Overview
FAR Subpart 12.2 outlines the specific policies and procedures for acquiring commercial products and services. Its primary objective is to streamline the federal procurement process by mimicking the practices of the commercial marketplace, thereby encouraging broader competition and reducing administrative burdens for both the government and private sector.
Key Rules
- Market Research: Market research is mandatory and serves as the foundation for defining agency needs, developing solicitations, and determining the acquisition strategy.
- Description of Need: Agencies must describe requirements in terms of functions to be performed, performance requirements, or essential physical characteristics, rather than restrictive brand-name specifications.
- Contract Types: There is a strict preference for Firm-Fixed-Price (FFP) or Fixed-Price with Economic Price Adjustment (FP-EPA) contracts. Use of any other contract type, except for specific Time-and-Materials (T&M) or Labor-Hour (LH) exceptions, is prohibited. Cost-reimbursement contracts are strictly forbidden.
- Simplified Procedures: For commercial acquisitions exceeding the Simplified Acquisition Threshold (SAT) but not exceeding $9 million ($15 million for specific contingencies), agencies may use the simplified procedures authorized by FAR Subpart 13.5.
- Standard Form 1449: The use of SF 1449 is required for commercial solicitations and contracts exceeding the SAT, unless specific streamlined procedures are used.
- Technical Data & Software: The government generally only acquires the technical data and software license rights customarily provided to the general public.
- Quality Assurance: The government must rely on the contractor's existing commercial quality assurance systems and internal inspections rather than conducting unique government testing, unless in-process inspection is a customary market practice.
- Cost Accounting Standards (CAS): CAS generally does not apply to FFP or FP-EPA commercial contracts.
Responsibilities
- Contracting Officers (CO):
- Determine price reasonableness based on commercial factors (delivery, warranty, volume).
- Execute a Determination and Findings (D&F) if using T&M or LH contract types.
- Presume that commercial products were developed at private expense regarding technical data rights.
- Review and incorporate customary commercial practices into the solicitation when appropriate.
- Ensure End User License Agreements (EULAs) or Terms of Service (TOS) do not violate federal law (e.g., Anti-Deficiency Act).
- Requiring Activity / Program Managers:
- Conduct thorough market research to understand industry capabilities.
- Draft requirements documents that focus on performance and function rather than restrictive specifications.
- Ensure compliance with Information and Communication Technology (ICT) accessibility standards (Section 508) and Internet Protocol (IPv6) requirements.
- Offerors/Contractors:
- Provide existing product literature in lieu of unique, lengthy technical proposals when sufficient.
- Notify the CO of any overpayments or duplicate payments.
- Ensure commercial products/services conform to contract requirements using their own quality systems.
Practical Implications
- Speed to Market: This subpart allows for significantly reduced solicitation and response times (fewer than 15 days for notice and 30 days for response), enabling the government to move at "the speed of business."
- Reduced Barriers to Entry: By accepting commercial licenses and standard product literature, the government makes it easier for non-traditional defense contractors to bid on federal work without changing their business model.
- Risk Management: The prohibition of cost-reimbursement contracts shifts the performance risk to the contractor, while the "Unenforceability of Unauthorized Obligations" rule protects the government from "hidden" indemnification clauses in software EULAs that could lead to illegal spending.
- Simplified Large Buys: The ability to use simplified procedures for requirements up to $9 million provides COs with a powerful tool to bypass the more rigid requirements of FAR Part 15 (Negotiation) while still maintaining a competitive environment.