Government Contracting - DFARS Part 212 - Acquisition of Commercial Items - Win Federal Contracts

DFARS - 2021
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About Our Speaker
Dennis Callahan
Rogers Joseph O’Donnell
dcallahan@rjo.com
415.365.5385

DFARS Part #212
Acquisition of Commercial Items
Wednesday, 24 March 2021

DFARS Part #212
Commercial Item Contracting
FAR Part 12; DFARS Part 212

DFARS Part #212
Before the Federal Acquisition Streamlining Act of 1994 (FASA)
1. In 1960’s and 1970’s the government, particularly DoD, was driving research and development
a) DoD primarily focused on buying unique items from traditional defense contractors; commercial sector
leveraging government-sponsored work
2. 1980 – 1985; DoD Budget up 40%
a) Scandals: $400 hammers; $500 toilet seats
b) 1985: 131 separate investigations against 45 of top 100 defense contractors
3. Reagan Administration empaneled the Packard Commission to study Defense acquisition, among other
thing
4. Expanded acquisition of commercial products

DFARS Part #212
Section 800 Report/VP Gore National Performance Review – 1993
1. Streamlining acquisitions to make more businesslike
2. Increase the use of commercial items and minimize military specs
3. Pilot programs under DoD waivers to test the use of standard commercial practices to
obtain defense goods and services

DFARS Part #212
FASA (October 1994)
(1) Government must buy commercially when “reasonably practicable”
(2) Animating rationales
a) Reduce government-funded R&D; detailed design specs; product testing
b) Minimize acquisition cycle time
c) Removing barriers to commercial item contracting saves time, saves money, reduces
risk (FFP, some T&M)
(3) Methodology: Requirements defined to allow commercial items to meet need

DFARS Part #212
FAR Part 12 (October 1995)
(1) Goal was to mimic the commercial marketplace to the extent allowed under federal
contracting rules.
(2) Much of the FAR is exempted from commercial item purchases, but with important
exceptions
a) Exempt: Cost and Pricing Data, Cost Accounting Standards, intellectual property rights,
changes clause
b) What still applies: Socioeconomic policy (EEO, veterans opportunities, reporting and
auditing), ethics rules, domestic sourcing, reporting requirements, False Claims Act

DFARS Part #212
What is a “Commercial Item”?
(1) Products “of a type customarily used by the general public” offered for sale, lease or
license to the general public, including items “evolved” from types used by general public,
and those with modifications
(2) Services “of a type offered and sold competitively in substantial quantities in the
commercial marketplace based on established catalog or market prices”
a) Installation services
b) Maintenance and repair services
c) Training services

DFARS Part #212
What Does “Of a Type” Products Mean?
(1) Looks to essential physical characteristics of the requirement, and compares it to
commercial items
(2) Is the primary purpose the item non-governmental (commercial)? If not, not a
commercial item.
(3) Is the item produced on the same production line as items sold commercially?

DFARS Part #212
Commercial Products Determination
(1) All helicopters have an Automatic Direction Finder (ADF) antenna
(2) The Black Hawk ADF antenna has a unique size and shape
(3) Several vendors sell ADF antennas commercially
(4) Contracting officer compared the form and function of commercial ADF antennas to the
Black Hark requirement, and determined that it was a commercial item even if not sold in
the commercial marketplace
(5) Other examples: ruggedized computers, Chemical Agent Resistant Coating (CARC) paint
-from DoD Guidebook for Acquiring Commercial Items

DFARS Part #212
Commercial Services Determination
(1) Easier cases are for installation, maintenance, repair and training services to support
commercial items; food service, storage and distribution, janitorial services
(2) In DoD procurements, sustainment services contracts in support of major weapons non-
commercial items often are commercial services
a) E.g., maintenance, repair and operations of noncommercial aircraft
b) E.g., components of major weapons systems
(3) Limitations arise where there are not established catalog prices or market prices

DFARS Part #212
Market Research
(1) Market Research (FAR Part 10)
a) Market research based on general outcomes sought
(1) Determines sources
(2) Determines if commercial items exist to satisfy need or could do so with reasonable modifications,
or if commercial items can satisfy components of larger purchases
(3) Determines commercial terms (warranties, maintenance, discounts, financing and other benefits
that can be monetized)
b) Techniques
(1) Experts; industry conferences and expos
(2) Requests for information; sources sought notices
(3) Industry publications

DFARS Part #212
Describing Agency Needs
(1) Describing Agency Needs (FAR Part 11)
a) Using market research, promote competition by limiting restrictive provisions
(1) State requirements in terms of functions, performance required, essential physical
characteristics
(2) Define requirements in terms that encourage use of commercial items (at
component/subcontract level if necessary)
b) Encourage standardization and use of items accepted by
(2) Discourage brand name descriptions or definitions so particular as to identify a single
manufacturer

THANK YOU To Our Speaker
Dennis Callahan
Rogers Joseph O’Donnell
dcallahan@rjo.com
415-365-5385

Thank You For Attending!
DFARS - 2021
Defense Federal Acquisition Regulation Supplement
Complimentary Webinar Series

Government Contracting - DFARS Part 212 - Acquisition of Commercial Items - Win Federal Contracts

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Government Contracting - DFARS Part 212 - Acquisition of Commercial Items - Win Federal Contracts