
other than sealed bidding in excess of the simplified acquisition
threshold.
A total of 559 written comments were received on the proposed rule
from 60 commentors. Each comment was analyzed by the Commercial Items
Drafting Team and, where appropriate, changes were made in the proposed
FAR language as reflected in this final rule. The comments largely fell
in the following general areas:
1. Definitions of Commercial Items and Nondevelopmental Item
The language describing a ``minor'' modification was revised to
clarify the intent. The revised language was drawn from a related
Congressional report. The definition of nondevelopmental items was also
clarified to alleviate confusion regarding what commentors identified
as the ``circular logic'' of commercial items being a subset of
nondevelopmental items, and certain nondevelopmental items being a
subset of commercial items. The revision clarifies the distinction
between commercial items and nondevelopmental items. Several commentors
asked that specific examples of items that would be considered
``commercial'' be included in the definition. The Team rejected this
suggestion citing the impossibility of developing examples that would
adequately describe the range of commercial items the government might
buy while not unnecessarily limiting the breadth of the definition.
2. Decision to Utilize Commercial Items Authority
Several commentors expressed confusion over how the Government
would decide when the commercial items authorities in Part 12 could be
used. FAR 10.002 was revised to include language explaining the
decision process that would follow the completion of market research.
3. Market Acceptance
Several commentors were concerned with the lack of sufficient
guidance on market acceptance. Several changes were made in an effort
to balance the concerns expressed by the public and those expressed by
Government agencies. The final rule clarifies the circumstances where
market acceptance may be appropriate, cautions that it is not
appropriate when new or evolving commercial items may meet the agency's
needs, and contains guidance on developing criteria for demonstrating
market acceptance.
4. Relationship of Part 12 to Other FAR Parts
Several commentors expressed confusion over the relationship of
Part 12 to other Parts, especially Part 13, Simplified Acquisition
Procedures; Part 14, Sealed Bidding; and Part 15, Contracting By
Negotiation. FAR 12.203 was revised to clarify that Part 12 contains
unique policies for the acquisition of commercial items. These unique
policies are intended to be used in conjunction with the existing
procedures contained in Parts 13, 14, and 15 for the solicitation,
evaluation, and award of contracts, purchase orders and other
instruments. Part 12 will take precedence over other FAR parts only
where the policies in those parts are inconsistent.
5. Use of the Standard Form (SF) 1449
Several commentors questioned the rationale for requiring the use
of the new SF 1449 for all acquisitions of commercial items. The SF
1449 was specifically developed in conjunction with the provisions and
clauses developed for the acquisition of commercial items. The SF 1449
and the prescribed provisions and clauses are designed to complement
each other in several respects. Forms currently prescribed in the FAR
contain references to FAR provisions and clauses that are not used for
commercial items, and references to the Uniform
[[Page 48234]]
Contract Format, also not used for acquiring commercial items. Finally,
the use of a single form throughout the Federal Government for all
acquisitions of commercial items will aid those offerors that will, as
a result of the publication of this rule, seek to do business with the
Federal Government.
6. Quality Assurance
Several commentors questioned the intent of the language regarding
the reliance on contractors' existing quality assurance systems. The
rule has been revised to clarify that where buyer in-process inspection
is a customary practice, any Government inprocess inspection shall be
conducted in a manner consistent with commercial practice.
7. Commercial Item Pricing
Commentors suggested that Part 12 should discuss the techniques for
pricing commercial items. The policies and procedures for determining
the price reasonableness of commercial items are contained in Subpart
15.8 and the Team did not want to conflict with those policies.
However, a brief summary of pricing considerations used when
contracting by negotiation under Part 15 has been included in Part 12.
8. Technical Data and Computer Software
In response to numerous comments on technical data and computer
software, the final rule has been revised. The subpart on technical
data has been revised to cover the general principle that the
Government will acquire only technical data customarily provided to the
public, except as provided by agency-specific statutes. The technical
data subpart references FAR Part 27 and agency supplements, where
detailed rules implementing the technical data statutes can be found. A
new section on computer software was added to require that commercial
computer software be acquired under licenses customarily provided to
the public to the extent those licenses are consistent with Federal
procurement law.
9. Discretionary Use of FAR Provisions and Clauses
Several commentors asked if existing FAR provisions and clauses
could be used if needed. Guidance concerning the discretionary use of
other FAR clauses, consistent with market research and customary
commercial practice, has been provided in the final rule. Specific
examples of FAR clauses that may be appropriate for use include clauses
for ordering procedures for indefinite delivery contracts and option
exercise.
10. Tailoring of Provisions and Clauses
Additional guidance concerning contracting officer authority to
tailor Part 12 clauses, consistent with customary commercial market
practices, has also been provided. Specific paragraphs of the clause at
52.212-4, Contract Terms and Conditions--Commercial Items, that are
based in statute and may not be tailored, have been identified.
11. Unique Requirements Regarding Terms and Conditions for Commercial
Items.
Many commentors from both industry and Government noted that the
new terms and conditions prescribed for commercial items are
significantly different than the existing FAR provisions and clauses.
In response to the numerous questions and concerns, the Team expanded
the discussion in the proposed rule describing the key features of
these unique provisions and clauses.
12. Laws Inapplicable to Contractors and Subcontractors
The language describing the laws determined inapplicable to prime
and subcontractors has been revised to clarify several areas of
confusion. In addition, the Service Contract Act (SCA) was added to the
list of laws inapplicable to subcontractors. The proposed rule clearly
did not call out the SCA for flow down to subcontractors in paragraph
(e) of the clause at 52.212-5, but inadvertently omitted the law from
the list of laws inapplicable to subcontractors. Finally, as indicated
in the March 22, 1995, Federal Register notice, the DOD-unique laws
identified in the proposed rule have been removed from the FAR rule and
will appear in the DOD FAR Supplement (DFARS) coverage.
13. Certification Regarding Debarment and Suspension
A certification regarding an offeror's debarment, suspension or
ineligibility for award was added to the provision at 52.212-3 to
implement the requirements of Executive Order 12549.
14. Acceptance and Warranties
The language concerning acceptance and warranties in the clause at
52.212-4 was revised to incorporate the acceptance principles found in
the Uniform Commercial Code. It was also revised to establish the
implied warranties of merchantability and fitness for a particular
purpose as the Government's minimum warranties. Corresponding guidance
is provided in Part 12 on evaluating and incorporating express
warranties, which may overcome the implied warranties, and ensuring any
express warranty and the acceptance terms of the contract are
consistent with the concepts contained in the rule.
15. Terminations
Guidance on procedures for contract terminations, reflecting the
language in the clause at 52.212-4, has been provided in FAR Part 12.
In addition, language has been included to clarify that negotiation of
termination charges in terminations for the Government's convenience
does not require government unique record keeping, compliance with the
cost accounting standards or the contract cost principles.
16. Limitation of Liability
The limitation of contractor liability language, which appeared in
the proposed rule in the ``Warranty'' paragraph of the clause at
52.212-4, has been moved to a separate paragraph to clarify that the
limitation does not apply solely to liability relating to any warranty.
17. Subcontracting Plans
The requirement for Small, Small Disadvantaged and Women Owned
Small Business Subcontracting Plans was included in the clause at
52.212-5 after it was determined that there was no exemption from this
requirement for commercial items. However, in this regard, the Office
of Procurement Policy (OFPP) is preparing to issue Policy Letter 95-1,
Subcontracting Plans for Companies Supplying Commercial Items. This
Policy Letter states that when a subcontracting plan is required,
annual commercial subcontracting plans that relate to the company's
commercial and noncommercial production are authorized and preferred
for (1) prime contracts for commercial items; or (2) subcontractors
that provide commercial items under a prime contract, whether or not
the prime contractor is supplying a commercial item. The policy
revisions contained in Policy Letter 95-1 will be incorporated into the
FAR by a separate FAR case.
18. Other Revisions to the Proposed Rule
Numerous other revisions were made to the proposed rule to correct
inconsistencies, clarify intent, improve editorial clarity and to bring
the language of the case up to the latest FAR baseline through FAC 90-
31.
[[Page 48235]]
List of Subjects in 48 CFR Parts 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 14,
15, 16, 22, 23, 31, 36, 42, 44, 46, 47, 49, 52 and 53
Government procurement.
Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
Therefore, 48 CFR Parts 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15,
16, 22, 23, 31, 36, 42, 44, 46, 47, 49, 52, and 53 are amended as set
forth below:
1. The authority citation for 48 CFR Parts 2, 3, 5, 6, 7, 8, 9, 10,
11, 12, 14, 15, 16, 22, 23, 31, 36, 42, 44, 46, 47, 49, 52, and 53
continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
2. Section 2.101 is amended by adding in alphabetical order the
definitions ``Commercial component'', ``Commercial item'',
``Component'', ``Market research'', and ``Nondevelopmental item'' to
read as follows:
2.101 Definitions.
* * * * *
Commercial component means any component that is a commercial item.
Commercial item means--
(a) Any item, other than real property, that is of a type
customarily used for nongovernmental purposes and that--
(1) Has been sold, leased, or licensed to the general public; or,
(2) Has been offered for sale, lease, or license to the general
public;
(b) Any item that evolved from an item described in paragraph (a)
of this definition through advances in technology or performance and
that is not yet available in the commercial marketplace, but will be
available in the commercial marketplace in time to satisfy the delivery
requirements under a Government solicitation;
(c) Any item that would satisfy a criterion expressed in paragraphs
(a) or (b) of this definition, but for--
(1) Modifications of a type customarily available in the commercial
marketplace; or
(2) Minor modifications of a type not customarily available in the
commercial marketplace made to meet Federal Government requirements.
``Minor'' modifications means modifications that do not significantly
alter the nongovernmental function or essential physical
characteristics of an item or component, or change the purpose of a
process. Factors to be considered in determining whether a modification
is minor include the value and size of the modification and the
comparative value and size of the final product. Dollar values and
percentages may be used as guideposts, but are not conclusive evidence
that a modification is minor;
(d) Any combination of items meeting the requirements of paragraphs
(a), (b), (c), or (e) of this definition that are of a type customarily
combined and sold in combination to the general public;
(e) Installation services, maintenance services, repair services,
training services, and other services if such services are procured for
support of an item referred to in paragraphs (a), (b), (c), or (d) of
this definition, and if the source of such services--
(1) Offers such services to the general public and the Federal
Government contemporaneously and under similar terms and conditions;
and
(2) Offers to use the same work force for providing the Federal
Government with such services as the source uses for providing such
services to the general public;
(f) Services of a type offered and sold competitively in
substantial quantities in the commercial marketplace based on
established catalog or market prices for specific tasks performed under
standard commercial terms and conditions. This does not include
services that are sold based on hourly rates without an established
catalog or market price for a specific service performed;
(g) Any item, combination of items, or service referred to in
paragraphs (a) through (f), notwithstanding the fact that the item,
combination of items, or service is transferred between or among
separate divisions, subsidiaries, or affiliates of a contractor; or
(h) A nondevelopmental item, if the procuring agency determines the
item was developed exclusively at private expense and sold in
substantial quantities, on a competitive basis, to multiple State and
local governments.
Component means any item supplied to the Federal Government as part
of an end item or of another component.
* * * * *
Market research means collecting and analyzing information about
capabilities within the market to satisfy agency needs.
* * * * *
Nondevelopmental item means--
(a) Any previously developed item of supply used exclusively for
governmental purposes by a Federal agency, a State or local government,
or a foreign government with which the United States has a mutual
defense cooperation agreement;
(b) Any item described in paragraph (a) of this definition that
requires only minor modification or modifications of a type customarily
available in the commercial marketplace in order to meet the
requirements of the procuring department or agency; or
(c) Any item of supply being produced that does not meet the
requirements of paragraph (a) or (b) solely because the item is not yet
in use.
* * * * *
PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
3. Section 3.404 is amended by removing ``or'' from the end of
paragraph (b)(4); by redesignating paragraph (b)(5) as (b)(6) and
adding a new paragraph (b)(5); and by revising paragraph (c) to read as
follows:
3.404 Solicitation provision and contract clause.
* * * * *
(b) * * *
(5) The solicitation is for a commercial item (see parts 2 and 12);
or
* * * * *
(c) The contracting officer shall insert the clause at 52.203-5,
Covenant Against Contingent Fees, in solicitations and contracts
exceeding the simplified acquisition threshold in part 13 other than
those for commercial items (see Parts 2 and 12).
4. Section 3.502-2 is amended by revising the introductory text of
paragraph (i) to read as follows:
3.502-2 General.
* * * * *
(i) Requires each contracting agency to include in each prime
contract, except contracts for commercial items (see part 12), a
requirement that the prime contractor shall--
* * * * *
5. Section 3.502-3 is revised to read as follows:
3.502-3 Contract clause.
The contracting officer shall insert the clause at 52.203-7, Anti-
Kickback Procedures, in solicitations and contracts exceeding the
simplified acquisition threshold in part 13, other than those for
commercial items (see part 12).
6. Section 3.503-2 is revised to read as follows:
3.503-2 Contract clause.
The contracting officer shall insert the clause at 52.203-6,
Restrictions on Subcontractor Sales to the Government, in solicitations
and contracts exceeding the simplified acquisition threshold in
[[Page 48236]]
part 13. For the acquisition of commercial items, the contracting
officer shall use the clause with its Alternate I.
PART 5--PUBLICIZING CONTRACT ACTIONS
7. Section 5.203 is amended by revising paragraphs (a), (b), and
(c) to read as follows:
5.203 Publicizing and response time.
* * * * *
(a) A notice of contract action shall be published in the CBD at
least 15 days before issuance of a solicitation except when the
combined CBD synopsis/solicitation procedure for acquisition of
commercial items is used (see 12.603).
(b) The contracting officer shall establish a solicitation response
time which will afford potential offerors a reasonable opportunity to
respond for (1) each contract action, including actions via FACNET, in
an amount estimated to be greater than $25,000, but not greater than
the simplified acquisition threshold; or (2) each contract action for
the acquisition of commercial items in an amount estimated to be
greater than $25,000 (see part 12). The contracting officer should
consider the circumstances of the individual acquisition, such as the
complexity, commerciality, availability, and urgency, when establishing
the solicitation response time.
(c) Except for the acquisition of commercial items (see 5.203(b)),
agencies shall allow at least a 30-day response time for receipt of
bids or proposals from the date of issuance of a solicitation, if the
contract action is expected to exceed the simplified acquisition
threshold.
* * * * *
8. Section 5.207 is amended by adding paragraph (e)(4) to read as
follows:
5.207 Preparation and transmittal of synopses.
* * * * *
(e) * * *
(4) If, under the proposed acquisition, the Government does not
intend to acquire a commercial item using part 12, the synopsis shall
refer to Numbered Note 26.
* * * * *
PART 6--COMPETITION REQUIREMENTS
9. Section 6.303-2 is amended by revising paragraph (a)(8) to read
as follows:
6.303-2 Content.
(a) * * *
(8) A description of the market research conducted (see part 10)
and the results or a statement of the reason market research was not
conducted.
* * * * *
10. Section 6.502 is revised to read as follows:
6.502 Duties and responsibilities.
(a) Agency and procuring activity competition advocates are
responsible for promoting the acquisition of commercial items,
promoting full and open competition, challenging requirements that are
not stated in terms of functions to be performed, performance required
or essential physical characteristics, and challenging barriers to the
acquisition of commercial items and full and open competition such as
unnecessarily restrictive statements of work, unnecessarily detailed
specifications, and unnecessarily burdensome contract clauses.
(b) Agency competition advocates shall--
(1) Review the contracting operations of the agency and identify
and report to the agency senior procurement executive--
(i) Opportunities and actions taken to acquire commercial items to
meet the needs of the agency;
(ii) Opportunities and actions taken to achieve full and open
competition in the contracting operations of the agency;
(iii) Actions taken to challenge requirements that are not stated
in terms of functions to be performed, performance required or
essential physical characteristics;
(iv) Any condition or action that has the effect of unnecessarily
restricting the acquisition of commercial items or competition in the
contracting actions of the agency;
(2) Prepare and submit an annual report to the agency senior
procurement executive, in accordance with agency procedures,
describing--
(i) Such advocate's activities under this subpart;
(ii) New initiatives required to increase the acquisition of
commercial items;
(iii) New initiatives required to increase competition;
(iv) New initiatives to ensure requirements are stated in terms of
functions to be performed, performance required or essential physical
characteristics;
(v) Any barriers to the acquisition of commercial items or
competition that remain; and
(vi) Other ways in which the agency has emphasized the acquisition
of commercial items and competition in areas such as acquisition
training and research;
(3) Recommend to the senior procurement executive of the agency
goals and plans for increasing competition on a fiscal year basis; and
(4) Recommend to the senior procurement executive of the agency a
system of personal and organizational accountability for competition,
which may include the use of recognition and awards to motivate program
managers, contracting officers, and others in authority to promote
competition in acquisition.
PART 7--ACQUISITION PLANNING
7.101 [Amended]
11. Section 7.101 is amended by removing the definition ``Market
survey''.
12. Section 7.102 is revised to read as follows:
7.102 Policy.
(a) Agencies shall perform acquisition planning and conduct market
research (see part 10) for all acquisitions in order to promote and
provide for--
(1) Acquisition of commercial items or, to the extent that
commercial items suitable to meet the agency's needs are not available,
nondevelopmental items, to the maximum extent practicable (10 U.S.C.
2377 and 41 U.S.C. 251, et seq.); and
(2) Full and open competition (see part 6) or, when full and open
competition is not required in accordance with part 6, to obtain
competition to the maximum extent practicable, with due regard to the
nature of the supplies or services to be acquired (10 U.S.C. 2301(a)(5)
and 41 U.S.C. 253a(a)(1)).
(b) This planning shall integrate the efforts of all personnel
responsible for significant aspects of the acquisition. The purpose of
this planning is to ensure that the Government meets its needs in the
most effective, economical, and timely manner. Agencies that have a
detailed acquisition planning system in place that generally meets the
requirements of 7.104 and 7.105 need not revise their system to
specifically meet all of these requirements.
13. Section 7.103 is amended by revising paragraph (b); and in
paragraph (m) by removing ``10.002(c)'' and inserting ``11.001(b)'' to
read as follows:
7.103 Agency-head responsibilities.
* * * * *
(b) Encouraging offerors to supply commercial items, or to the
extent that commercial items suitable to meet the agency needs are not
available,
[[Page 48237]]
nondevelopmental items in response to agency solicitations (10 U.S.C.
2377 and 41 U.S.C. 251, et seq.); and
* * * * *
14. Section 7.105 is amended in paragraph (a)(5) by removing
``subpart 12.1'' and inserting ``subpart 11.4'' in its place; in
paragraph (a)(8)(iii) by removing the parenthetical ``(see
10.002(c))''; by revising paragraph (b)(1); in paragraph (b)(6) by
removing ``part 10'' and inserting ``part 11'' in its place; in
paragraph (b)(7) by removing ``subpart 12.3'' and inserting ``subpart
11.6'' in its place; and by revising paragraph (b)(12)(i) to read as
follows:
7.105 Contents of written acquisition plans.
* * * * *
(b) Plan of action--(1) Sources. Indicate the prospective sources
of supplies and/or services that can meet the need. Consider required
sources of supplies or services (see part 8). Include consideration of
small business, small disadvantaged business, and women-owned small
business concerns (see part 19). Address the extent and results of the
market research and indicate their impact on the various elements of
the plan (see part 10).
* * * * *
(12) * * *
(i) The assumptions determining contractor or agency support, both
initially and over the life of the acquisition, including consideration
of contractor or agency maintenance and servicing (see subpart 7.3) and
distribution of commercial items;
* * * * *
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
8.1104 [Amended]
15. Section 8.1104 is amended in paragraph (e)(1) by removing
``52.212-9'' and inserting ``52.211-16'' in its place.
PART 9--CONTRACTOR QUALIFICATIONS
16. Section 9.106-1 is amended by revising paragraph (a) to read as
follows:
9.106-1 Conditions for preaward surveys.
(a) A preaward survey is normally required when the information on
hand or readily available to the contracting officer is not sufficient
to make a determination regarding responsibility. However, if the
contemplated contract will have a fixed price at or below the
simplified acquisition threshold or will involve the acquisition of
commercial items (see part 12), the contracting officer should not
request a preaward survey unless circumstances justify its cost.
* * * * *
17. Section 9.306 is amended in the introductory text of paragraph
(f) by revising the parenthetical to read ``(see 11.404)''.
18. Section 9.405-2 is amended by revising the second sentence of
paragraph (b) introductory text to read as follows:
9.405-2 Restrictions on subcontracting.
* * * * *
(b) * * * By operation of the clause at 52.209-6, Protecting the
Government's Interests When Subcontracting with Contractors Debarred,
Suspended or Proposed for Debarment, contractors shall not enter into
any subcontract in excess of $25,000 with a contractor that has been
debarred, suspended, or proposed for debarment unless there is a
compelling reason to do so. * * *
* * * * *
19. Part 10 is revised to read as follows:
PART 10--MARKET RESEARCH
Sec.
10.000 Scope of part.
10.001 Policy.
10.002 Procedures.
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
10.000 Scope of part.
This part prescribes policies and procedures for conducting market
research to arrive at the most suitable approach to acquiring,
distributing, and supporting supplies and services. This part
implements requirements of 41 U.S.C. 253a(a)(1), 41 U.S.C 264b, and 10
U.S.C. 2377.
10.001 Policy.
(a) Agencies shall--
(1) Ensure that legitimate needs are identified and trade-offs
evaluated to acquire items which meet those needs;
(2) Conduct market research appropriate to the circumstances--
(i) Before developing new requirements documents for an acquisition
by that agency;
(ii) Before soliciting offers for acquisitions with an estimated
value in excess of the simplified acquisition threshold; and
(iii) Before soliciting offers for acquisitions with an estimated
value less than the simplified acquisition threshold when adequate
information is not available and the circumstances justify its cost;
and
(3) Use the results of market research to--
(i) Determine if sources capable of satisfying the agency's
requirements exist;
(ii) Determine if commercial items or, to the extent commercial
items suitable to meet the agency's needs are not available,
nondevelopmental items are available that--
(A) Meet the agency's requirements;
(B) Could be modified to meet the agency's requirements; or
(C) Could meet the agency's requirements if those requirements were
modified to a reasonable extent;
(iii) Determine the extent to which commercial items or
nondevelopmental items could be incorporated at the component level;
(iv) Determine the practices of firms engaged in producing,
distributing, and supporting commercial items, such as terms for
warranties, buyer financing, maintenance and packaging, and marking;
and
(v) Ensure maximum practicable use of recovered materials (see
subpart 23.4) and promote energy conservation and efficiency.
(b) When conducting market research, agencies should not request
potential sources to submit more than the minimum information
necessary.
10.002 Procedures.
(a) Acquisitions begin with a description of the Government's needs
stated in terms sufficient to allow conduct of market research.
(b) Market research is then conducted to determine if commercial
items or nondevelopmental items are available to meet the Government's
needs or could be modified to meet the Government's needs.
(1) The extent of market research will vary, depending on such
factors as urgency, estimated dollar value, complexity, and past
experience. Market research involves obtaining information specific to
the item being acquired and should include--
(i) Whether the Government's needs can be met by--
(A) Items of a type customarily available in the commercial
marketplace;
(B) Items of a type customarily available in the commercial
marketplace with modifications; or
(C) Items used exclusively for governmental purposes;
(ii) Customary practices regarding customizing, modifying or
tailoring of items to meet customer needs and associated costs;
(iii) Customary practices, including warranty, buyer financing,
discounts, etc., under which commercial sales of the products are made;
[[Page 48238]]
(iv) The requirements of any laws and regulations unique to the
item being acquired;
(v) The availability of items that contain recovered materials and
items that are energy efficient;
(vi) The distribution and support capabilities of potential
suppliers, including alternative arrangements and cost estimates; and
(vii) Size and status of potential sources (see part 19).
(2) Techniques for conducting market research may include any or
all of the following:
(i) Contacting knowledgeable individuals in Government and industry
regarding market capabilities to meet requirements.
(ii) Reviewing the results of recent market research undertaken to
meet similar or identical requirements.
(iii) Publishing formal requests for information in appropriate
technical or scientific journals or business publications.
(iv) Querying Government data bases that provide information
relevant to agency acquisitions.
(v) Participating in interactive, on-line communication among
industry, acquisition personnel, and customers.
(vi) Obtaining source lists of similar items from other contracting
activities or agencies, trade associations or other sources.
(vii) Reviewing catalogs and other generally available product
literature published by manufacturers, distributors, and dealers or
available on-line.
(viii) Conducting interchange meetings or holding presolicitation
conferences to involve potential offerors early in the acquisition
process.
(c) If market research indicates commercial or nondevelopmental
items might not be available to satisfy agency needs, agencies shall
reevaluate the need in accordance with 10.001(a)(3)(ii) and determine
whether the need can be restated to permit commercial or
nondevelopmental items to satisfy the agency's needs.
(d)(1) If market research establishes that the Government's need
may be met by a type of item or service customarily available in the
commercial marketplace that would meet the definition of a commercial
item at subpart 2.1, the contracting officer shall solicit and award
any resultant contract using the policies and procedures in part 12.
(2) If market research establishes that the Government's need
cannot be met by a type of item or service customarily available in the
marketplace, part 12 shall not be used. When publication of the notice
at 5.201 is required, the contracting officer shall include a notice to
prospective offerors that the Government does not intend to use part 12
for the acquisition (see 5.207(e)(4)).
(e) Agencies should document the results of market research in a
manner appropriate to the size and complexity of the acquisition.
20. Part 11 is revised to read as follows:
PART 11--DESCRIBING AGENCY NEEDS
Sec.
11.000 Scope of part.
11.001 Definitions.
11.002 Policy.
Subpart 11.1--Selecting and Developing Requirements Documents
11.101 Order of precedence for requirements documents.
11.102 Standardization program.
11.103 Market acceptance.
11.104 Items peculiar to one manufacturer.
Subpart 11.2--Using and Maintaining Requirements Documents
11.201 Identification and availability of specifications.
11.202 Maintenance of standardization documents.
11.203 Customer satisfaction.
11.204 Solicitation provisions and contract clauses.
Subpart 11.3--Acquiring Other Than New Material, Former Government
Surplus Property and Residual Inventory
11.301 Policy.
11.302 Solicitation provisions and contract clauses.
Subpart 11.4--Delivery or Performance Schedules
11.401 General.
11.402 Factors to consider in establishing schedules.
11.403 Supplies or services.
11.404 Contract clauses.
Subpart 11.5--Liquidated Damages
11.501 General.
11.502 Policy.
11.503 Procedures.
11.504 Contract clauses.
Subpart 11.6--Priorities and Allocations
11.600 Scope of part.
11.601 Definitions.
11.602 General.
11.603 Procedures.
11.604 Solicitation provisions and contract clauses.
Subpart 11.7--Variation in Quantity
11.701 Supply contracts.
11.702 Construction contracts.
11.703 Contract clauses.
11.000 Scope of part.
This part prescribes policies and procedures for describing agency
needs.
11.001 Definitions.
Material, as used in this part, includes, but is not limited to,
raw material, parts, items, components, and end products.
New, as used in this part, means previously unused or composed of
previously unused materials and may include unused residual inventory
or unused former Government surplus property.
Other than new, as used in this part, includes, but is not limited
to, recycled, recovered, remanufactured, used, and reconditioned.
Reconditioned, as used in this part, means restored to an earlier
normal operating condition by readjustments and replacement of parts.
Remanufactured, as used in this part, means factory rebuilt to new
equipment performance specification and unused subsequent to
rebuilding.
11.002 Policy.
(a) In fulfilling requirements of 10 U.S.C. 2305(a)(1), 10 U.S.C.
2377, 41 U.S.C. 253a(a), and 41 U.S.C. 264b, agencies shall--
(1) Specify needs using market research in a manner designed to--
(i) Promote full and open competition (see part 6), with due regard
to the nature of the supplies or services to be acquired; and
(ii) Only include restrictive provisions or conditions to the
extent necessary to satisfy the minimum needs of the agency or as
authorized by law.
(2) To the maximum extent practicable, ensure that acquisition
officials--
(i) State requirements with respect to an acquisition of supplies
or services in terms of--
(A) Functions to be performed;
(B) Performance required; or
(C) Essential physical characteristics;
(ii) Define requirements in terms that enable and encourage
offerors to supply commercial items, or, to the extent that commercial
items suitable to meet the agency's needs are not available,
nondevelopmental items, in response to the agency solicitations;
(iii) Provide offerors of commercial items and nondevelopmental
items an opportunity to compete in any acquisition to fill such
requirements;
(iv) Require prime contractors and subcontractors at all tiers
under the agency contracts to incorporate commercial items or
nondevelopmental items as components of items supplied to the agency;
and
(v) Modify requirements in appropriate cases to ensure that the
requirements can be met by commercial items or, to the extent that
commercial
[[Page 48239]]
items suitable to meet the agency's needs are not available,
nondevelopmental items.
(b) The Metric Conversion Act of 1975, as amended by the Omnibus
Trade and Competitiveness Act of 1988 (15 U.S.C. 205a, et seq.),
designates the metric system of measurement as the preferred system of
weights and measures for United States trade and commerce, and it
requires that each agency use the metric system of measurement in its
acquisitions, except to the extent that such use is impracticable or is
likely to cause significant inefficiencies or loss of markets to United
States firms. Requiring activities are responsible for establishing
guidance implementing this policy in formulating their requirements for
acquisitions.
(c) To the extent practicable and consistent with subpart 9.5,
potential offerors should be given an opportunity to comment on agency
requirements or to recommend application and tailoring of requirements
documents and alternative approaches. Requiring agencies should apply
specifications, standards, and related documents initially for guidance
only, making final decisions on the application and tailoring of these
documents as a product of the design and development process. Requiring
agencies should not dictate detailed design solutions prematurely (see
7.101 and 7.105(a)(8)).
(d) The Resource Conservation and Recovery Act of 1976 (42 U.S.C.
6901, et seq.), as amended, and Executive Order 12873, dated October
20, 1993, establish requirements for the procurement of products
containing recovered materials, and environmentally preferable and
energy-efficient products and services. Requiring activities shall
prepare plans, drawings, specifications, standards (including voluntary
standards), and purchase descriptions that consider the requirements
set forth in part 23.
Subpart 11.1--Selecting and Developing Requirements Documents
11.101 Order of precedence for requirements documents.
(a) Agencies may select from existing requirements documents,
modify or combine existing requirements documents, or create new
requirements documents to meet agency needs, consistent with the
following order of precedence:
(1) Documents mandated for use by law.
(2) Performance-oriented documents.
(3) Detailed design-oriented documents.
(4) Standards, specifications and related publications issued by
the Government outside the Defense or Federal series for the non-
repetitive acquisition of items.
(b) Agencies should prepare product descriptions to achieve maximum
practicable use of recovered material and other materials that are
environmentally preferable (see subparts 23.4 and 23.7).
11.102 Standardization program.
Agencies shall select existing requirements documents or develop
new requirements documents that meet the needs of the agency in
accordance with the guidance contained in the Federal Standardization
Manual and, for DOD components, DOD 4120.3-M, Defense Standardization
Program Policies and Procedures. The Federal Standardization Manual may
be obtained from General Services Administration, Federal Supply
Service Bureau, Specifications Section, Suite 8100, 470 L'Enfant Plaza,
SW, Washington, DC 20407. DOD 4120.3-M may be obtained from DOD Single
Stock Point, Standardization Document Order Desk, Building 4D, 700
Robbins Avenue, Philadelphia, PA 19111-5094.
11.103 Market acceptance.
(a) Section 8002(c) of Pub. L. 103-355 provides that, in accordance
with agency procedures, the head of an agency may, under appropriate
circumstances, require offerors to demonstrate that the items offered--
(1) Have either--
(i) Achieved commercial market acceptance; or
(ii) Been satisfactorily supplied to an agency under current or
recent contracts for the same or similar requirements; and
(2) Otherwise meet the item description, specifications, or other
criteria prescribed in the public notice and solicitation.
(b) Appropriate circumstances may, for example, include situations
where the agency's minimum need is for an item that has a demonstrated
reliability, performance or product support record in a specified
environment. Use of market acceptance is inappropriate when new or
evolving items may meet the agency's needs.
(c) In developing criteria for demonstrating that an item has
achieved commercial market acceptance, the contracting officer shall
ensure the criteria in the solicitation--
(1) Reflect the minimum need of the agency and are reasonably
related to the demonstration of an item's acceptability to meet the
agency's minimum need;
(2) Relate to an item's performance and intended use, not an
offeror's capability;
(3) Are supported by market research;
(4) Include consideration of items supplied satisfactorily under
recent or current Government contracts, for the same or similar items;
and
(5) Consider the entire relevant commercial market, including small
business concerns.
(d) Commercial market acceptance shall not be used as a sole
criterion to evaluate whether an item meets the Government's
requirements.
(e) When commercial market acceptance is used, the contracting
officer shall document the file to--
(1) Describe the circumstances justifying the use of commercial
market acceptance criteria; and
(2) Support the specific criteria being used.
11.104 Items peculiar to one manufacturer.
Agency requirements shall not be written so as to require a
particular brand-name, product, or a feature of a product, peculiar to
one manufacturer, thereby precluding consideration of a product
manufactured by another company, unless--
(a) The particular brand-name, product, or feature is essential to
the Government's requirements, and market research indicates other
companies' similar products, or products lacking the particular
feature, do not meet, or can not be modified to meet, the agency's
minimum needs; and
(b) The authority to contract without providing for full and open
competition is supported by the required justifications and approvals
(see 6.302-1).
Subpart 11.2--Using and Maintaining Requirements Documents
11.201 Identification and availability of specifications.
(a) Solicitations citing requirements documents listed in the
General Services Administration (GSA) Index of Federal Specifications,
Standards and Commercial Item Descriptions, the DoD Index of
Specifications and Standards (DoDISS), or other agency index shall
identify each document's approval date and the dates of any applicable
amendments and revisions. Do not use general identification references,
such as ``the issue in effect on the date of the solicitation.''
Contracting offices will not normally furnish these cited documents
with the solicitation, except when--
(1) The requirements document must be furnished with the
solicitation to
[[Page 48240]]
enable prospective contractors to make a competent evaluation of the
solicitation;
(2) In the judgment of the contracting officer, it would be
impracticable for prospective contractors to obtain the documents in
reasonable time to respond to the solicitation; or
(3) A prospective contractor requests a copy of a Government
promulgated requirements document.
(b) Contracting offices shall clearly identify in the solicitation
any pertinent documents not listed in the GSA Index of Federal
Specifications, Standards and Commercial Item Descriptions or DoDISS.
Such documents shall be furnished with the solicitation or specific
instructions shall be furnished for obtaining or examining such
documents.
(c) When documents refer to other documents, such references shall
(1) Be restricted to documents, or appropriate portions of
documents, that apply in the acquisition;
(2) Cite the extent of their applicability;
(3) Not conflict with other documents and provisions of the
solicitation; and
(4) Identify all applicable first tier references.
(d) The GSA Index of Federal Specifications, Standards and
Commercial Item Descriptions may be purchased from the General Services
Administration, Federal Supply Service Bureau, Specification Section,
Suite 8100, 470 L'Enfant Plaza, SW, Washington, DC 20407, telephone
(202) 755-0325/0326. The DoDISS may be purchased from the
Standardization Documents Desk, Building 4D, 700 Robbins Avenue,
Philadelphia, PA 19111-5094, telephone (215) 697-2569.
(e) Agencies may generally obtain from the GSA Specification
Section or the DOD Standardization Documents Desk those nongovernment
(voluntary) standards adopted for use by Federal or Defense activities.
Standards not available from these sources may be obtained from
Government libraries, activities subscribing to document handling
services or the organization responsible for the preparation,
publication or maintenance of the standard.
11.202 Maintenance of standardization documents.
(a) Recommendations for changes to standardization documents listed
in the GSA Index of Federal Specifications, Standards and Commercial
Item Descriptions should be submitted to the General Services
Administration, Federal Supply Service, Office of Acquisition,
Washington, DC 20406. Agencies shall submit recommendations for changes
to standardization documents listed in the DoDISS to the cognizant
preparing activity.
(b) When an agency cites an existing standardization document but
modifies it to meet its needs, the agency shall follow the guidance in
Federal Standardization Manual and, for Defense components, DoD 4120.3-
M, Defense Standardization Program Policies and Procedures.
11.203 Customer satisfaction.
Acquisition organizations shall communicate with customers to
determine how well the requirements document reflects the customer's
needs and to obtain suggestions for corrective actions. Whenever
practicable, the agency may provide affected industry an opportunity to
comment on the requirements documents.
11.204 Solicitation provisions and contract clauses.
(a) The contracting officer shall insert the provision at 52.211-1,
Availability of Specifications Listed in the GSA Index of Federal
Specifications, Standards and Commercial Item Descriptions, in
solicitations that
(1) Are issued by civilian agency contracting offices and
(2) Cite specifications listed in the Index that are not furnished
with the solicitation.
(b) The contracting officer shall insert the provision at 52.211-2,
Availability of Specifications Listed in the DoD Index of
Specifications and Standards (DoDISS), in solicitations that
(1) Are issued by DoD contracting offices and
(2) Cite specifications listed in the DoDISS that are not furnished
with the solicitation.
(c) The contracting officer shall insert a provision substantially
the same as the provision at 52.211-3, Availability of Specifications
Not Listed in the GSA Index of Federal Specifications, Standards and
Commercial Item Descriptions, in solicitations that cite specifications
that are not listed in the Index and are not furnished with the
solicitation, but may be obtained from a designated source.
(d) The contracting officer shall insert a provision substantially
the same as the provision at 52.211-4, Availability for Examination of
Specifications Not Listed in the GSA Index of Federal Specifications,
Standards and Commercial Item Descriptions, in solicitations that cite
specifications that are not listed in the Index and are available for
examination at a specified location.
Subpart 11.3--Acquiring Other Than New Material, Former Government
Surplus Property, and Residual Inventory
11.301 Policy.
(a) Agencies shall allow offers of other than new material, former
Government surplus property, or residual inventory unless it is
determined that such materials are unacceptable. When acquiring
commercial items, the contracting officer should consider the customary
practice in the industry for the item being acquired. When only new
material is acceptable, the solicitation shall clearly identify the
material that must be new. Offerors providing other than new material
shall be required to comply with the clause at 52.211-5, New Material,
the provision at 52.211-6, Listing of Other Than New Material, Residual
Inventory, and Former Government Surplus Property, and the clause at
52.211-7, Other Than New Material, Residual Inventory, and Former
Government Surplus Property, as appropriate.
(b) Agencies shall specify products, including packaging, that
contain the highest practicable percentage of recovered and
environmentally preferable materials, and where applicable, post-
consumer material, consistent with performance requirements,
availability, price reasonableness, and cost-effectiveness.
(c) Contracting officers shall consider the following when
determining whether other than new materials, former Government surplus
property, or residual inventory are acceptable:
(1) Safety of persons or property.
(2) Specification and performance requirements.
(3) Price reasonableness.
(4) Total cost to the Government (including maintenance,
inspection, testing, and useful life).
(d) When a contract calls for material to be furnished at cost, the
allowable charge for former Government surplus property shall not
exceed the cost at which the contractor acquired the property.
11.302 Solicitation provisions and contract clauses.
(a) The contracting officer may insert the clause at 52.211-5, New
Material, in solicitations and contracts for supplies. The clause shall
not be used if it would be contrary to customary commercial practices
for the item being acquired.
(b) The contracting officer shall insert the provision at 52.211-6,
Listing of Other Than New Material, Residual Inventory, and Former
Government
[[Page 48241]]
Surplus Property, in solicitations containing the clause at 52.211-5.
(c) The contracting officer shall insert the clause at 52.211-7,
Other Than New Material, Residual Inventory, and Former Government
Surplus Property, in contracts containing the clause at 52.211-5.
Subpart 11.4--[Redesignated from 12.1]
21. and 22. Subpart 11.4 is redesignated from Subpart 12.1 and
sections 12.101 through 12.104 are redesignated as sections 11.401
through 11.404, respectively.
23. Newly redesignated section 11.401 is amended in paragraph (a)
by revising the last sentence; and in the parenthetical of paragraph
(c) by removing ``Subpart 12.2'' and inserting ``Subpart 11.5''. The
revised text reads as follows:
11.401 General.
(a) * * * Schedules that are unnecessarily short or difficult to
attain
(1) Tend to restrict competition,
(2) Are inconsistent with small business policies, and
(3) May result in higher contract prices.
* * * * *
24. Newly redesignated section 11.402 is amended by revising
paragraphs (a) (2) and (5) to read as follows:
11.402 Factors to consider in establishing schedules.
(a) * * *
(2) Industry practices;
* * * * *
(5) Production time;
* * * * *
11.404 [Amended]
25. Newly redesignated section 11.404 is amended in paragraph
(a)(2) by removing ``52.212-1'' and inserting ``52.211-8''; in
paragraph (a)(3) by removing ``52.212-2'' and inserting ``52.211-9'';
and in paragraph (b) by removing ``52.212-3'' and inserting ``52.211-
10''.
Subpart 11.5--[Redesignated From Subpart 12.2]
26. Subpart 11.5 is redesignated from Subpart 12.2 and sections
11.501 through 11.504 are redesignated from sections 12.201 through
12.204, respectively.
11.504 [Amended]
27. Newly designated 11.504 is amended in paragraph (a) by removing
``52.212-4'' and inserting ``52.211-11''; in paragraph (b) by removing
``52.212-5'' and inserting ``52.211-12''; and in paragraph (c) by
removing ``52.212-6'' and ``52.212-5'' and inserting ``52.211-13'' and
``52.211-12'', respectively.
Subpart 11.6 [Redesignated From 12.3]
28. Subpart 11.6 is redesignated from Subpart 12.3 and sections
11.600 through 11.604 are redesignated from sections 12.300 through
12.304, respectively.
11.604 [Amended]
29. Newly redesignated section 11.604 is amended in paragraph (a)
by removing ``52.212-7'' and inserting ``52.211-14''; and in paragraph
(b) by removing ``52.212-8'' and inserting ``52.211-15''.
Subpart 11.7--[Redesignated From 12.4]
30. Subpart 11.7 is redesignated from Subpart 12.4 and sections
11.701 through 11.703 are redesignated from 12.401 through 12.403,
respectively.
11.703 [Amended]
31. Newly redesignated section 11.703 is amended in paragraph (a)
by removing ``52.212-9'' and inserting ``52.211-16''; in paragraph (b)
by removing ``52.212-10'' and inserting ``52.211-17''; and in paragraph
(c) by removing ``52.212-11'' and inserting ``52.211-18''.
32. Subpart 12.5 is redesignated as Subpart 42.13 and sections
12.501 through 12.505 are redesignated as sections 42.1301 through
42.1305, respectively.
33. Part 12 is revised to read as follows:
PART 12--ACQUISITION OF COMMERCIAL ITEMS
Sec.
12.000 Scope of part.
12.001 Definition.
Subpart 12.1--Acquisition of Commercial Items--General
12.101 Policy.
12.102 Applicability.
Subpart 12.2--Special Requirements for the Acquisition of Commercial
Items
12.201 General.
12.202 Market research and description of agency need.
12.203 Procedures for solicitation, evaluation, and award.
12.204 Solicitation/contract form.
12.205 Offers.
12.206 Use of past performance.
12.207 Contract type.
12.208 Contract quality assurance.
12.209 Pricing of commercial items when contracting by negotiation.
12.210 Contract financing.
12.211 Technical data.
12.212 Computer software.
12.213 Other customary commercial practices.
Subpart 12.3--Solicitation Provisions and Contract Clauses for the
Acquisition of Commercial Items
12.300 Scope of subpart.
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
12.302 Tailoring of provisions and clauses for the acquisition of
commercial items.
12.303 Contract format.
Subpart 12.4--Unique Requirements Regarding Terms and Conditions for
Commercial Items
12.401 General.
12.402 Acceptance.
12.403 Termination.
12.404 Warranties.
Subpart 12.5--Applicability of Certain Laws to the Acquisition of
Commercial Items
12.500 Scope of subpart.
12.501 Applicability.
12.502 Procedures.
12.503 Applicability of certain laws to Executive agency contracts
for the acquisition of commercial items.
12.504 Applicability of certain laws to subcontracts for the
acquisition of commercial items.
Subpart 12.6--Streamlined Procedures for Evaluation and Solicitation
for Commercial Items
12.601 General.
12.602 Streamlined evaluation of offers.
12.603 Streamlined solicitation for commercial items.
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
12.000 Scope of part.
This part prescribes policies and procedures unique to the
acquisition of commercial items. It implements the Federal Government's
preference for the acquisition of commercial items contained in Title
VIII of the Federal Acquisition Streamlining Act of 1994 (Public Law
103-355) by establishing acquisition policies more closely resembling
those of the commercial marketplace and encouraging the acquisition of
commercial items and components.
12.001 Definition.
Subcontract, as used in this part, includes, but is not limited to,
a transfer of commercial items between divisions, subsidiaries, or
affiliates of a contractor or subcontractor.
Subpart 12.1--Acquisition of Commercial Items-- General
12.101 Policy.
Agencies shall--
(a) Conduct market research to determine whether commercial items
or
[[Page 48242]]
nondevelopmental items are available that could meet the agency's
requirements;
(b) Acquire commercial items or nondevelopmental items when they
are available to meet the needs of the agency; and
(c) Require prime contractors and subcontractors at all tiers to
incorporate, to the maximum extent practicable, commercial items or
nondevelopmental items as components of items supplied to the agency.
12.102 Applicability.
(a) This part shall be used for the acquisition of supplies or
services that meet the definition of commercial items at section 2.101.
(b) Contracting officers shall use the policies in this part in
conjunction with the policies and procedures for solicitation,
evaluation and award prescribed in part 13, Simplified Acquisition
Procedures; part 14, Sealed Bidding; or part 15, Contracting by
Negotiation, as appropriate for the particular acquisition.
(c) Contracts for the acquisition of commercial items are subject
to the policies in other parts of this chapter. When a policy in
another part of this chapter is inconsistent with a policy in this
part, this part 12 shall take precedence for the acquisition of
commercial items.
(d) This part shall not apply to the acquisition of commercial
items--
(1) At or below the micro-purchase threshold (see subpart 13.6);
(2) Using the SF 44 (see section 13.505-3);
(3) Using the imprest fund (see subpart 13.4); or
(4) Using the Governmentwide commercial purchase card (see subpart
13.6).
Subpart 12.2--Special Requirements for the Acquisition of
Commercial Items
12.201 General.
Public Law 103-355 establishes special requirements for the
acquisition of commercial items intended to more closely resemble those
customarily used in the commercial marketplace. This subpart identifies
those special requirements as well as other considerations necessary
for proper planning, solicitation, evaluation and award of contracts
for commercial items.
12.202 Market research and description of agency need.
(a) Market research (see 10.001) is an essential element of
building an effective strategy for the acquisition of commercial items
and establishes the foundation for the agency description of need (see
part 11), the solicitation, and resulting contract.
(b) The description of agency need must contain sufficient detail
for potential offerors of commercial items to know which commercial
products or services to offer. Generally, for acquisitions in excess of
the simplified acquisition threshold, an agency's statement of need for
a commercial item will describe the product or service to be acquired
and explain how the agency intends to use the product or service in
terms of function to be performed, performance requirement or essential
physical characteristics. Describing the agency's need in these terms
allows offerors to propose methods that will best meet the needs of the
Government.
(c) Follow the procedures in subpart 11.2 regarding the
identification and availability of specifications, standards and
commercial item descriptions.
12.203 Procedures for solicitation, evaluation, and award.
Contracting officers shall use the policies unique to the
acquisition of commercial items prescribed in this part in conjunction
with the policies and procedures for solicitation, evaluation and award
prescribed in part 13, Simplified Acquisition Procedures; part 14,
Sealed Bidding; or part 15, Contracting by Negotiation, as appropriate
for the particular acquisition. The contracting officer may use the
streamlined procedure for soliciting offers for commercial items
prescribed in 12.603.
12.204 Solicitation/contract form.
The Standard Form 1449, Solicitation/Contract/Order for Commercial
Items, shall be used by the contracting officer when issuing written
solicitations and awarding contracts and placing orders for commercial
items. This form contains the information necessary for solicitations
and contracts. The form may also be used for documenting receipt,
inspection and acceptance of commercial items. Other forms shall not be
used for solicitation or award of contracts or orders for the
acquisition of commercial items.
12.205 Offers.
(a) Where technical information is necessary for evaluation of
offers, agencies should, as part of market research, review existing
product literature generally available in the industry to determine its
adequacy for purposes of evaluation. If adequate, contracting officers
shall request existing product literature from offerors of commercial
items in lieu of unique technical proposals.
(b) Contracting officers should allow offerors to propose more than
one product that will meet a Government need in response to
solicitations for commercial items. The contracting officer shall
evaluate each product as a separate offer.
(c) Contracting officers may, considering the circumstances
described in 5.203(b), allow fewer than 30 days response time for
receipt of offers for commercial items.
12.206 Use of past performance.
Past performance should be an important element of every evaluation
and contract award for commercial items. Contracting officers should
consider past performance data from a wide variety of sources both
inside and outside the Federal Government in accordance with the
policies and procedures contained in subpart 9.1, section 13.106-1, or
subpart 15.6, as applicable.
12.207 Contract type.
Agencies shall use firm-fixed-price contracts or fixed-price
contracts with economic price adjustment for the acquisition of
commercial items. Indefinite-delivery contracts (see subpart 16.5) may
be used where the prices are established based on a firm-fixed-price or
fixed-price with economic price adjustment. Use of any other contract
type to acquire commercial items is prohibited.
12.208 Contract quality assurance.
Contracts for commercial items shall rely on contractors' existing
quality assurance systems as a substitute for Government inspection and
testing before tender for acceptance unless customary market practices
for the commercial item being acquired include in-process inspection.
Any in-process inspection by the Government shall be conducted in a
manner consistent with commercial practice.
12.209 Pricing of commercial items when contracting by negotiation.
(a) When contracting by negotiation for commercial items, the
policies and procedures in part 15 shall be used to establish the
reasonableness of prices.
(b) The provisions and clauses prescribed in this part for the
acquisition of commercial items do not include the provisions and
clauses prescribed in part 15 because they assume prices for commercial
items will either
(1) Not be subject to the Truth in Negotiations Act because the
contract
[[Page 48243]]
price is below the dollar threshold for application of the Act; or
(2) Be based upon one of the exceptions to cost or pricing data
requirements contained in 15.804-1(a)(1).
(c) If the contracting officer determines it is appropriate to use
the commercial item exception to cost or pricing data requirements (see
15.804-1(a)(2)), the provisions and clauses prescribed in 15.804-8 and
15.106 for this purpose shall be inserted in an addendum to the
solicitation and contract.
(d) If the contracting officer is required to obtain cost or
pricing data (see 15.804-1(b)(4) and 15.804-2), the provisions and
clauses prescribed in 15.804-8 and 15.106 for this purpose shall be
inserted in an addendum to the solicitation and contract.
(e) When a contract is priced using the exceptions at 15.804-
1(a)(1), no cost or pricing data may be obtained for modifications
unless the proposed modification would change the contract from a
contract for a commercial item to a contract for other than a
commercial item (see 15.804-1(b)(6)). If the exceptions at 15.804-
1(a)(1) are not used, the contracting officer may be required to obtain
cost or pricing data to determine the reasonableness of prices for
subsequent modifications (see 15.804-2(a)(1)) and the contracting
officer shall insert the provisions and clauses prescribed for this
purpose in an addendum to the solicitation and contract.
12.210 Contract financing.
Customary market practice for some commercial items may include
buyer contract financing. The contracting officer may offer Government
financing in accordance with the policies and procedures in part 32.
12.211 Technical data.
Except as provided by agency-specific statutes, the Government
shall acquire only the technical data and the rights in that data
customarily provided to the public with a commercial item or process.
The contracting officer shall presume that data delivered under a
contract for commercial items was developed exclusively at private
expense. When a contract for commercial items requires the delivery of
technical data, the contracting officer shall include appropriate
provisions and clauses delineating the rights in the technical data in
addenda to the solicitation and contract (see part 27 or agency FAR
supplements).
12.212 Computer software.
(a) Commercial computer software or commercial computer software
documentation shall be acquired under licenses customarily provided to
the public to the extent such licenses are consistent with Federal law
and otherwise satisfy the Government's needs. Generally, offerors and
contractors shall not be required to--
(1) Furnish technical information related to commercial computer
software or commercial computer software documentation that is not
customarily provided to the public; or
(2) Relinquish to, or otherwise provide, the Government rights to
use, modify, reproduce, release, perform, display, or disclose
commercial computer software or commercial computer software
documentation except as mutually agreed to by the parties.
(b) With regard to commercial computer software and commercial
computer software documentation, the Government shall have only those
rights specified in the license contained in any addendum to the
contract.
12.213 Other customary commercial practices.
It is customary practice in the commercial marketplace for both the
buyer and seller to propose terms and conditions for a given
transaction, each written from their particular perspectives. The terms
and conditions prescribed in this part 12 seek to balance the interests
of both the buyer and seller. These terms and conditions are generally
appropriate for use in a wide range of acquisitions. However, market
research may indicate other customary commercial practices that are
appropriate for the acquisition of the particular item. These practices
should be considered for incorporation into the solicitation and
contract if the contracting officer determines them appropriate in
concluding a business arrangement satisfactory to both parties and not
otherwise precluded by law or executive order.
Subpart 12.3--Solicitation Provisions and Contract Clauses for the
Acquisition of Commercial Items
12.300 Scope of subpart.
This subpart establishes provisions and clauses to be used when
acquiring commercial items.
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
(a) In accordance with Section 8002 of Public Law 103-355 (41 U.S.C
264, note), contracts for the acquisition of commercial items shall, to
the maximum extent practicable, include only those clauses--
(1) Required to implement provisions of law or executive orders
applicable to the acquisition of commercial items; or
(2) Determined to be consistent with customary commercial practice.
(b) To implement this Act, the contracting officer shall insert the
following provisions in solicitations for the acquisition of commercial
items, and clauses in solicitations and contracts for the acquisition
of commercial items:
(1) The provision at 52.212-1, Instructions to Offerors--Commercial
Items. This provision provides a single, streamlined set of
instructions to be used when soliciting offers for commercial items and
is incorporated in the solicitation by reference (see Block 26, SF
1449). The contracting officer may tailor these instructions or provide
additional instructions tailored to the specific acquisition in
accordance with 12.302;
(2) The provision at 52.212-3, Offeror Representations and
Certifications--Commercial Items. This provision provides a single,
consolidated list of certifications and representations for the
acquisition of commercial items and is attached to the solicitation for
offerors to complete and return with their offer. This provision may
not be tailored except in accordance with Subpart 1.4;
(3) The clause at 52.212-4, Contract Terms and Conditions--
Commercial Items. This clause includes terms and conditions which are,
to the maximum extent practicable, consistent with customary commercial
practices and is incorporated in the solicitation and contract by
reference (see Block 26, SF 1449). The contracting officer may tailor
this clause in accordance with 12.302; and
(4) The clause at 52.212-5, Contract Terms and Conditions Required
to Implement Statutes or Executive Orders--Commercial Items. This
clause incorporates by reference only those clauses required to
implement provisions of law or executive orders applicable to the
acquisition of commercial items. The contracting officer shall attach
this clause to the solicitation and contract and, using the appropriate
clause prescriptions, indicate which, if any, of the additional clauses
cited in 52.2125(b) or (c) are applicable to the specific acquisition.
When cost information is obtained pursuant to part 15 to establish the
reasonableness of prices for commercial items, the contracting officer
shall insert the clauses prescribed for this purpose in an addendum to
the solicitation and contract. This clause may not be tailored.
[[Page 48244]]
(c) When the use of evaluation factors is appropriate, the
contracting officer may--
(1) Insert the provision at 52.212-2, Evaluation-- Commercial
Items, in solicitations for commercial items (see 12.602); or
(2) Include a similar provision containing all evaluation factors
required by section 13.106-1, Subpart 14.2 or subpart 15.6, as an
addendum (see 12.302(d)).
(d) Use of required provisions and clauses. Notwithstanding
prescriptions contained elsewhere in the FAR, when acquiring commercial
items, contracting officers shall be required to use only those
provisions and clauses prescribed in this part. The provisions and
clauses prescribed in this part shall be revised, as necessary, to
reflect the applicability of statutes and executive orders to the
acquisition of commercial items.
(e) Discretionary use of FAR provisions and clauses. The
contracting officer may include in solicitations and contracts by
addendum other FAR provisions and clauses when their use is consistent
with the limitations contained in 12.302. For example:
(1) The contracting officer may include appropriate clauses when an
indefinite-delivery type of contract will be used. The clauses
prescribed at 16.505 may be used for this purpose.
(2) The contracting officer may include appropriate provisions and
clauses when the use of options is in the Government's interest. The
provisions and clauses prescribed in 17.208 may be used for this
purpose. If the provision at 52.212-2 is used, paragraph (b) provides
for the evaluation of options.
(3) The contracting officer may use the provisions and clauses
contained in part 23 regarding the use of recovered material when
appropriate for the item being acquired.
(f) Agencies may supplement the provisions and clauses prescribed
in this part (to require use of additional provisions and clauses) only
as necessary to reflect agency unique statutes applicable to the
acquisition of commercial items or as may be approved by the agency
senior procurement executive, or the individual responsible for
representing the agency on the FAR Council, without power of
delegation.
12.302 Tailoring of provisions and clauses for the acquisition of
commercial items.
(a) General. The provisions and clauses established in this subpart
are intended to address, to the maximum extent practicable, customary
commercial market practices for a wide range of potential Government
acquisitions of commercial items. However, because of the broad range
of commercial items acquired by the Government, variations in customary
commercial practices across markets and the relative volume of the
Government's acquisitions in the specific market, contracting officers
may, within the limitations of this subpart, and after conducting
appropriate market research, tailor the provision at 52.212-1,
Instructions to Offerors--Commercial Items, and the clause at 52.212-4,
Contract Terms and Conditions--Commercial Items, to adapt to the market
conditions for each acquisition.
(b) Tailoring 52.212-4, Contract Terms and Conditions--Commercial
Items. The following paragraphs of the clause at 52.212-4, Contract
Terms and Conditions--Commercial Items, implement statutory
requirements and shall not be tailored--
(1) Assignments;
(2) Disputes;
(3) Payment;
(4) Invoice;
(5) Other compliances; and
(6) Compliance with laws unique to Government contracts.
(c) Tailoring inconsistent with customary commercial practice. The
contracting officer shall not tailor any clause or otherwise include
any additional terms or conditions in a solicitation or contract for
commercial items in a manner that is inconsistent with customary
commercial practice for the item being acquired unless a waiver is
approved in accordance with agency procedures. The request for waiver
must describe the customary commercial practice found in the
marketplace, support the need to include a term or condition that is
inconsistent with that practice and include a determination that use of
the customary commercial practice is inconsistent with the needs of the
Government. A waiver may be requested for an individual or class of
contracts for that specific item.
(d) Tailoring shall be by addenda to the solicitation and contract.
The contracting officer shall indicate in Block 26 of the SF 1449 if
addenda are attached. These addenda may include, for example, a
continuation of the schedule of supplies/services to be acquired from
blocks 18 through 21 of the SF 1449; a continuation of the description
of the supplies/services being acquired; further elaboration of any
other item(s) on the SF 1449; any other terms or conditions necessary
for the performance of the proposed contract (such as options, ordering
procedures for indefinite-delivery type contracts, warranties, contract
financing arrangements, etc.).
12.303 Contract format.
Solicitations and contracts for the acquisition of commercial items
prepared using this part 12 shall be assembled, to the maximum extent
practicable, using the following format:
(a) Standard Form (SF) 1449;
(b) Continuation of any block from SF 1449, such as--
(1) Block 10 if set-aside for emerging small businesses;
(2) Block 16B for remittance address;
(3) Block 18 for contract line item numbers;
(4) Block 19 for schedule of supplies/services; or
(5) Block 24 for accounting data;
(c) Contract clauses--
(1) 52.212-4, Contract Terms and Conditions--Commercial Items, by
reference (see SF 1449, Block 26);
(2) Any addendum to 52.212-4; and
(3) 52.212-5, Contract Terms and Conditions Required to Implement
Statutes and Executive Orders;
(d) Any contract documents, exhibits or attachments; and
(e) Solicitation provisions--
(1) 52.212-1, Instructions to Offerors--Commercial Items, by
reference (see SF 1449, Block 26);
(2) Any addendum to 52.212-1;
(3) 52.212-2, Evaluation--Commercial Items, or other description of
evaluation factors for award, if used; and
(4) 52.212-3, Offeror Representations and Certifications--
Commercial Items.
Subpart 12.4--Unique Requirements Regarding Terms and Conditions
for Commercial Items
12.401 General.
This subpart provides--
(a) Guidance regarding tailoring of the paragraphs in the clause at
52.212-4, Contract Terms and Conditions--Commercial Items, when the
paragraphs do not reflect the customary practice for a particular
market; and
(b) Guidance on the administration of contracts for commercial
items in those areas where the terms and conditions in 52.212-4 differ
substantially from those contained elsewhere in the FAR.
12.402 Acceptance.
(a) The acceptance paragraph in 52.212-4 is based upon the
assumption that the Government will rely on the contractor's assurances
that the commercial item tendered for acceptance conforms to the
contract requirements. The Government inspection of commercial items
will not
[[Page 48245]]
prejudice its other rights under the acceptance paragraph.
Additionally, although the paragraph does not address the issue of
rejection, the Government always has the right to refuse acceptance of
nonconforming items. This paragraph is generally appropriate when the
Government is acquiring noncomplex commercial items.
(b) Other acceptance procedures may be more appropriate for the
acquisition of complex commercial items or commercial items used in
critical applications. In such cases, the contracting officer shall
include alternative inspection procedure(s) in an addendum and ensure
these procedures and the postaward remedies adequately protect the
interests of the Government. The contracting officer must carefully
examine the terms and conditions of any express warranty with regard to
the effect it may have on the Government's available postaward remedies
(see 12.404).
(c) The acquisition of commercial items under other circumstances
such as on an ``as is'' basis may also require acceptance procedures
different from those contained in 52.212-4. The contracting officer
should consider the effect the specific circumstances will have on the
acceptance paragraph as well as other paragraphs of the clause.
12.403 Termination.
(a) General. The clause at 52.212-4 permits the Government to
terminate a contract for commercial items either for the convenience of
the Government or for cause. However, the paragraphs in 52.212-4
entitled ``Termination for the Government's Convenience'' and
``Termination for Cause'' contain concepts which differ from those
contained in the termination clauses prescribed in part 49.
Consequently, the requirements of part 49 do not apply when terminating
contracts for commercial items and contracting officers shall follow
the procedures in this section. Contracting officers may continue to
use part 49 as guidance to the extent that part 49 does not conflict
with this section and the language of the termination paragraphs in
52.212-4.
(b) Policy. The contracting officer should exercise the
Government's right to terminate a contract for commercial items either
for convenience or for cause only when such a termination would be in
the best interests of the Government. The contracting officer should
consult with counsel prior to terminating for cause.
(c) Termination for cause. (1) The paragraph in 52.2124 entitled
``Excusable Delay'' requires contractors notify the contracting officer
as soon as possible after commencement of any excusable delay. In most
situations, this requirement should eliminate the need for a show cause
notice prior to terminating a contract. The contracting officer shall
send a cure notice prior to terminating a contract for a reason other
than late delivery.
(2) The Government's rights after a termination for cause shall
include all the remedies available to any buyer in the marketplace. The
Government's preferred remedy will be to acquire similar items from
another contractor and to charge the defaulted contractor with any
excess reprocurement costs together with any incidental or
consequential damages incurred because of the termination.
(3) When a termination for cause is appropriate, the contracting
officer shall send the contractor a written notification regarding the
termination. At a minimum, this notification shall--
(i) Indicate the contract is terminated for cause;
(ii) Specify the reasons for the termination;
(iii) Indicate which remedies the Government intends to seek or
provide a date by which the Government will inform the contractor of
the remedy; and
(iv) State that the notice constitutes a final decision of the
contracting officer and that the contractor has the right to appeal
under the Disputes clause (see 33.211).
(d) Termination for the Government's convenience. (1) When the
contracting officer terminates a contract for commercial items for the
Government's convenience, the contractor shall be paid--
(i) The percentage of the contract price reflecting the percentage
of the work performed prior to the notice of the termination, and
(ii) Any charges the contractor can demonstrate directly resulted
from the termination. The contractor may demonstrate such charges using
its standard record keeping system and is not required to comply with
the cost accounting standards or the contract cost principles in part
31. The Government does not have any right to audit the contractor's
records solely because of the termination for convenience.
(2) Generally, the parties should mutually agree upon the
requirements of the termination proposal. The parties must balance the
Government's need to obtain sufficient documentation to support payment
to the contractor against the goal of having a simple and expeditious
settlement.
12.404 Warranties.
(a) Implied warranties. The Government's post award rights
contained in 52.212-4 are the implied warranty of merchantability, the
implied warranty of fitness for particular purpose and the remedies
contained in the acceptance paragraph.
(1) The implied warranty of merchantability provides that an item
is reasonably fit for the ordinary purposes for which such items are
used. The items must be of at least average, fair or medium-grade
quality and must be comparable in quality to those that will pass
without objection in the trade or market for items of the same
description.
(2) The implied warranty of fitness for a particular purpose
provides that an item is fit for use for the particular purpose for
which the Government will use the items. The Government can rely upon
an implied warranty of fitness for particular purpose when--
(i) The seller knows the particular purpose for which the
Government intends to use the item; and
(ii) The Government relied upon the contractor's skill and judgment
that the item would be appropriate for that particular purpose.
(3) Contracting officers should consult with legal counsel prior to
asserting any claim for a breach of an implied warranty.
(b) Express warranties. The Federal Acquisition Streamlining Act of
1994 (41 U.S.C. 264 note) requires contracting officers to take
advantage of commercial warranties. To the maximum extent practicable,
solicitations for commercial items shall require offerors to offer the
Government at least the same warranty terms, including offers of
extended warranties, offered to the general public in customary
commercial practice. Solicitations may specify minimum warranty terms,
such as minimum duration, appropriate for the Government's intended use
of the item.
(1) Any express warranty the Government intends to rely upon must
meet the needs of the Government. The contracting officer should
analyze any commercial warranty to determine if--
(i) The warranty is adequate to protect the needs of the
Government, e.g., items covered by the warranty and length of warranty;
(ii) The terms allow the Government effective postaward
administration of the warranty to include the identification of
warranted items, procedures for the return of warranted items to the
contractor for repair or replacement, and collection of product
performance information; and
(iii) The warranty is cost-effective.
[[Page 48246]]
(2) In some markets, it may be customary commercial practice for
contractors to exclude or limit the implied warranties contained in
52.212-4 in the provisions of an express warranty. In such cases, the
contracting officer shall ensure that the express warranty provides for
the repair or replacement of defective items discovered within a
reasonable period of time after acceptance.
(3) Express warranties shall be included in the contract by
addendum (see 12.302).
Subpart 12.5--Applicability of Certain Laws to the Acquisition of
Commercial Items
12.500 Scope of subpart.
As required by Section 34 of the Office of Federal Procurement
Policy Act (41 U.S.C. 430), this subpart lists provisions of laws that
are not applicable to contracts for the acquisition of commercial
items, or are not applicable to subcontracts, at any tier, for the
acquisition of a commercial item. This subpart also lists provisions of
law that have been amended to eliminate or modify their applicability
to either contracts or subcontracts for the acquisition of commercial
items.
12.501 Applicability.
(a) This subpart applies to any contract or subcontract at any tier
for the acquisition of commercial items.
(b) Nothing in this subpart shall be construed to authorize the
waiver of any provision of law with respect to any subcontract if the
prime contractor is reselling or distributing commercial items of
another contractor without adding value. This limitation is intended to
preclude establishment of unusual contractual arrangements solely for
the purpose of Government sales.
(c) For purposes of this subpart, contractors awarded subcontracts
under subpart 19.8, Contracting with the Small Business Administration
(the 8(a) Program), shall be considered prime contractors.
12.502 Procedures.
(a) The FAR prescription for the provision or clause for each of
the laws listed in 12.503 has been revised in the appropriate part to
reflect its proper application to prime contracts for the acquisition
of commercial items.
(b) For subcontracts for the acquisition of commercial items or
commercial components, the clauses at 52.212-5, Contract Terms and
Conditions Required to Implement Statutes or Executive Orders--
Commercial Items, and 52.244-6, Subcontracts for Commercial Items and
Commercial Components, reflect the applicability of the laws listed in
12.504 by identifying the only provisions and clauses that are required
to be included in a subcontract at any tier for the acquisition of
commercial items or commercial components.
12.503 Applicability of certain laws to executive agency contracts for
the acquisition of commercial items.
(a) The following laws are not applicable to executive agency
contracts for the acquisition of commercial items:
(1) 41 U.S.C. 43, Walsh-Healey Act (see subpart 22.6).
(2) 41 U.S.C. 254(a) and 10 U.S.C. 2306(b), Contingent Fees (see
3.404).
(3) 41 U.S.C. 416(a)(6), Minimum Response Time for Offers under
Office of Federal Procurement Policy Act (see 5.203).
(4) 41 U.S.C. 701, et seq., Drug-Free Workplace Act of 1988 (see
23.501).
(b) Certain requirements of the following laws have been eliminated
for executive agency contracts for the acquisition of commercial items:
(1) 33 U.S.C. 1368, Requirement for a certificate and clause under
the Federal Water Pollution Control Act (see 23.105).
(2) 40 U.S.C. 327 et seq., Requirement for a certificate and clause
under the Contract Work Hours and Safety Standards Act (see 22.305).
(3) 41 U.S.C. 57(a) and (b), and 58, Requirement for a clause and
certain other requirements related to the Anti-Kickback Act of 1986
(see 3.502).
(4) 41 U.S.C. 423(e)(1)(B), Requirement for a certain certification
under the Procurement Integrity Act (see 3.104-9).
(5) 42 U.S.C. 7606, Requirements for a certificate and clause under
the Clean Air Act (see 23.105).
(6) 49 U.S.C. 40118, Requirement for a certificate and clause under
the Fly American provisions (see 47.405).
(c) The applicability of the following laws have been modified in
regards to Executive agency contracts for the acquisition of commercial
items:
(1) 41 U.S.C. 253g and 10 U.S.C. 2402, Prohibition on Limiting
Subcontractor Direct Sales to the United States (see 3.503).
(2) 41 U.S.C. 254(d) and 10 U.S.C. 2306a, Truth in Negotiations Act
(see 15.804).
(3) 41 U.S.C. 422, Cost Accounting Standards (see 48 CFR chapter
99).
12.504 Applicability of certain laws to subcontracts for the
acquisition of commercial items.
(a) The following laws are not applicable to subcontracts at any
tier for the acquisition of commercial items or commercial components
at any tier:
(1) 15 U.S.C. 644(d), Requirements relative to labor surplus areas
under the Small Business Act (see subpart 19.2).
(2) 19 U.S.C. 1202, Tariff Act of 1930 (see subpart 25.6).
(3) 19 U.S.C. 1309, Supplies for Certain Vessels and Aircraft (see
subpart 25.6).
(4) 19 U.S.C. 2701, et seq., Authority to Grant Duty Free Treatment
(see subpart 25.6).
(5) 31 U.S.C. 1352, Limitation on Payments to Influence Certain
Federal Transactions (see subpart 3.8).
(6) 41 U.S.C. 43, Walsh-Healey Act (see subpart 22.6).
(7) 41 U.S.C. 253d, Validation of Proprietary Data Restrictions
(see subpart 27.4).
(8) 41 U.S.C. 254(a) and 10 U.S.C. 2306(b), Contingent Fees (see
subpart 3.4).
(9) 41 U.S.C. 254d(c) and 10 U.S.C. 2313(c), Examination of Records
of Contractor, when a subcontractor is not required to provide cost or
pricing data (see subpart 15.1).
(10) 41 U.S.C. 351, Service Contract Act of 1965, as amended (see
subpart 22.10).
(11) 41 U.S.C. 416(a)(6), Minimum Response Time for Offers under
Office of Federal Procurement Policy Act (see subpart 5.2).
(12) 41 U.S.C. 418a, Rights in Technical Data (see subpart 27.4).
(13) 41 U.S.C. 701, et seq., Drug-Free Workplace Act of 1988 (see
subpart 23.5).
(14) 46 U.S.C. 1241(b), Transportation in American Vessels of
Government Personnel and Certain Cargo (see subpart 47.5)
(inapplicability effective May 1, 1996).
(15) 49 U.S.C. 40118, Fly American provisions (see subpart 47.4).
(16) Public Law 90-469, William Langer Jewel Bearing Plant Special
Act (see subpart 8.2).
(b) Certain requirements of the following laws have been eliminated
for subcontracts at any tier for the acquisition of commercial items or
commercial components:
(1) 33 U.S.C. 1368, Requirement for a certificate and clause under
the Federal Water Pollution Control Act (see subpart 23.1).
(2) 40 U.S.C. 327, et seq., Requirement for a certificate and
clause under the Contract Work Hours and Safety Standards Act (see
subpart 22.3).
(3) 41 U.S.C. 423(e)(1)(B), Requirement for certain certifications
under the Procurement Integrity Act (see subpart 3.1).
[[Page 48247]]
(4) 42 U.S.C. 7606, Requirements for a certificate and clause under
the Clean Air Act (see subpart 23.1).
(c) The applicability of the following laws have been modified in
regards to subcontracts at any tier for the acquisition of commercial
items or commercial components:
(1) 41 U.S.C. 253g and 10 U.S.C. 2402, Prohibition on Limiting
Subcontractor Direct Sales to the United States (see subpart 3.5).
(2) 41 U.S.C. 254(d) and 10 U.S.C. 2306a, Truth in Negotiations Act
(see subpart 15.8).
(3) 41 U.S.C. 422, Cost Accounting Standards (see 48 CFR chapter
99).
Subpart 12.6--Streamlined Procedures for Evaluation and
Solicitation for Commercial Items
12.601 General.
This subpart provides optional procedures for--
(a) Streamlined evaluation of offers for commercial items; and
(b) Streamlined solicitation of offers for commercial items for use
where appropriate.
These procedures are intended to simplify the process of preparing
and issuing solicitations, and evaluating offers for commercial items
consistent with customary commercial practices.
12.602 Streamlined evaluation of offers.
(a) When evaluation factors are used, the contracting officer may
insert a provision substantially the same as the provision at 52.212-2,
Evaluation--Commercial Items, in solicitations for commercial items or
comply with the procedures in 13.106-1 if the acquisition is being made
using the procedures in part 13. When the provision at 52.212-2 is
used, paragraph (a) of the provision shall be tailored to the specific
acquisition to describe the evaluation factors and relative importance
of those factors. This provision contemplates an approach designed to
select the source whose offer will provide the Government with the
greatest value in terms of performance and other factors. Other methods
of evaluation and basis for award may be more appropriate for a given
acquisition.
(b) Offers shall be evaluated in accordance with the criteria
contained in the solicitation. For many commercial items, the criteria
need not be more detailed than technical (capability of the item
offered to meet the agency need), price and past performance. Technical
capability may be evaluated by how well the proposed products meet the
Government requirement instead of predetermined subfactors.
Solicitations for commercial items do not have to contain subfactors
for technical capability when the solicitation adequately describes the
item's intended use. A technical evaluation would normally include
examination of such things as product literature, product samples (if
requested), technical features and warranty provisions. Past
performance shall be evaluated in accordance with the procedures in
section 13.106-1 or subpart 15.6, as applicable. The contracting
officer shall ensure the instructions provided in the provision at
52.212-1, Instructions to Offerors--Commercial Items, and the
evaluation criteria provided in the provision at 52.212-2, Evaluation--
Commercial Items, are in agreement.
(c) Select the offer that is most advantageous to the Government
based on the factors contained in the solicitation. Fully document the
rationale for selection of the successful offeror including discussion
of any tradeoffs considered.
12.603 Streamlined solicitation for commercial items.
(a) When a written solicitation will be issued, the contracting
officer may use the following procedure to reduce the time required to
solicit and award contracts for the acquisition of commercial items.
This procedure combines the Commerce Business Daily (CBD) synopsis
required by 5.203 and the issuance of the solicitation into a single
document with the following limitations:
(1) Section 5.207 limits submissions to the CBD to 12,000 textual
characters (approximately 3 \1/2\ single-spaced pages).
(2) This combined CBD synopsis/solicitation is only appropriate
where the solicitation is relatively simple and is not recommended for
use when lengthy addenda to the solicitation are necessary.
(b) When using the combined synopsis/solicitation procedure, the SF
1449 is not used for issuing the solicitation.
(c) To use these procedures, the contracting officer shall--
(1) Prepare the synopsis as described at 5.207 for items 1-16.
(2) In item 17, Description, include the following additional
information:
(i) The following statement:
This is a combined synopsis/solicitation for commercial items
prepared in accordance with the format in FAR Subpart 12.6, as
supplemented with additional information included in this notice.
This announcement constitutes the only solicitation; proposals are
being requested and a written solicitation will not be issued.
(ii) The solicitation number and a statement that the solicitation
is issued as an invitation to bid (IFB), request for quotation (RFQ) or
request for proposal (RFP).
(iii) A statement that the solicitation document and incorporated
provisions and clauses are those in effect through Federal Acquisition
Circular ______.
(iv) A notice regarding any set-aside and the associated standard
industrial classification code and small business size standard. Also
include a statement regarding the Small Business Competitiveness
Demonstration Program, if applicable.
(v) A list of contract line item number(s) and items, quantities
and units of measure, (including option(s), if applicable).
(vi) Description of requirements for the items to be acquired.
(vii) Date(s) and place(s) of delivery and acceptance and FOB
point.
(viii) A statement that the provision at 52.212-1, Instructions to
Offerors--Commercial, applies to this acquisition and a statement
regarding any addenda to the provision.
(ix) A statement regarding the applicability of the provision at
52.212-2, Evaluation--Commercial Items, if used, and the specific
evaluation criteria to be included in paragraph (a) of that provision.
If this provision is not used, describe the evaluation procedures to be
used.
(x) A statement advising offerors to include a completed copy of
the provision at 52.212-3, Offeror Representations and Certifications--
Commercial Items, with its offer.
(xi) A statement that the clause at 52.212-4, Contract Terms and
Conditions--Commercial Items, applies to this acquisition and a
statement regarding any addenda to the clause.
(xii) A statement that the clause at 52.212-5, Contract Terms and
Conditions Required To Implement Statutes Or Executive Orders--
Commercial Items, applies to this acquisition and a statement regarding
which, if any, of the additional FAR clauses cited in the clause are
applicable to the acquisition.
(xiii) A statement regarding any additional contract requirement(s)
or terms and conditions (such as contract financing arrangements,
warranty requirements or GSA Delegation of Procurement Authority (DPA)
case number (see 48 CFR 201-39.106-4)) determined by the contracting
officer to be necessary for this acquisition and consistent with
customary commercial practices.
[[Page 48248]]
(xiv) A statement regarding the Defense Priorities and Allocations
System (DPAS) and assigned rating, if applicable.
(xv) A statement regarding any applicable Commerce Business Daily
numbered notes.
(xvi) The date, time and place offers are due.
(xvii) The name and telephone number of the individual to contact
for information regarding the solicitation.
(3) Allow response time for receipt of offers as follows:
(i) Because the CBD synopsis and solicitation are contained in a
single document, it is not necessary to publish a separate CBD synopsis
15 days before the issuance of the solicitation.
(ii) When using the combined CBD synopsis/solicitation, contracting
officers shall establish a response time in accordance with 5.203(b),
but shall allow at least 15 days response time from the date the notice
is published in the CBD.
(4) Publish amendments to solicitations in the same manner as the
initial synopsis/solicitation.
PART 14--SEALED BIDDING
14.201-2 [Amended]
34. Section 14.201-2 is amended in the parenthetical of paragraphs
(b) and (c) by removing ``part 10, Specifications, Standards, and Other
Product Descriptions'' and inserting ``part 11'' in its place; in
paragraph (d) by removing ``(see 10.004(e))''; and in the parenthetical
of paragraph (f) by revising the parenthetical to read ``(see subpart
11.4, Delivery or Performance Schedules).''
14.404-1 [Amended]
35. Section 14.404-1 is amended in paragraph (b) by removing
``10.008'' and inserting ``11.201''.
PART 15--CONTRACTING BY NEGOTIATION
15.406-2 [Amended]
36. Section 15.406-2 is amended in the parenthetical of paragraph
(c) by removing ``part 10, Specifications, Standards, and Other Product
Descriptions'' and inserting ``part 11''; in paragraph (d) by removing
``(see 10.004(e))''; and in paragraph (f) by revising the parenthetical
to read ``(subpart 11.4, Delivery or Performance Schedules, and 47.301-
1).''
37. Section 15.501 is amended by revising the definition
``Commercial product offer'' to read as follows:
15.501 Definitions.
* * * * *
Commercial item offer means an offer of a commercial item the
vendor wishes to see introduced in the Government's supply system as an
alternate or replacement for an existing supply item.
* * * * *
15.503 [Amended]
38. Section 15.503 is amended in paragraph (b) by removing the word
``product'' and inserting ``item''.
39. Section 15.704 is amended by revising the second sentence to
read as follows:
15.704 Items and work included.
* * * Raw materials, commercial items (see 2.101), and off-the-
shelf items (see 46.101) shall not be included, unless their potential
impact on contract cost or schedule is critical. * * *
PART 16--TYPES OF CONTRACTS
40. Section 16.201 is amended by adding a sentence at the end of
the paragraph to read as follows:
16.201 General.
* * * The contracting officer shall use firm-fixed-price or fixed-
price with economic price adjustment contracts when acquiring
commercial items.
41. Section 16.202-2 is amended by revising the introductory
paragraph to read as follows:
16.202-2 Application.
A firm-fixed-price contract is suitable for acquiring commercial
items (see parts 2 and 12) or for acquiring other supplies or services
on the basis of reasonably definite functional or detailed
specifications (see part 11) when the contracting officer can establish
fair and reasonable prices at the outset, such as when--
* * * * *
42. Section 16.301-3 is amended by redesignating paragraphs (a)
through (c) as paragraph (a)(1) through (a)(3), respectively;
designating the introductory text as paragraph (a) introductory text
and adding new (b) to read as follows:
16.301-3 Limitations.
* * * * *
(b) The use of cost-reimbursement contracts is prohibited for the
acquisition of commercial items (see parts 2 and 12).
16.603-2 [Amended]
43. Section 16.603-2 is amended in paragraph (e) by removing
``12.304'' and inserting ``11.604''.
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
44. Section 22.305 is amended by redesignating paragraph (g) as (h)
and adding a new paragraph (g) to read as follows:
22.305 Contract clause.
* * * * *
(g) Contracts for commercial items (see parts 2 and 12).
* * * * *
45. Section 22.604-1 is amended by revising paragraph (a) to read
as follows:
22.604-1 Statutory exemptions.
* * * * *
(a) Any item in those situations where the contracting officer is
authorized by the express language of a statute to purchase ``in the
open market'' generally (such as commercial items, see part 12); or
where a specific purchase is made under the conditions described in
6.302-2 in circumstances where immediate delivery is required by the
public exigency.
* * * * *
PART 23--ENVIRONMENTAL, CONSERVATION, OCCUPATIONAL SAFETY, AND
DRUG-FREE WORKPLACE
46. Section 23.104 is amended in paragraph (a)(1) by removing the
word ``or'' the second time it is used; in paragraph (a)(2) by removing
the period and inserting ``; or'' and adding paragraph (a)(3) to read
as follows:
23.104 Exemptions.
(a) * * * (3) for commercial items.
* * * * *
47. Section 23.501 is amended by redesignating paragraphs (b)
through (d) as (c) through (e) and adding a new paragraph (b) to read
as follows:
23.501 Applicability.
* * * * *
(b) Contracts for the acquisition of commercial items (see part
12);
* * * * *
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
31.106-3 [Amended]
48. Section 31.106-3 is amended in the section heading and the
first sentence of the undesignated paragraph by removing the word
``products'' and inserting ``items'' in their place.
[[Page 48249]]
PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
36.202 [Amended]
49. Section 36.202 is amended in paragraph (a) by removing ``part
10'' and inserting ``part 11'' in its place.
36.206 [Amended]
50. Section 36.206 is amended by removing ``12.202'' and inserting
``11.502''.
36.303 [Amended]
51. Section 36.303 is amended in paragraph (c)(4) by removing
``12.1'' and inserting ``11.4''.
PART 42--CONTRACT ADMINISTRATION
42.1105 [Amended]
53. Section 42.1105 is amended by removing the reference ``subpart
12.3'' and inserting ``subpart 11.6''.
Subpart 42.13--[Redesignated from Subpart 12.5]
42.1304 [Amended]
54. and 55. Newly redesignated section 42.1304 (redesignated from
12.504) is amended in paragraph (a) by removing ``52.212-15'' and
inserting ``52.242-17''; and at the end of paragraph (d) by removing
the period and inserting ``, or information other than cost or pricing
data.'' in its place.
42.1305 [Amended]
56. Newly redesignated section 42.1305 (redesignated from 12.505)
is amended in paragraph (a) by removing ``52.212-12'' and inserting
``52.24214''; in paragraph (b)(1) by removing ``52.212-13'' and
inserting ``52.242-15''; in paragraph (c) by removing ``52.21214'' and
inserting ``52.242-16''; and in paragraph (d) by removing ``52.212-15''
and inserting ``52.242-17''.
PART 44--SUBCONTRACTING POLICIES AND PROCEDURES
57. Subpart 44.4, consisting of sections 44.400 through 44.403, is
added to read as follows:
Subpart 44.4--Subcontracts for Commercial Items and Commercial
Components
Sec.
44.400 Scope of subpart.
44.401 Applicability.
44.402 Policy requirements.
44.403 Contract clause.
Subpart 44.4--Subcontracts for Commercial Items and Commercial
Components
44.400 Scope of subpart.
This subpart prescribes the policies limiting the contract clauses
a prime contractor may be required to apply to any subcontractors that
are furnishing commercial items or commercial components in accordance
with Section 8002(b)(2) (Public Law 103-355).
44.401 Applicability.
This subpart applies to all contracts and subcontracts. For the
purpose of this subpart, the term ``subcontract'' has the same meaning
as defined in part 12.
44.402 Policy requirements.
(a) Contractors and subcontractors at all tiers shall, to the
maximum extent practicable:
(1) Be required to incorporate commercial items or nondevelopmental
items as components of items delivered to the Government; and
(2) Not be required to apply to any of its divisions, subsidiaries,
affiliates, subcontractors or suppliers that are furnishing commercial
items or commercial components any clause, except those--
(i) Required to implement provisions of law or executive orders
applicable to subcontractors furnishing commercial items or commercial
components; or
(ii) Determined to be consistent with customary commercial practice
for the item being acquired.
(b) The clause at 52.244-6, Subcontracts for Commercial Items and
Commercial Components, implements the policy in paragraph (a) of this
section. Notwithstanding any other clause in the prime contract, only
those clauses identified in the clause at 52.244-6 are required to be
in subcontracts for commercial items or commercial components.
(c) Agencies may supplement the clause at 52.244-6 only as
necessary to reflect agency unique statutes applicable to the
acquisition of commercial items.
44.403 Contract clause.
The contracting officer shall insert the clause at 52.244-6,
Subcontracts for Commercial Items and Commercial Components, in
solicitations and contracts for supplies or services other than
commercial items.
PART 46--QUALITY ASSURANCE
58. Section 46.101 is amended by adding in alphabetical order the
definition ``Commercial item'' to read as follows:
46.101 Definitions.
* * * * *
Commercial item (see 2.101).
* * * * *
59. Section 46.102 is amended in paragraph (e) by removing ``and'';
by redesignating paragraph (f) as (g) and adding a new paragraph (f) to
read as follows:
46.102 Policy.
* * * * *
(f) Contracts for commercial items shall rely on a contractor's
existing quality assurance system as a substitute for compliance with
Government inspection and testing before tender for acceptance unless
customary market practices for the commercial item being acquired
permit in-process inspection (Section 8002 of Public Law 103-355). Any
in-process inspection by the Government shall be conducted in a manner
consistent with commercial practice; and
* * * * *
46.202 [Amended]
60. Section 46.202 is amended by removing ``three'' and inserting
``four''.
61. Sections 46.202-1 through 46.202-3 are redesignated as 46.202-2
through 46.202-4 and a new 46.202-1 is added to read as follows:
46.202-1 Contracts for commercial items.
When acquiring commercial items (see part 12), the Government shall
rely on contractors' existing quality assurance systems as a substitute
for Government inspection and testing before tender for acceptance
unless customary market practices for the commercial item being
acquired include in-process inspection. Any in-process inspection by
the Government shall be conducted in a manner consistent with
commercial practice.
46.202-2 [Amended]
62. Newly redesignated section 46.202-2 is amended in paragraph
(b)(1) by removing ``(see 46.204 and Table 46-1)''.
46.202-4 [Amended]
63. Newly redesignated section 46.202-4 is amended in paragraph
(a)(1) by removing ``(see 46.204 and Table 46-1)''.
64. Section 46.203 is amended by revising paragraph (a)(1); at the
end of paragraph (a)(2) by removing ``;or'' and inserting a period; and
by removing paragraph (a)(3). The revised text reads as follows:
46.203 Criteria for use of contract quality requirements.
* * * * *
[[Page 48250]]
(a) * * *
(1) Commercial (described in commercial catalogs, drawings, or
industrial standards; see part 2); or
* * * * *
46.204 [Removed and reserved]
65. Section 46.204 and Table 46-1 are removed.
46.301 [Amended]
66. Section 46.301 is amended by removing ``46.202-1(b)'' and
inserting ``46.202-2(b)'' in its place.
46.311 and 46.402 [Amended]
67. Sections 46.311 and 46.402(e) are amended by removing ``46.202-
3'' and inserting ``46.202-4'' in their place.
46.404 [Amended]
68. Section 46.404 is amended at the end of paragraph (a) by
removing ``46.202-1'' and inserting ``46.202-2'' in its place; in
paragraph (b) introductory text by removing ``46.202-1(b)'' and
inserting ``46.202-2(b)'' in its place; and in paragraph (b)(2) by
removing the last sentence.
69. Section 46.709 is revised to read as follows:
46.709 Warranties of commercial items.
The contracting officer should take advantage of commercial
warranties, including extended warranties, where appropriate and in the
Government's best interests, offered by the contractor for the repair
and replacement of commercial items (see part 12).
70. Section 46.710 is amended by revising the first sentence of the
introductory paragraph; by removing paragraphs (a)(2) and (b)(2) and
redesignating paragraphs (a)(3) through (a)(6) as (a)(2) through
(a)(5), and paragraphs (b)(3) through (b)(5) as (b)(2) through (b)(4),
respectively. The revised text reads as follows:
46.710 Contract clauses.
The clauses and alternates prescribed in this section may be used
in solicitations and contracts in which inclusion of a warranty is
appropriate (see 46.709 for warranties for commercial items). * * *
* * * * *
PART 47--TRANSPORTATION
71. Section 47.405 is amended by revising the last sentence to read
as follows:
47.405 Contract clause.
* * * This clause does not apply to contracts awarded using the
simplified acquisition procedures in part 13 or contracts for
commercial items (see part 12).
72. Section 47.504 is amended by adding paragraph (e) to read as
follows:
47.504 Exceptions.
* * * * *
(e) Beginning May 1, 1996, subcontracts for the acquisition of
commercial items or commercial components (see 12.504(a)(13)). This
exception does not apply to grants-in-aid shipments, such as
agricultural and food-aid shipments, to shipments covered under Export-
Import Bank loans or guarantees, and to subcontracts under Government
contracts or agreements for ocean transportation services.
PART 49--TERMINATION OF CONTRACTS
49.402-7 [Amended]
73. Section 49.402-7 is amended in the last sentence of paragraph
(a) by removing ``52.212-4'' and inserting ``52.211-11'' in its place.
74. Section 49.501 is revised to read as follows:
49.501 General.
This subpart prescribes the principal contract termination clauses.
For contracts for the acquisition of commercial items, this part
provides administrative guidance which may be followed when it is
consistent with the requirements and procedures in the clause at
52.212-4, Contract Terms and Conditions--Commercial Items. In
appropriate cases, agencies may authorize the use of special purpose
clauses, if consistent with this chapter.
49.607 [Amended]
75. Section 49.607 is amended by removing from the introductory
text ``12.5'' and inserting ``42.13''.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
76. Section 52.202-1 is amended by revising the date of the clause;
by redesignating paragraphs (b) and (c) as (f) and (g), and adding new
paragraphs (b), (c), (d), and (e) to read as follows:
52.202-1 Definitions.
* * * * *
Definitions (Oct. 1995)
* * * * *
(b) Commercial component means any component that is a
commercial item.
(c) Commercial item means--
(1) Any item, other than real property, that is of a type
customarily used for nongovernmental purposes and that--
(i) Has been sold, leased, or licensed to the general public; or
(ii) Has been offered for sale, lease, or license to the general
public;
(2) Any item that evolved from an item described in paragraph
(c)(1) of this clause through advances in technology or performance
and that is not yet available in the commercial marketplace, but
will be available in the commercial marketplace in time to satisfy
the delivery requirements under a Government solicitation;
(3) Any item that would satisfy a criterion expressed in
paragraphs (c)(1) or (c)(2) of this clause, but for--
(i) Modifications of a type customarily available in the
commercial marketplace; or
(ii) Minor modifications of a type not customarily available in
the commercial marketplace made to meet Federal Government
requirements. ``Minor'' modifications means modifications that do
not significantly alter the nongovernmental function or essential
physical characteristics of an item or component, or change the
purpose of a process. Factors to be considered in determining
whether a modification is minor include the value and size of the
modification and the comparative value and size of the final
product. Dollar values and percentages may be used as guideposts,
but are not conclusive evidence that a modification is minor;
(4) Any combination of items meeting the requirements of
paragraphs (c)(1), (2), (3), or (5) of this clause that are of a
type customarily combined and sold in combination to the general
public;
(5) Installation services, maintenance services, repair
services, training services, and other services if such services are
procured for support of an item referred to in paragraphs (c)(1),
(2), (3), or (4) of this clause, and if the source of such
services--
(i) Offers such services to the general public and the Federal
Government contemporaneously and under similar terms and conditions;
and
(ii) Offers to use the same work force for providing the Federal
Government with such services as the source uses for providing such
services to the general public;
(6) Services of a type offered and sold competitively in
substantial quantities in the commercial marketplace based on
established catalog or market prices for specific tasks performed
under standard commercial terms and conditions. This does not
include services that are sold based on hourly rates without an
established catalog or market price for a specific service
performed;
(7) Any item, combination of items, or service referred to in
subparagraphs (c)(1) through (c)(6), notwithstanding the fact that
the item, combination of items, or service is transferred between or
among separate divisions, subsidiaries, or affiliates of a
Contractor; or
(8) A nondevelopmental item, if the procuring agency determines
the item was developed exclusively at private expense and sold in
substantial quantities, on a competitive basis, to multiple State
and local Governments.
(d) Component means any item supplied to the Federal Government
as part of an end item or of another component.
(e) Nondevelopmental item means--
(1) Any previously developed item of supply used exclusively for
governmental
[[Page 48251]]
purposes by a Federal agency, a State or local government, or a foreign
government with which the United States has a mutual defense
cooperation agreement;
(2) Any item described in paragraph (e)(1) of this definition
that requires only minor modification or modifications of a type
customarily available in the commercial marketplace in order to meet
the requirements of the procuring department or agency; or
(3) Any item of supply being produced that does not meet the
requirements of paragraph (e)(1) or (e)(2) solely because the item
is not yet in use.
* * * * *
(End of clause)
52.203-4 [Amended]
77. Section 52.203-4 is amended in the first sentence of the
introductory text by removing ``(b)(5)'' and inserting ``(b)(6)'' in
its place.
78. Section 52.203-6 is amended by revising the date of the clause
and adding an Alternate I following paragraph (c) to read as follows:
52.203-6 Restrictions on Subcontractor Sales to the Government.
Restrictions on Subcontractor Sales to the Government (Oct. 1995)
* * * * *
Alternate I (OCT. 1995). As prescribed in 3.503-2, substitute
the following paragraph in place of paragraph (b) of the basic
clause:
(b) The prohibition in paragraph (a) of this clause does not
preclude the Contractor from asserting rights that are otherwise
authorized by law or regulation. For acquisitions of commercial
items, the prohibition in paragraph (a) applies only to the extent
that any agreement restricting sales by subcontractors results in
the Federal Government being treated differently from any other
prospective purchaser for the sale of the commercial item(s).
52.210-1 through 52.210-7 [Redesignated]
79. Sections 52.210-1 through 52.210-7 are redesignated as 52.211-1
through 52.211-7.
52.212-1 through 52.212-11 [Redesignated]
80. Sections 52.212-1 through 52.212-11 are redesignated as 52.211-
8 through 52.211-18.
52.212-12 through 52.212-15 [Redesignated]
81. Sections 52.212-12 through 52.212-15 are redesignated as
52.242-14 through 52.242-17, respectively.
52.212-1 through 52.212-5 [Added]
82. Part 52 is amended by adding new sections 52.212-1 through
52.212-5 to read as follows:
Sec.
52.212-1 Instructions to Offerors-Commercial Items.
52.212-2 Evaluation-Commercial Items.
52.212-3 Offeror Representations and Certifications-Commercial
Items.
52.212-4 Contract Terms and Conditions-Commercial Items.
52.212-5 Contract Terms and Conditions Required to Implement
Statutes or Executive Orders-Commercial Items.
52.212-1 Instructions to Offerors--Commercial Items.
As prescribed in 12.301(b)(1), insert the following provision:
Instructions to Offerors--Commercial Items (Oct. 1995)
(a) Standard industrial classification (SIC) code and small
business size standard. The SIC code and small business size
standard for this acquisition appear in Block 10 of the solicitation
cover sheet (SF 1449). However, the small business size standard for
a concern which submits an offer in its own name, but which proposes
to furnish an item which it did not itself manufacture, is 500
employees.
(b) Submission of offers. Submit signed and dated offers to the
office specified in this solicitation at or before the exact time
specified in this solicitation. Offers may be submitted on the SF
1449, letterhead stationery, or as otherwise specified in the
solicitation. As a minimum, offers must show----
(1) The solicitation number;
(2) The time specified in the solicitation for receipt of
offers;
(3) The name, address, and telephone number of the offeror;
(4) A technical description of the items being offered in
sufficient detail to evaluate compliance with the requirements in
the solicitation. This may include product literature, or other
documents, if necessary;
(5) Terms of any express warranty;
(6) Price and any discount terms;
(7) ``Remit to'' address, if different than mailing address;
(8) A completed copy of the representations and certifications
at FAR 52.212-3;
(9) Acknowledgment of Solicitation Amendments;
(10) Past performance information, when included as an
evaluation factor, to include recent and relevant contracts for the
same or similar items and other references (including contract
numbers, points of contact with telephone numbers and other relevant
information); and
(11) If the offer is not submitted on the SF 1449, include a
statement specifying the extent of agreement with all terms,
conditions, and provisions included in the solicitation. Offers that
fail to furnish required representations or information, or reject
the terms and conditions of the solicitation may be excluded from
consideration.
(c) Period for acceptance of offers. The offeror agrees to hold
the prices in its offer firm for 30 calendar days from the date
specified for receipt of offers, unless another time period is
specified in an addendum to the solicitation.
(d) Product samples. When required by the solicitation, product
samples shall be submitted at or prior to the time specified for
receipt of offers. Unless otherwise specified in this solicitation,
these samples shall be submitted at no expense to the Government,
and returned at the sender's request and expense, unless they are
destroyed during preaward testing.
(e) Multiple offers. Offerors are encouraged to submit multiple
offers presenting alternative terms and conditions or commercial
items for satisfying the requirements of this solicitation. Each
offer submitted will be evaluated separately.
(f) Late offers. Offers or modifications of offers received at
the address specified for the receipt of offers after the exact time
specified for receipt of offers will not be considered.
(g) Contract award (not applicable to Invitation for Bids). The
Government intends to evaluate offers and award a contract without
discussions with offerors. Therefore, the offeror's initial offer
should contain the offeror's best terms from a price and technical
standpoint. However, the Government reserves the right to conduct
discussions if later determined by the Contracting Officer to be
necessary. The Government may reject any or all offers if such
action is in the public interest; accept other than the lowest
offer; and waive informalities and minor irregularities in offers
received.
(h) Multiple awards. The Government may accept any item or group
of items of an offer, unless the offeror qualifies the offer by
specific limitations. Unless otherwise provided in the Schedule,
offers may not be submitted for quantities less than those
specified. The Government reserves the right to make an award on any
item for a quantity less than the quantity offered, at the unit
prices offered, unless the offeror specifies otherwise in the offer.
(i) Availability of requirements documents cited in the
solicitation. (1) The Index of Federal Specifications, Standards and
Commercial Item Descriptions and the documents listed in it may be
obtained from the General Services Administration, Federal Supply
Service Bureau, Specifications Section, Suite 8100, 470 L'Enfant
Plaza, SW., Washington, DC 20407 ((202) 755-0325/0326).
(2) The DOD Index of Specifications and Standards (DODISS) and
documents listed in it may be obtained from the Standardization
Documents Desk, Building 4D, 700 Robbins Avenue, Philadelphia, PA
19111-5094 (telephone (215) 697-2569).
(i) Automatic distribution may be obtained on a subscription
basis.
(ii) Individual documents may be ordered from the Telespecs
ordering system by touch-tone telephone. A customer number is
required to use this service and can be obtained from the
Standardization Documents Order Desk or the Special Assistance Desk
(telephone (610) 607-2667/2179).
(3) Nongovernment (voluntary) standards must be obtained from
the organization responsible for their preparation, publication or
maintenance.
(End of provision)
[[Page 48252]]
52.212-2 Evaluation--Commercial Items.
As prescribed in 12.301(c), the Contracting Officer may insert a
provision substantially as follows:
Evaluation--Commercial Items (Oct. 1995)
(a) The Government will award a contract resulting from this
solicitation to the responsible offeror whose offer conforming to
the solicitation will be most advantageous to the Government, price
and other factors considered. The following factors shall be used to
evaluate offers:
----------------------------------------------------------------------
----------------------------------------------------------------------
(Contracting Officer shall insert the significant evaluation
factors, such as (i) technical capability of the item offered to
meet the Government requirement; (ii) price; (iii) past performance
(see FAR 15.605) and include them in the relative order of
importance of the evaluation factors, such as in descending order of
importance.)
Technical and past performance, when combined, are ------------
-------- (Contracting Officer state, in accordance with FAR 15.605,
the relative importance of all other evaluation factors, when
combined, when compared to price.)
(b) Options. The Government will evaluate offers for award
purposes by adding the total price for all options to the total
price for the basic requirement. The Government may determine that
an offer is unacceptable if the option prices are significantly
unbalanced. Evaluation of options shall not obligate the Government
to exercise the option(s).
(c) A written notice of award or acceptance of an offer, mailed
or otherwise furnished to the successful offeror within the time for
acceptance specified in the offer, shall result in a binding
contract without further action by either party. Before the offer's
specified expiration time, the Government may accept an offer (or
part of an offer), whether or not there are negotiations after its
receipt, unless a written notice of withdrawal is received before
award.
(End of Provision)
52.212-3 Offeror Representations and Certifications Commercial Items.
As prescribed in 12.301(b)(2), insert the following provision:
Offeror Representations and Certifications--Commercial Items (Oct.
1995)
(a) Definitions. As used in this provision:
Emerging small business means a small business concern whose
size is no greater than 50 percent of the numerical size standard
for the standard industrial classification code designated.
Small business concern means a concern, including its
affiliates, that is independently owned and operated, not dominant
in the field of operation in which it is bidding on Government
contracts, and qualified as a small business under the criteria in
13 CFR Part 121 and size standards in this solicitation.
Small disadvantaged business concern means a small business
concern that--
(1) Is at least 51 percent unconditionally owned by one or more
individuals who are both socially and economically disadvantaged, or
a publicly owned business, having at least 51 percent of its stock
unconditionally owned by one or more socially and economically
disadvantaged individuals, and
(2) Has its management and daily business controlled by one or
more such individuals. This term also means a small business concern
that is at least 51 percent unconditionally owned by an economically
disadvantaged Indian tribe or Native Hawaiian organization, or a
publicly owned business having at least 51 percent of its stock
unconditionally owned by one or more of these entities, which has
its management and daily business controlled by members of an
economically disadvantaged Indian tribe or Native Hawaiian
organization and which meets the requirements of 13 CFR Part 124.
Women-owned small business concern means a small business
concern--
(a) Which is at least 51 percent owned by one or more women or,
in the case of any publicly owned business, at least 51 percent of
the stock of which is owned by one or more women; and
(b) Whose management and daily business operations are
controlled by one or more women.
Women-owned business concern means a concern which is at least
51 percent owned by one or more women; or in the case of any
publicly owned business, at least 51 percent of the stock of which
is owned by one or more women; and whose management and daily
business operations are controlled by one or more women.
(b) Taxpayer identification number (TIN) (26 U.S.C. 6050M). (1)
Taxpayer Identification Number (TIN).
{time} TIN: ________________.
{time} TIN has been applied for.
{time} TIN is not required because:
{time} Offeror is a nonresident alien, foreign corporation, or
foreign partnership that does not have income effectively connected
with the conduct of a trade or business in the U.S. and does not
have an office or place of business or a fiscal paying agent in the
U.S.;
{time} Offeror is an agency or instrumentality of a foreign
government;
{time} Offeror is an agency or instrumentality of a Federal,
state, or local government;
{time} Other. State basis. ________________
(2) Corporate Status.
{time} Corporation providing medical and health care services,
or engaged in the billing and collecting of payments for such
services;
{time} Other corporate entity;
{time} Not a corporate entity:
{time} Sole proprietorship
{time} Partnership
{time} Hospital or extended care facility described in 26 CFR
501(c)(3) that is exempt from taxation under 26 CFR 501(a).
(3) Common Parent.
{time} Offeror is not owned or controlled by a common parent.
Name and TIN of common parent:
Name-------------------------------------------------------------------
TIN--------------------------------------------------------------------
(c) Offerors must complete the following representations when
the resulting contract is to be performed inside the United States,
its territories or possessions, Puerto Rico, the Trust Territory of
the Pacific Islands, or the District of Columbia. Check all that
apply.
(1) Small business concern. The offeror represents as part of
its offer that it {time} is, {time} is not a small business
concern.
(2) Small disadvantaged business concern. The offeror represents
and certifies that it {time} is, {time} is not a small
disadvantaged business concern.
(3) Women-owned small business concern. The offeror represents
that it {time} is, {time} is not a women-owned small business
concern.
Note: Complete paragraphs (c)(4) and (c)(5) only if this
solicitation is expected to exceed the simplified acquisition
threshold.
(4) Women-owned business concern. The offeror represents that it
{time} is, {time} is not, a women-owned business concern.
(5) Tie bid priority for labor surplus area concerns. If this is
an invitation for bid, small business offerors may identify the
labor surplus areas in which costs to be incurred on account of
manufacturing or production (by offeror or first-tier
subcontractors) amount to more than 50 percent of the contract
price:
----------------------------------------------------------------------
(6) Small Business Size for the Small Business Competitiveness
Demonstration Program and for the Targeted Industry Categories under
the Small Business Competitiveness Demonstration Program. [Complete
only if the offeror has certified itself to be a small business
concern under the size standards for this solicitation.]
(i) (Complete only for solicitations indicated in an addendum as
being set-aside for emerging small businesses in one of the four
designated industry groups (DIGs).) The offeror represents as part
of its offer that it {time} is, {time} is not an emerging small
business.
(ii) (Complete only for solicitations indicated in an addendum
as being for one of the targeted industry categories (TICs) or four
designated industry groups (DIGs).) Offeror represents and certifies
as follows:
(A) Offeror's number of employees for the past 12 months (check
the Employees column if size standard stated in the solicitation is
expressed in terms of number of employees); or
(B) Offeror's average annual gross revenue for the last 3 fiscal
years (check the Average Annual Gross Number of Revenues column if
size standard stated in the solicitation is expressed in terms of
annual receipts)
(Check one of the following):
Average Annual Gross
Number of Employees Revenues
____ 50 or fewer ____ $1
million or less
____ 51-100 ____
$1,000,001-$2 million
[[Page 48253]]
____ 101-250 ____
$2,000,001-$3.5 million
____ 251-500 ____
$3,500,001-$5 million
____ 501-750 ____
$5,000,001-$10 million
____ 751-1,000 ____
$10,000,001-$17 million
____ Over 1,000 ____
Over $17 million
(d) Certifications and representations required to implement
provisions of Executive Order 11246--
(1) Certification of non-segregated facilities. (Applies only if
the contract amount is expected to exceed $10,000)--
By submission of this offer, the offeror certifies that it does
not and will not maintain or provide for its employees, any
facilities that are segregated on the basis of race, color,
religion, or national origin because of habit, local custom, or
otherwise and that it does not and will not permit its employees to
perform their services at any location where segregated facilities
are maintained. The offeror agrees that a breach of this
certification is a violation of the Equal Opportunity clause in the
contract.
(2) Previous Contracts and Compliance. The offeror represents
that--
(i) It {time} has, {time} has not, participated in a previous
contract or subcontract subject either to the Equal Opportunity
clause of this solicitation, the clause originally contained in
Section 310 of Executive Order 10925, or the clause contained in
Section 201 of Executive Order 11114; and
(ii) It {time} has, {time} has not, filed all required
compliance reports.
(3) Affirmative Action Compliance. The offeror represents that--
(i) It {time} has developed and has on file, {time} has not
developed and does not have on file, at each establishment,
affirmative action programs required by rules and regulations of the
Secretary of Labor (41 CFR Subparts 60-1 and 60-2), or
(ii) It {time} has not previously had contracts subject to the
written affirmative action programs requirement of the rules and
regulations of the Secretary of Labor.
(e) Certification Regarding Payments to Influence Federal
Transactions (31 U.S.C. 1352). (Applies only if the contract is
expected to exceed $100,000.) By submission of its offer, the
offeror certifies to the best of its knowledge and belief that no
Federal appropriated funds have been paid or will be paid to any
person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee
of Congress or an employee of a Member of Congress on his or her
behalf in connection with the award of any resultant contract.
(f) Buy American Act--Trade Agreements--Balance of Payments
Program Certificate. (Applies only if FAR clause 52.225-9, Buy
American Act--Trade Agreement--Balance of Payments Program, is
included in this solicitation.)
(1) The offeror hereby certifies that each end product, except
those listed in paragraph (f)(2) of this provision, is a domestic
end product (as defined in the clause entitled ``Buy American Act--
Trade Agreements Balance of Payments Program'') and that components
of unknown origin have been considered to have been mined, produced,
or manufactured outside the United States, a designated country, a
North American Free Trade Agreement (NAFTA) country, or a Caribbean
Basin country, as defined in section 25.401 of the Federal
Acquisition Regulation.
(2) Excluded End Products:
Line item No. Country of origin
__________......................... __________
__________......................... __________
(List as necessary)
(3) Offers will be evaluated by giving certain preferences to
domestic end products, designated country end products, NAFTA
country end products, and Caribbean Basin country end products over
other end products. In order to obtain these preferences in the
evaluation of each excluded end product listed in paragraph (f)(2)
of this provision, offerors must identify and certify below those
excluded end products that are designated or NAFTA country end
products, or Caribbean Basin country end products. Products that are
not identified and certified below will not be deemed designated
country end products, NAFTA country end products, or Caribbean Basin
country end products. Offerors must certify by inserting the
applicable line item numbers in the following:
(i) The offeror certifies that the following supplies qualify as
``designated or NAFTA country end products'' as those terms are
defined in the clause entitled ``Buy American Act--Trade
Agreements--Balance of Payments Program:''
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(Insert line item numbers)
(ii) The offeror certifies that the following supplies qualify
as ``Caribbean Basin country end products'' as that term is defined
in the clause entitled ``Buy American Act--Trade Agreements--Balance
of Payments Program'':
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(Insert line item numbers)
(4) Offers will be evaluated in accordance with FAR Part 25.
(g) Buy American Act--North American Free Trade Agreement
(NAFTA) Implementation Act--Balance of Payments Program Certificate.
(Applies only if FAR clause 52.22521, Buy American Act--North
American Free Trade Agreement (NAFTA) Implementation Act--Balance of
Payments Program, is included in this solicitation.)
(1) The offeror hereby certifies that each end product, except
those listed in paragraph (g)(2) of this provision, is a domestic
end product (as defined in the clause entitled ``Buy American Act--
North American Free Trade Agreement (NAFTA) Implementation Act-
Balance of Payments Program'' and that components of unknown origin
have been considered to have been mined, produced, or manufactured
outside the United States.
(2) Excluded End Products:
Line item No. Country of origin
__________......................... __________
__________......................... __________
(List as necessary )
(3) Offers will be evaluated by giving certain preferences to
domestic end products or NAFTA country end products over other end
products. In order to obtain these preferences in the evaluation of
each excluded end product listed in paragraph (g)(2) of this
provision, offerors must identify and certify below those excluded
end products that are NAFTA country end products. Products that are
not identified and certified below will not be deemed NAFTA country
end products. Offerors must certify by inserting the applicable line
item numbers in the following:
The offeror certifies that the following supplies qualify as
``NAFTA country end products'' as that term is defined in the clause
entitled ``Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program:''
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(Insert line item numbers)
(4) Offers will be evaluated in accordance with FAR Part 25.
(h) Certification Regarding Debarment, Suspension or
Ineligibility for Award (Executive Order 12549). The offeror
certifies, to the best of its knowledge and belief, that--
(1) The offeror and/or any of its principals {time} are,
{time} are not presently debarred, suspended, proposed for
debarment, or declared ineligible for the award of contracts by any
Federal agency, and
(2) {time} Have, {time} have not, within a three-year period
preceding this offer, been convicted of or had a civil judgment
rendered against them for: commission of fraud or a criminal offense
in connection with obtaining, attempting to obtain, or performing a
Federal, state or local government contract or subcontract;
violation of Federal or state antitrust statutes relating to the
submission of offers; or commission of embezzlement, theft, forgery,
bribery, falsification or destruction of records, making false
statements, or receiving
[[Page 48254]]
stolen property; and {time} are, {time} are not presently indicted
for, or otherwise criminally or civilly charged by a Government
entity with, commission of any of these offenses.
(i) Procurement Integrity Certification (41 U.S.C. 423).
(Applies only if the contract is expected to exceed $100,000.)
I, the undersigned, am the officer or employee responsible for
the preparation of this offer. I certify, to the best of my
knowledge and belief, that either--
{time} I have no information, or
{time} I have disclosed information to the Contracting Officer
concerning a violation or possible violation of subsection (a), (b),
(d) or (f) of 41 U.S.C. 423, Procurement Integrity, or its
implementing regulations that may have occurred during the conduct
of this procurement.
----------------------------------------------------------------------
Signature of the officer or employee responsible for the offer and
date.
(End of Provision)
52.212-4 Contract Terms and Conditions--Commercial Items.
As prescribed in 12.301(b)(3), insert the following clause:
Contract Terms and Conditions--Commercial Items (Oct 1995)
(a) Inspection/Acceptance. The Contractor shall only tender for
acceptance those items that conform to the requirements of this
contract. The Government reserves the right to inspect or test any
supplies or services that have been tendered for acceptance. The
Government may require repair or replacement of nonconforming
supplies or reperformance of nonconforming services at no increase
in contract price. The Government must exercise its postacceptance
rights (1) within a reasonable time after the defect was discovered
or should have been discovered; and (2) before any substantial
change occurs in the condition of the item, unless the change is due
to the defect in the item.
(b) Assignment. The Contractor or its assignee's rights to be
paid amounts due as a result of performance of this contract, may be
assigned to a bank, trust company, or other financing institution,
including any Federal lending agency in accordance with the
Assignment of Claims Act (31 U.S.C. 3727).
(c) Changes. Changes in the terms and conditions of this
contract may be made only by written agreement of the parties.
(d) Disputes. This contract is subject to the Contract Disputes
Act of 1978, as amended (41 U.S.C. 601-613). Failure of the parties
to this contract to reach agreement on any request for equitable
adjustment, claim, appeal or action arising under or relating to
this contract shall be a dispute to be resolved in accordance with
the clause at FAR 52.233-1, Disputes, which is incorporated herein
by reference. The Contractor shall proceed diligently with
performance of this contract, pending final resolution of any
dispute arising under the contract.
(e) Definitions. The clause at FAR 52.202-1, Definitions, is
incorporated herein by reference.
(f) Excusable delays. The Contractor shall be liable for default
unless nonperformance is caused by an occurrence beyond the
reasonable control of the Contractor and without its fault or
negligence such as, acts of God or the public enemy, acts of the
Government in either its sovereign or contractual capacity, fires,
floods, epidemics, quarantine restrictions, strikes, unusually
severe weather, and delays of common carriers. The Contractor shall
notify the Contracting Officer in writing as soon as it is
reasonably possible after the commencement of any excusable delay,
setting forth the full particulars in connection therewith, shall
remedy such occurrence with all reasonable dispatch, and shall
promptly give written notice to the Contracting Officer of the
cessation of such occurrence.
(g) Invoice. The Contractor shall submit an original invoice and
three copies (or electronic invoice, if authorized,) to the address
designated in the contract to receive invoices. An invoice must
include--
(1) Name and address of the Contractor;
(2) Invoice date;
(3) Contract number, contract line item number and, if
applicable, the order number;
(4) Description, quantity, unit of measure, unit price and
extended price of the items delivered;
(5) Shipping number and date of shipment including the bill of
lading number and weight of shipment if shipped on Government bill
of lading;
(6) Terms of any prompt payment discount offered;
(7) Name and address of official to whom payment is to be sent;
and
(8) Name, title, and phone number of person to be notified in
event of defective invoice.
Invoices will be handled in accordance with the Prompt Payment
Act (31 U.S.C. 3903) and Office of Management and Budget (OMB)
Circular A-125, Prompt Payment.
(h) Patent indemnity. The Contractor shall indemnify the
Government and its officers, employees and agents against liability,
including costs, for actual or alleged direct or contributory
infringement of, or inducement to infringe, any United States or
foreign patent, trademark or copyright, arising out of the
performance of this contract, provided the Contractor is reasonably
notified of such claims and proceedings.
(i) Payment. Payment shall be made for items accepted by the
Government that have been delivered to the delivery destinations set
forth in this contract. The Government will make payment in
accordance with the Prompt Payment Act (31 U.S.C. 3903) and Office
of Management and Budget (OMB) Circular A-125, Prompt Payment.
Payments under this contract may be made by the Government either by
check, electronic funds transfer, or the Automated Clearing House,
at the option of the Government.
In connection with any discount offered for early payment, time
shall be computed from the date of the invoice. For the purpose of
computing the discount earned, payment shall be considered to have
been made on the date which appears on the payment check or the date
on which an electronic funds transfer was made.
(j) Risk of loss. Unless the contract specifically provides
otherwise, risk of loss or damage to the supplies provided under
this contract shall remain with the Contractor until, and shall pass
to the Government upon:
(1) Delivery of the supplies to a carrier, if transportation is
f.o.b. origin; or
(2) Delivery of the supplies to the Government at the
destination specified in the contract, if transportation is f.o.b.
destination.
(k) Taxes. The contract price includes all applicable Federal,
State, and local taxes and duties.
(l) Termination for the Government's convenience. The Government
reserves the right to terminate this contract, or any part hereof,
for its sole convenience. In the event of such termination, the
Contractor shall immediately stop all work hereunder and shall
immediately cause any and all of its suppliers and subcontractors to
cease work. Subject to the terms of this contract, the Contractor
shall be paid a percentage of the contract price reflecting the
percentage of the work performed prior to the notice of termination,
plus reasonable charges the Contractor can demonstrate to the
satisfaction of the Government using its standard record keeping
system, have resulted from the termination. The Contractor shall not
be required to comply with the cost accounting standards or contract
cost principles for this purpose. This paragraph does not give the
Government any right to audit the Contractor's records. The
Contractor shall not be paid for any work performed or costs
incurred which reasonably could have been avoided.
(m) Termination for cause. The Government may terminate this
contract, or any part hereof, for cause in the event of any default
by the Contractor, or if the Contractor fails to comply with any
contract terms and conditions, or fails to provide the Government,
upon request, with adequate assurances of future performance. In the
event of termination for cause, the Government shall not be liable
to the Contractor for any amount for supplies or services not
accepted, and the Contractor shall be liable to the Government for
any and all rights and remedies provided by law. If it is determined
that the Government improperly terminated this contract for default,
such termination shall be deemed a termination for convenience.
(n) Title. Unless specified elsewhere in this contract, title to
items furnished under this contract shall pass to the Government
upon acceptance, regardless of when or where the Government takes
physical possession.
(o) Warranty. The Contractor warrants and implies that the items
delivered hereunder are merchantable and fit for use for the
particular purpose described in this contract.
(p) Limitation of liability. Except as otherwise provided by an
express or implied warranty, the Contractor will not be liable to
the Government for consequential damages resulting from any defect
or deficiencies in accepted items.
(q) Other compliances. The Contractor shall comply with all
applicable Federal, State and local laws, executive orders, rules
[[Page 48255]]
and regulations applicable to its performance under this contract.
(r) Compliance with laws unique to Government contracts. The
Contractor agrees to comply with 31 U.S.C. 1352 relating to
limitations on the use of appropriated funds to influence certain
Federal contracts; 18 U.S.C. 431 relating to officials not to
benefit; 40 U.S.C 327, et seq., Contract Work Hours and Safety
Standards Act; 41 U.S.C. 51-58, Anti-Kickback Act of 1986; 41 U.S.C.
251 related to whistle blower protections; and 49 U.S.C 40118, Fly
American.
(s) Order of precedence. Any inconsistencies in this
solicitation or contract shall be resolved by giving precedence in
the following order: (1) the schedule of supplies/services; (2) the
Assignments, Disputes, Payments, Invoice, Other Compliances, and
Compliance with Laws Unique to Government Contracts paragraphs of
this clause; (3) the clause at 52.212-5; (4) addenda to this
solicitation or contract, including any license agreements for
computer software; (5) solicitation provisions if this is a
solicitation; (6) other paragraphs of this clause; (7) the Standard
Form 1449; (8) other documents, exhibits, and attachments; and (9)
the specification.
(End of clause)
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
As prescribed in 12.301(b)(4), insert the following clause:
Contract Terms and Conditions Required to Implement Statutes or
Executive Orders--Commercial Items (Oct 1995)
(a) The Contractor agrees to comply with the following FAR
clauses, which are incorporated in this contract by reference, to
implement provisions of law or Executive orders applicable to
acquisitions of commercial items:
(1) 52.222-3, Convict Labor (E.O. 11755); and
(2) 52.233-3, Protest After Award (31 U.S.C 3553 and 40 U.S.C.
759).
(b) The Contractor agrees to comply with the FAR and FIRMR
clauses in this paragraph (b) which the contracting officer has
indicated as being incorporated in this contract by reference to
implement provisions of law or executive orders applicable to
acquisitions of commercial items or components:
(Contracting Officer shall check as appropriate.)
________ (1) 52.203-6, Restrictions on Subcontractor Sales to
the Government, with Alternate I (41 U.S.C. 253g and 10 U.S.C.
2402).
________ (2) 52.203-10, Price or Fee Adjustment for Illegal or
Improper Activity (41 U.S.C. 423).
________ (3) 52.219-8, Utilization of Small Business Concerns
and Small Disadvantaged Business Concerns (15 U.S.C. 637 (d) (2) and
(3));
________ (4) 52.219-9, Small, Small Disadvantaged and Women-
Owned Small Business Subcontracting Plan (15 U.S.C. 637 (d)(4));
________ (5) 52.219-14, Limitation on Subcontracting (15 U.S.C.
637(a)(14)).
________ (6) 52.222-26, Equal Opportunity (E.O. 11246).
________ (7) 52.222-35, Affirmative Action for Special Disabled
and Vietnam Era Veterans (38 U.S.C. 4212).
________ (8) 52.222-36, Affirmative Action for Handicapped
Workers (29 U.S.C. 793).
________ (9) 52.222-37, Employment Reports on Special Disabled
Veterans and Veterans of the Vietnam Era (38 U.S.C. 4212).
________ (10) 52.225-3, Buy American Act--Supplies (41 U.S.C.
10).
________ (11) 52.225-9, Buy American Act--Trade Agreements Act--
Balance of Payments Program (41 U.S.C. 10, 19 U.S.C. 2501-2582).
________ (12) 52.225-17, Buy American Act--Supplies Under
European Community Sanctions for End Products (E.O. 12849).
________ (13) 52.225-18, European Community Sanctions for End
Products (E.O. 12849).
________ (14) 52.225-19, European Community Sanctions for
Services (E.O. 12849).
________ (15) 52.225-21, Buy American Act--North American Free
Trade Agreement Implementation Act--Balance of Payments Program (41
U.S.C 10, Pub. L. 103-187).
________ (16) 52.247-64, Preference for Privately Owned U.S.-
Flag Commercial Vessels (46 U.S.C. 1241).
________ (17) 201-39.5202-3, Procurement Authority (FIRMR).
(This acquisition is being conducted under ______________
delegation of GSA's exclusive procurement authority for FIP
resources. The specific GSA DPA case number is ____________).
(c) The Contractor agrees to comply with the FAR clauses in this
paragraph (c), applicable to commercial services, which the
Contracting Officer has indicated as being incorporated in this
contract by reference to implement provisions of law or executive
orders applicable to acquisitions of commercial items or components:
(Contracting Officer check as appropriate.)
________ (1) 52.222-41, Service Contract Act of 1965, As amended
(41 U.S.C. 351, et seq.).
________ (2) 52.222-42, Statement of Equivalent Rates for
Federal Hires (29 U.S.C. 206 and 41 U.S.C. 351, et seq.).
________ (3) 52.222-43, Fair Labor Standards Act and Service
Contract Act--Price Adjustment (Multiple Year and Option Contracts)
(29 U.S.C. 206 and 41 U.S.C. 351, et seq.).
________ (4) 52.222-44, Fair Labor Standards Act and Service
Contract Act--Price Adjustment (29 U.S.C. 206 and 41 U.S.C. 351, et
seq.).
________ (5) 52.222-47, SCA Minimum Wages and Fringe Benefits
Applicable to Successor Contract Pursuant to Predecessor Contractor
Collective Bargaining Agreement (CBA) (41 U.S.C. 351, et seq.).
(d) Comptroller General Examination of Record. The Contractor
agrees to comply with the provisions of this paragraph (d) if this
contract was awarded using other than sealed bid, is in excess of
the simplified acquisition threshold, and does not contain the
clause at 52.215-2, Audit and Records--Negotiation.
(1) The Comptroller General of the United States, or an
authorized representative of the Comptroller General, shall have
access to and right to examine any of the Contractor's directly
pertinent records involving transactions related to this contract.
(2) The Contractor shall make available at its offices at all
reasonable times the records, materials, and other evidence for
examination, audit, or reproduction, until 3 years after final
payment under this contract or for any shorter period specified in
FAR Subpart 4.7, Contractor Records Retention, of the other clauses
of this contract. If this contract is completely or partially
terminated, the records relating to the work terminated shall be
made available for 3 years after any resulting final termination
settlement. Records relating to appeals under the disputes clause or
to litigation or the settlement of claims arising under or relating
to this contract shall be made available until such appeals,
litigation, or claims are finally resolved.
(3) As used in this clause, records include books, documents,
accounting procedures and practices, and other data, regardless of
type and regardless of form. This does not require the Contractor to
create or maintain any record that the Contractor does not maintain
in the ordinary course of business or pursuant to a provision of
law.
(e) Notwithstanding the requirements of the clauses in
paragraphs (a), (b), (c) or (d) of this clause, the Contractor is
not required to include any FAR clause, other than those listed
below (and as may be required by an addenda to this paragraph to
establish the reasonableness of prices under Part 15), in a
subcontract for commercial items or commercial components--
(1) 52.222-26, Equal Opportunity (E.O. 11246);
(2) 52.222-35, Affirmative Action for Special Disabled and
Vietnam Era Veterans (38 U.S.C. 2012(a)); and
(3) 52.222-36, Affirmative Action for Handicapped Workers (29
U.S.C. 793).
(4) 52.247-64, Preference for Privately Owned U.S.-Flagged
Commercial Vessels (46 U.S.C. 1241) (flow down not required for
subcontracts awarded beginning May 1, 1996).
(End of clause)
83. In the list of newly designated sections below, for each clause
or provision indicated in the left column, remove the reference listed
in the middle column and insert the reference listed in the right
column:
[[Page 48256]]
------------------------------------------------------------------------
Clause/provision Remove Insert
------------------------------------------------------------------------
52.211-1.................... 10.011(a) 11.203(a)
52.211-2.................... 10.011(b) 11.203(b)
52.211-3.................... 10.011(c) 11.203(c)
52.211-4.................... 10.011(d) 11.203(d)
52.211-5.................... 10.011(e) 11.203(e)
52.211-6.................... 10.011(f) 11.203(f)
52.211-7.................... 10.011(g) 11.203(g)
52.211-8.................... 12.104(a)(2) 11.404(a)(2)
52.211-9.................... 12.104(a)(3) 11.404(a)(3)
52.211-10................... 12.104(b) 11.404(b)
52.211-11................... 12.204(a) 11.504(a)
52.211-11................... 12.202 11.502(b)
52.211-12................... 12.202 11.502(b)
52.211-12................... 12.204(b) 11.504(b)
52.211-13................... 12.204(c) 11.504(c)
52.211-14................... 12.304(a) 11.604(a)
52.211-15................... 12.304(b) 11.604(b)
52.211-16................... 12.403(a) 11.703(a)
52.211-17................... 12.403(b) 11.703(b)
52.211-18................... 12.403(c) 11.703(c)
52.242-14................... 12.505(a) 42.1305(a)
52.242-15................... 12.505(b) 42.1305(b)
52.242-16................... 12.505(c) 42.1305(c)
52.242-17................... 12.505(d) 42.1305(d)
------------------------------------------------------------------------
84. Section 52.244-6 is added to read as follows:
52.244-6 Subcontracts for Commercial Items and Commercial Components.
As prescribed in 44.403, insert the following clause:
Subcontracts for Commercial Items and Commercial Components (Oct 1995)
(a) Definition.
Commercial item, as used in this clause, has the meaning
contained in the clause at 52.202-1, Definitions.
Subcontract, as used in this clause, includes a transfer of
commercial items between divisions, subsidiaries, or affiliates of
the Contractor or subcontractor at any tier.
(b) To the maximum extent practicable, the Contractor shall
incorporate, and require its subcontractors at all tiers to
incorporate, commercial items or nondevelopmental items as
components of items to be supplied under this contract.
(c) Notwithstanding any other clause of this contract, the
Contractor is not required to include any FAR provision or clause,
other than those listed below to the extent they are applicable and
as may be required to establish the reasonableness of prices under
Part 15, in a subcontract at any tier for commercial items or
commercial components:
(1) 52.222-26, Equal Opportunity (E.O. 11246);
(2) 52.222-35, Affirmative Action for Special Disabled and
Vietnam Era Veterans (38 U.S.C. 4212(a));
(3) 52.222-36, Affirmative Action for Handicapped Workers (29
U.S.C. 793); and
(4) 52.247-64, Preference for Privately Owned U.S.-Flagged
Commercial Vessels (46 U.S.C. 1241) (flow down not required for
subcontracts awarded beginning May 1, 1996).
(d) The Contractor shall include the terms of this clause,
including this paragraph (d), in subcontracts awarded under this
contract.
(End of clause)
52.246-11 [Amended]
85. & 86. Section 52.246-11 is amended in the introductory text by
removing ``46.202-3'' and inserting ``46.202-4'' in its place.
52.246-17 and 52.246-18 [Amended]
87. Sections 52.246-17 and 52.246-18 are amended by removing and
reserving Alternate I.
PART 53--FORMS
88. Section 53.212 is added to read as follows:
53.212 Acquisition of commercial items.
SF 1449 (OCT 1995), Solicitation/Contract/Order for Commercial
Items. SF 1449 is prescribed for use in solicitations and contracts for
commercial items. Agencies may prescribe additional detailed
instructions for use of the form.
89. Section 53.301-1449 is added to read as follows:
53.301-1449 (OCT 1995), Solicitation/Contract/Order for Commercial
Items
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[FR Doc. 95-22778 Filed 9-15-95; 8:45 am]
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