Overview
FAR 12.503 identifies specific federal statutes that are waived, partially exempted, or modified for Executive agency contracts involving the acquisition of commercial products and commercial services. The purpose of this section is to streamline the procurement process and reduce administrative burdens to more closely align government contracting with standard commercial marketplace practices.
Key Rules
- Complete Exemptions (Paragraph a): Several major laws are entirely inapplicable to commercial prime contracts, including the Drug-Free Workplace Act, the Walsh-Healey Public Contracts Act (for supplies exceeding $10,000), and requirements regarding minimum response times for offers.
- Partial Exemptions (Paragraph b): Specific administrative requirements, such as the mandate for certain certifications or clauses under the Anti-Kickback Act and the Contract Work Hours and Safety Standards statute, are removed for commercial acquisitions.
- Modified Applicability (Paragraph c): High-impact regulations are significantly restricted or altered for commercial items; notably, Truthful Cost or Pricing Data (formerly TINA) and Cost Accounting Standards (CAS) generally do not apply or are applied in a very limited capacity.
- Fly America Act Exception: While many requirements of the Fly America Act are waived, the statute remains applicable to the acquisition of commercial services under 49 U.S.C. 40118(g).
- Conflict of Interest: Policy requirements regarding personal conflicts of interest by contractor employees (41 U.S.C. 2303(b)) are waived for commercial acquisitions.
Practical Implications
- Reduced Compliance Burden: This section allows commercial companies to engage in federal contracting without having to implement the specialized accounting and reporting systems required by CAS or TINA, which are often barriers to entry for non-traditional contractors.
- Solicitation Drafting: Contracting Officers must be careful not to include "standard" government clauses in commercial solicitations if those clauses are derived from the laws exempted under this section, as doing so could lead to unnecessary costs or grounds for a bid protest.