by

William A. Shook

The enactment of the Federal Acquisition Streamlining Act of 1994, P.L. 103-355, (FASA), was the culmination of a decade long effort to streamline the manner in which the federal government purchases commercial products and services. Those changes, when properly implemented by federal agencies, serve to eliminate many of the extra costs and risks previously incurred by commercial companies when doing business with the government. The mandated changes, for the first time in forty years, allow commercial vendors to sell their products and services under terms and conditions similar to those used in the commercial marketplace for their products and services.

Benefits for the government include access to state of the art technology, lower life cycle costs, and increased competition and choices among vendors offering quality products and services with proven capabilities. Benefits for commercial vendors include lower transaction costs, the reduction or elimination of the need for a specialized sales and contracting workforce, and the reduction of risks previously associated with government unique terms and pricing strategies.

While implementation of the FASA reforms is still very much a work in progress, both at the government and prime contractor level, when implemented properly, the FASA changes are delivering on the promises made at enactment. Greater familiarity and understanding the new requirements and procedures by both industry and government can only serve to further improve the outlook for fundamental reform and the corresponding benefits. The following paper briefly describes the new contracting process for commercial items that is now mandated for any product or service that meets the definition of a "commercial item."

Although technically not part of the FASA changes, the FAR was amended at the specific direction of the now-former Administrator of the Office of Federal Procurement Policy, Dr. Steve Kelman, to provide encouragement of innovation in contracting procedures. This change in emphasis can have a dramatic impact on the contractual tools and procedures used by federal contracting agencies when contracting with commercial vendors.

Specifically, the basic premise for the FAR, including when commercial items are to be acquired, is that government members of the Government Acquisition Team should exercise "personal initiative and sound business judgment" when acquiring the needed products or service. Furthermore, and most importantly, those Government employees "may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority." Emphasis added; FAR 1.102(d).

This remarkable change in focus from--if it is not specifically provided for in the FAR, it cannot be done--to--if it is not prohibited, go ahead and do it-- allows the use of many commercial contracting procedures currently not used by the government. It is necessary, however, for companies to identify and suggest the use of procedures, including contract terms and conditions, that will benefit both the government and the company. Companies should examine their own commercial purchasing and sales procedures to determine if any practices can be adopted in their government contracting efforts.

An example of this type of procedure is the use of an escrow agreement when there is a need to both protect and obtain access to certain technical data. Many if not most commercial companies are unwilling to provide the government, prime contractors, or other customers access to confidential technical data out of fear of improper disclosure or use. At the same time, there is a certain reasonable unwillingness shared by both the government and prime contractors to rely on unique products and services that would create substantial problems should the commercial source of those products or services fail to provide support in future years.

A proven and acceptable method for resolving such a conflict--in certain instances--is the creation of an escrow account whereby the owner of the technical data agrees to place the technical data in a safety deposit box or some other secure, neutral location, and agrees to update the technical data as appropriate. The escrow agreement provides that the government (or prime contractor) shall have access to the technical data in certain specified circumstances, such as bankruptcy of the contractor or the contractor’s failure to continue support of the product or service. In those limited instances, the government may then use the technical data for whatever purposes had previously been negotiated--from unlimited rights to government purposes only.

This escrow agreement procedure is not mentioned anyplace in the FAR. Yet it has been successfully used in both the commercial and government marketplaces to resolve problems involving the need for technical data to limit future risk. It is the type of procurement practice that is contemplated when the FAR encourages initiative and makes the assertion that if a practice is not prohibited, it may be, and should be used in order to obtain the best possible results. The use of such procedures will often be dependent upon their suggestion for use by commercial companies and the negotiation of the specifics with the Government.

Part 12 of the FAR is a complete rewrite of what had been one of the shortest parts of the FAR, the now superseded FAR Part 11, Acquisition and Distribution of Commercial Products. It is the focal point for many of the principal changes in law brought about by FASA. It has been written so that government contracts for commercial items more closely resemble those used in the commercial marketplace.

Three mandatory requirements have been placed on federal agencies:

(1) The conduct of market research to determine whether commercial items or nondevelopmental items are available to meet agency requirements;

(2) The acquisition of available commercial items or nondevelopmental items

to meet agency requirements; and

(3) The mandated use, to the maximum extent practicable, of commercial items or nondevelopmental items as components, by prime contractors and subcontractors at all tiers, in noncommercial end items supplied to the government.

FAR 12.101. While federal agencies have been encouraged for many years to consider the acquisition of commercial items, FAR Part 12 now makes it mandatory for federal agencies to both conduct the market research and buy commercial items when available. In addition, the flow down of these requirements to prime contractors and subcontractors can result in offerors being evaluated on just how well they have incorporated the use of commercial items into their proposals.

The use of the procedures and contract clauses in FAR Part 12 is now mandatory whenever a federal agency is acquiring supplies or services that meet the definition of a commercial item. As stated in the notice in the Federal Register, the use of FAR Part 12 was discretionary for solicitations issued after October 1, 1995, and mandatory for all solicitations for commercial items issued after December 1, 1995. The mandatory applicability of FAR Part 12 to new solicitations means that many commercial vendors will continue to operate in both the pre-FASA and post-FASA contractual environment for a period of years. As a result, the true effect of many of the changes will be seen gradually as older solicitations and contracts come to an end. It should be noted, however, that the FAR actually encourages contracting officers to amend, without consideration, older contracts to implement the many changes resulting from FASA. FAR 43.102(c).

The policies and procedures of FAR Part 12 are to be used, when consistent and appropriate, with the policies and procedures for solicitation, evaluation, and award as provided for in:

o FAR Part 13, Simplified Acquisition Procedures;

o FAR Part 14, Sealed Bidding; and

o FAR Part 15, Contracting by Negotiation.

However, FAR Part 12 makes clear that whenever there is an inconsistency between FAR Part 12 and any other part of the FAR, the policies and procedures and FAR Part 12 shall take precedence. For example, notwithstanding the mandated use of certain contract clauses in FAR Parts 14 and 15, the clauses specified in the FAR Part 12 are to be used or if there is a question about use and delivery of technical data, the requirements of FAR Part 12 shall apply rather than those found in FAR Part 27.

Based on the concept that it was the intent of Congress to make truly small purchases very easy for federal agencies, FAR Part 12 does not apply to the acquisition of commercial items in the following circumstances:

o Purchases at or below the micro-purchase threshold (currently $2,500);

o Purchases using SF 44 (Purchase Order--Invoice--Voucher);

o Purchases made though the use of an imprest fund; and

o Purchases made with the Government commercial purchase (credit) card.

In order to help ensure that government solicitations and contracts for commercial items more closely resemble those used in the commercial marketplace, special requirements have been established when contracting for commercial items. Those special requirements are as follows:

Market research is described as an "essential element" that establishes the foundation for describing an agency’s needs. FAR 12.202(a). The actual description of an agency need is to be sufficiently detailed so that potential offerors know which products or services to offer. That description is to be described in terms of how the product or service is to be used, relying on functional, performance, and essential physical characteristics specifications so that offerors can propose the methods that will best meet the government’s needs.

The procedures in FAR Part 13, Simplified Acquisition Procedures (for acquisitions under $5,000,000), Part 14, Sealed Bidding, or Part 15, Contracting by Negotiation are to be used in conjunction with FAR Part 12 to establish the solicitation, evaluation, and award process. FAR 12.203. Contracting officers are also allowed to use the streamlined procedures of FAR Part 12.603 when soliciting commercial items.

The use of a new contract form, Standard Form 1449, Solicitation/Contract/Order for Commercial Items, is encouraged for solicitations as well as awards and placing of orders for commercial items. FAR 12.204. That form also contains the information necessary for documenting receipt, inspection, and acceptance of commercial items that, in effect, does away with the need for other specialized government forms previously used for such purposes, e.g. the DD 250.

For solicitations that require the submission of technical information in order for the government agency to conduct a competent evaluation, FAR Part 12 encourages government contracting officers to review, as part of the market research process, existing product literature that is generally available. FAR 12.205. When such literature is sufficient to meet government evaluation needs, contracting officers are encouraged to require only the submission of such literature and not separate technical proposals. This procedure will reduce the generally uncompensated extra costs often associated with submitting unique proposals to the government.

In addition, contracting officers are encouraged to allow offerors to propose more than one product that will meet the government’s needs, with each such proposal being treated and evaluated as a separate offer. This will help ensure that offerors are encouraged to propose alternative means of achieving desired government purposes in ways that had not previously been considered by the government.

In an effort to reduce the amount of time it takes to obtain necessary commercial items, for solicitations greater than the simplified acquisition threshold, contracting officers may allow for fewer than 30 days response time for receipt of bids or offers for commercial items. In making that decision, the contracting officer should consider the urgency and complexity of the solicitation as well as the availability of the commercial items being purchased.

The use of past performance data is considered an important element in the evaluation and award of commercial item contracts and is encouraged. FAR 12.206. Such data is to be collected and evaluated from sources both inside and outside of the government. Past performance evaluations can be part of the contractor responsibility determination as required by FAR 9.1, simplified acquisition procedures as set forth at FAR 13.106-1, and/or when contracting by negotiation as set forth at FAR 15.305. The collection and use of past performance information remains controversial within the government contracting arena. More and more agencies, are, however,

Only firm-fixed-price or firm-fixed-price contracts with economic price adjustment may be used (including firm-fixed-price indefinite delivery contracts) for commercial item acquisitions. FAR 12.207. This is a narrower range of contract types than set forth in FASA. The statutory language excluded cost reimbursable contracts. The regulations now apparently exclude most labor hour and time and material contracts that are often used with many services contracts both in the commercial and government marketplaces when such contracts are considered to be other than fixed price. However, the allowable use of indefinite delivery contracts does allow commercial services to be purchased by federal agencies at fixed rates on firm-fixed price contracts.

The government is required to rely on a contractor’s existing quality assurance system rather than on any form of government inspection or government inspection system unless standard commercial practice allows for in-process inspection. FAR 12.208. Generally, the only inspection that the government will undertake will be of the commercial item itself at time of acceptance. This change eliminates the need for commercial vendors to have a government-approved inspection or quality assurance system. At the same time, it increases the importance of the government using past performance criteria as an important evaluation criteria in order to avoid quality problems.

The procedures set forth at FAR 15.4 are to be followed for the pricing of commercial items. FAR 12.209. Generally, those procedures prohibit the collection of certified cost or pricing data, but rather rely on commercial pricing techniques including competition and comparative sales data for determining whether an offered price is "fair and reasonable."

The procedures set forth in FAR Part 32 are to be followed when customary commercial marketplace practices indicate that buyers provide some contract financing. FAR 12.210.

In an area that has generated an enormous amount of controversy during the past decade, FAR Part 12 treats technical data issues quite simply and effectively. FAR 12.211. Except where individual agency statutes have been enacted with differing requirements, the government acquires only that technical data and the rights in that technical data for a commercial item or process which are customarily provided to the public. Furthermore, it is now presumed that all commercial items were developed at private expense thereby eliminating the specific need for commercial vendors to maintain data that prove that only private funds were used to develop the data.

There are no specific contract clauses in FAR Part 12 that treat the delivery of technical data. The section requires the contracting officer to "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)." FAR 12.211. As a result, commercial vendors may see standard FAR technical data clauses that actually go beyond the rights customarily provided to commercial customers. In those instances, the vendors will need to negotiate terms that provide for the proper granting of rights.

The new FAR Part 12 substantially improves the contracting process for commercial computer software. FAR 12.212. Such software is now delivered to the government under the very same licenses provided to the general public. Where the rights in those commercial licenses are insufficient for the government’s needs or otherwise inconsistent with federal law, the vendor and the government may negotiate a separate license. Generally, offerors and contractors are not required to furnish technical information related to commercial computer software and documentation that is not also generally provided to the public. In other words, the government will license commercial computer software and documentation under the very same terms as the rest of the world.

The commercial license and any negotiated variation thereof is to be included as an addendum to the contract. This is particularly important given the order of precedence established by the new commercial items clause, FAR 52.212-4, Contract Terms and Conditions--Commercial Items. Subparagraph (s) of that clause provides that addenda to the contract are given precedence over certain paragraphs of FAR 52.212-4, including subparagraph (o), Warranty. That standard subparagraph includes the warranty of merchantability and fitness for a particular purpose, two warranties that are often disclaimed in commercial software licenses. By including the software license as an addenda, its terms are given precedence over the lower ranking standard government warranty clause.

Perhaps the most significant effect of this change is the elimination of the need to mark commercial computer software with the restricted rights notices previously required by FAR 27.404. A word of caution on this point--software delivered on solicitations and contracts issued prior to December 1, 1995, may still be delivered under the terms of the previous FAR provisions requiring the marking of software. Pursuant to those still applicable terms, any improperly marked software may be provided to the government with unlimited rights.

FAR Part 12 was written so that the terms and conditions stated therein will be applicable to a wide range of commercial items. FAR 12.213. However, contracting officers are encouraged, based on their market research, to include terms and conditions that are based on commercial practices and that will result in a contract that is satisfactory to both parties and not otherwise prohibited.

This subsection of FAR Part 12 provides broad discretion to enter into contracts with contract terms based on commercial practices. Little other guidance is given as to what commercial practices should be considered other than they are to be determined through market research. As a result, commercial vendors should consider suggesting clauses that are standard in their particular industry. At the same time, commercial vendors should carefully review any new clauses that are added to a solicitation based on a finding by the government of a "commercial practice," particularly in the area of most favored customer pricing, price reductions, and audit rights.

One of the more significant changes in FAR Part 12 is the limited use of standard government contract clauses and the change in the actual contract format which does not follow the Uniform Contract Format provided for at FAR Parts 14 and 15. Accordingly, to the "maximum extent practicable," contracts for commercial items are to include only those clauses:

In implementing this new statutory requirement, five new clauses have been drafted which contracting officers are to insert into solicitations and contracts for commercial items. The use of four of the clauses is mandatory. Furthermore, notwithstanding other prescriptions found elsewhere in the FAR regarding additional clauses, a contracting officer is required to insert only those clauses listed below.

This mandatory clause provides a very streamlined set of instructions for preparation and delivery of offers. It may be tailored by individual contracting officers after conducting market research and to adapt the clause to market conditions.

This discretionary clause provides a very simple format for listing evaluation factors, when appropriate. This clause is essentially a substitute for the evaluation section of solicitations, Section M, under the Uniform Contract Format. It may be tailored for individual use as needed.

This mandatory clause provides a consolidated list of offeror representations and certifications. It may not be tailored except where an official deviation from the FAR is obtained. This clause will reduce the time and paperwork associated with filling out standard government clauses as it becomes the standard certifications and representations package.

This mandatory clause provides a consolidated list of standard terms and conditions that are based on general commercial marketplace practices. It may be tailored by individual contracting officers after conducting market research when necessary to adapt the clause to market conditions. However, the subparagraphs on assignments, disputes, payment, invoice, other compliances, and compliance with laws unique to government contracts may not be tailored due to the fact they are based on statutory requirements.

This mandatory clause incorporates by reference into a commercial item contract a total of 23 FAR clauses, as applicable. This clause may not be tailored. It provides commercial vendors with a finite number of clauses and requirements that are applicable to commercial item contracts.

In addition to the five clauses listed above, there are three new clauses that may be added in certain commercial item contracts where pricing data may be required. Those clauses, discussed in detail below are:

In addition, the following new clause has been written that is required to be inserted into all solicitations and contracts for noncommercial items:

This clause requires prime contractors, to the maximum extent practicable, to incorporate at all tiers, commercial items and nondevelopmental items as components. In addition, the clause specifically states that notwithstanding any other provision of the FAR, only the following four clauses, along with the clauses on commercial pricing as necessary, are required to be inserted into subcontracts for commercial items or components:

The clause also has a requirement that it be included in all subcontracts at all tiers.

Other FAR clauses may be inserted into solicitations and contracts at the discretion of the contracting officer. However, the contracting officer may not include any clause that is inconsistent with customary commercial practice unless an agency waiver is obtained. That waiver, granted on an individual or class basis, must be supported with a description of the customary commercial practice, an explanation as to why a term or condition that is inconsistent with customary commercial practice is required, and a determination that the use of the customary commercial practice is inconsistent with the needs of the government.

Any tailoring that is done shall be added to the solicitation and contract by addenda, as noted at Block 26 of SF 1449.

The following is a more detailed review of the clauses.

There are 9 subparagraphs in this clause.

The SIC code and small business size standard is noted at Block 10 of SF 1449. However, this clause establishes that the small business size standard for an item not manufactured by the concern submitting the offer is 500 employees.

Offers must be submitted by the exact date and time specified in the solicitation and may be submitted on SF 1449, letterhead stationary, or as otherwise specified in the solicitation. As a minimum, the offeror must show:

Offers must be held open for 30 days [as opposed to the previous standard of 60 days] unless a different time period is specified in solicitation addenda.

d. Product samples

If required, product samples are to be submitted at or prior to the time specified for receipt of offers. Product samples are submitted and returned at offeror’s expense.

Multiple offers are encouraged with each such offer being evaluated separately.

Offers or modification of offers received after the time and date specified will not be considered.

Notice of intent to award without discussions while reserving the right to conduct discussions; that all offers may be rejected or that other than the lowest offer may be accepted; that informalities and minor irregularities may be waived.

Notice that the government may accept any item or group of items unless the offeror specifies otherwise; quantities less than specified may not be submitted unless otherwise specified in solicitation; Government reserves right to award for quantities smaller than those specified at unit prices offered unless offeror specifies otherwise in offer.

Notice of where to obtain specifications and standards.

2. 52.212-2, Evaluation–Commercial Items

There are 3 subparagraphs to this clause.

Notice that the government will award a contract to the responsible offeror whose conforming offer will be most advantageous to the government, price and other factors considered. The factors to be considered must be inserted by the government as well as the relationship of price to the non-price related factors. The clause suggests factors such as technical capability, price, and past performance.

Notice that evaluation will include all options and that significantly unbalanced offers may be deemed unacceptable. Evaluation of options does not obligate government to exercise those options.

Notice that written notice of award furnished to offeror within time specified will result in a binding contract without further action. Any withdrawal of the offer by the offeror must be done in writing before acceptance of the offer by the government.

3. 52.212-3, Offeror Representations and Certifications–Commercial Items

This clause has 9 subparagraphs.

Defines the terms "emerging small business," small business concern," "small disadvantaged business concern," "women-owned small business concern," and "women-owned business concern."

Requires disclosure of Taxpayer identification number, corporate status, and taxpayer identification number and name of any common parent.

Requires disclosure of number of employees and status as small business concern, small disadvantaged business concern, and women-owned small business concern. For solicitations in excess of the simplified acquisition threshold, the clause requires disclosure of status as a women-owned business concern and allows identification of labor surplus areas for performance. For solicitations that have been set-aside for emerging small businesses, the clause requires disclosure of status and size.

Requires certification as to: (1) non-segregated facilities; (2) filing of previous contracts and compliance reports required by Equal Opportunity clause; and (3) affirmative action compliance.

For contracts over $100,000, submission of offer certifies that no federal appropriated funds have been used to lobby in order to receive contract.

Requires certification that end products are domestic end products except for the products specifically listed by the offeror. Provides notice that offers will be evaluated according to certain preferences as established in FAR Part 25 and that offeror must certify as to status of end products as "designated or NAFTA country end products" or "Caribbean Basin country end products."

Requires certification that end products are domestic end products except for the products specifically listed by the offeror. Provides notice that offers will be evaluated according to certain preferences as established in FAR Part 25 and that offeror must certify as to status of end products as "designated or NAFTA country end products."

Requires certification as to: (1) debarment, suspended, proposed for debarment, or ineligibility for award status; (2) fraud conviction or civil judgment regarding various statutes and indictment status.

4. 52.212-4, Contract Terms and Conditions–Commercial Items

This clause has 19 subparagraphs. Subsection 12.401 of the FAR provides more detailed guidance regarding tailoring certain of the paragraphs of this clause to reflect customary commercial practices or to reflect special needs of the government.

Requires contractor to tender conforming items. Government reserves the rights to inspect and test at time of acceptance and can require repair or replacement of nonconforming items. Post acceptance rights must be exercised by the government within a reasonable time period and before any substantial change in the item.

This subparagraph is generally designed for inspection and acceptance of noncomplex commercial items. The contracting officer may include other inspection and acceptance procedures in a contract addendum when necessary for more complex commercial items or for commercial items to be used in critical applications.

Provides notice that rights to proceeds from contract may be assigned to a bona fide financing institution in accordance with the Assignment of Claims Act.

Provides that all changes in terms and conditions of the contract are to be on a bi-lateral, written basis.

Provides notice that the Contract Disputes Act applies and that FAR 52.233-1, Disputes, is incorporated by reference for the purpose of resolving disputes. Contract performance is to proceed while disputes are resolved.

Incorporates by reference the clause, FAR 52.202-1, Definitions.

Provides that contractor is liable for default for nonperformance unless nonperformance is caused beyond the control of the contractor. Requires prompt notice of excusable delays.

Requires submission of original and three copies of all invoices. Provides notice that payment will be made in accordance with the Prompt Payment Act. The invoices must include: (1) Name and address; (2) Invoice date; (3) Contract and line item number; (4) Description, quantity, unit of measure, unit price, and extended price of items delivered; (5) Shipping number and date; (6) Prompt payment discount terms if offered; (7) Name and address of official to whom payment is to be sent; and (8) Name, title, and telephone number of person to be notified if invoice is defective.

Requires indemnification by the contractor of the government of any patent, trademark or copyright infringement if reasonable notice is received by the contractor.

Provides notice that payment will be made for items delivered and that payment will be made in accordance with the Prompt Payment Act by check, electronic funds transfer, or the Automated Clearing House, at the government’s option.

Risk of loss remains with contractor until delivery of supplies to a carrier if f.o.b. origin or delivery to government specified location if f.o.b. destination.

Provides notice that contract price includes all applicable federal, state, and local taxes and duties.

Provides notice that the government may terminate the contract at any time for the government’s convenience and that the contractor, upon receipt of the notice, must stop work immediately. The contractor is to be paid a percentage of the contract price reflecting the percentage of work performed and any reasonable charges that can be proven using the contractor’s standard record keeping system that have resulted from the termination. The clause specifically states that the contractor is not required to comply with the Cost Accounting Standards or Cost Principles in proving costs nor does the clause create any audit rights on behalf of the government.

Subsection 12.403 of FAR Part 12 provides further guidance by making it clear that the termination procedures in FAR Part 49 do not apply and should be used for guidance only. Furthermore, the subsection suggests that a termination for convenience should occur only when it is in the best interests of the government. Termination settlements should be by mutual agreement so that there is a balance between the need for the contracting officer to obtain documentation for extra costs and an expeditious settlement.

Provides notice that the government may terminate the contract in the event of any default by the contractor, failure to comply with contract terms and conditions, or failure to give assurances of future performance. The government retains all rights and remedies provided by law.

The government’s preferred remedy, as provided for at FAR 12.403(c) is to obtain similar items and charge the defaulted contractor the excess costs of reprocurement. When terminating a contract for commercial items for cause, the contracting officer is required to send the contractor a written notice that provides, as a minimum, the following:

Title passes to the government upon acceptance, unless specified elsewhere in the contract.

Provides that items are merchantable and fit for a particular purpose described in the contract.

The implied warranty of mrechantability provides that an item is reasonably fit for the ordinary purposes for which it is to be used. The item must be of at least average quality and pass without objection in the trade or market for items of the same description.

The implied warranty of fitness for a particular purpose provides that an item is fit for the particular purpose for which the government will use the item. This warranty is effective only if the vendor knows the government’s particular purpose and the government relied upon the vendor’s skill and judgment that the item would be appropriate for that particular purpose.

In addition to these two warranties, contracting officers are required, to the maximum extent practicable, to take advantage of commercial warranties. Commercial warranties should be offered to the government on the same terms and conditions offered to the commercial marketplace, although the contracting officer may specify minimum warranty terms, such as minimum duration.

Contracting officers are cautioned to analyze commercial warranties to ensure that:

When commercial warranties exclude or limit the implied warranties of 52.212-4, the contracting officer is to ensure that the express warranty allows for repair or replacement of defective items.

Provides that contractor not responsible for consequential damages unless otherwise stated.

Requires compliance with all applicable federal, state, and local laws, executive orders, rules, and regulations.

Requires compliance with the following laws:

Establishes the order of precedence for resolving contract inconsistencies as follows:

5. 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders–Commercial Items

This clause has just 5 paragraphs, but incorporates by reference or in full text up to 24 clauses.

(a) Compliance with FAR Clauses

Requires compliance with the following clauses:

Requires compliance with the following clauses as indicated by the contracting officer:

Requires compliance with the FAR clauses for service contracts as indicated:

(1) 52.222-41, Service Contract Act of 1965, As amended (41 U.S.C. 351, );

(2) 52.222-42, Statement of Equivalent Rates for Federal Hires (29 U.S.C. 206 and 41 U.S.C. 351, );

Provides notice that for negotiated contracts in excess of the simplified acquisition threshold, the Comptroller General is given access to the contractor’s records of the contract for a period of 3 years.

Provides notice that only the clauses listed below (as well as pricing data clauses) are required to be included in subcontracts.

(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).

Solicitations and contracts for the acquisition of commercial items prepared using FAR Part 12 are to be assembled, to the maximum extent practicable, using the following format. Note that the format differs from the Uniform Contract Form set forth in FAR Parts 14 and 15.

(2) Continuation of any block from SF 1449, such as-

(a) Block 10 if set-aside for emerging small businesses;

(b) Block 18B for remittance address;

(c) Block 19 for contract line item numbers;

(d) Block 20 for schedule of supplies/services; or

reference (see SF 1449 block 26);

(b) Any addendum to 52.212-4; and

(c) 52.212-5, Contract Terms and Conditions Required to Implement

Statutes and Executive orders.

(4) Any contract documents, exhibits or attachments; and

(a) 52.212-1, Instructions to Offerors-Commercial Items, by reference

(see SF 1449, Block 26);

(b) Any addendum to 52.212-1;

(c) 52.212-2, Evaluation-Commercial Items, or other description of

evaluation factors for award, if used; and

(d) 52.212-3, Offeror Representations and Certifications-Commercial

Items.

FAR Part 12 now lists those laws (and any implementing clauses) that have been amended so that they are inapplicable to acquisitions for commercial items. There are two lists, one for prime contracts for commercial items and one for subcontracts for commercial items. The lists are as follows:

The following laws are not applicable to executive agency contracts for the acquisition of commercial items:

Certain requirements of the following laws have been eliminated for executive agency contracts for the acquisition of commercial items:

The applicability of the following laws have been modified in regards to Executive agency contracts for the acquisition of commercial items:

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

Certain requirements of the following laws have been eliminated for subcontracts at any tier for the acquisition of commercial items or commercial components:

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:

FAR Part 12.6 provides for new streamlined procedures for the evaluation and solicitation of commercial items. These procedures, when understood by government agencies, will greatly simplify and expedite the acquisition of standard commercial items. The procedures will most effectively be used for smaller buys of commercial items that may exceed the Simplified Acquisition Threshold, but nevertheless are relatively straightforward acquisitions although there is no dollar limit to their use.

Under the streamlined evaluation procedures, the contracting officer must still list the evaluation criteria in the solicitation. However, it is suggested that only criteria that need be listed are:

For a technical evaluation, the regulations suggest that no subfactors need be used. Rather the contracting officer should rely on product literature, product samples, technical features, and warranty provisions. This is possible if the government’s requirements are adequately described in the solicitation.

The streamlined solicitation procedure is accomplished by the contracting agency placing the entire solicitation in the Commerce Business Daily with award to be made as quickly as 15 days after the solicitation appears. FAR 12.603. The combined synopsis/solicitation will contain the standard synopsis information as required by FAR 5.207, e.g., date, contracting office address, service or supply code, solicitation number, response date, contact point. In addition the following information is to be included:

Using this procedure eliminates the need for the standard 15 day CBD notice period. In addition, the contracting agency is free to select any reasonable time period for receipt of offers (instead of the standard 30 days) as long as the period is at least 15 days.

Because this procedure is new, companies should prepare a package of documents that can be provided to agency personnel that provides a copy of the regulations, explains the procedures, and provides a copy of a draft CBD solicitation for the product to be purchased.