11198 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Chapter 1

[FAR Case 94–790]

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: Proposed rule.

SUMMARY: This proposed rule is issued

pursuant to the Federal Acquisition

Streamlining Act of 1994 to implement

the revised statutory authorities 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.

DATES: Comments should be submitted

on or before May 1, 1995 to be

considered in the formulation of a final

rule.

Public Meeting: March 17, 1995, 9:30

a.m. at the following location: General

Services Administration, Auditorium,

18th & F Streets, NW., Washington, DC

20405.

Written and Oral Statements:

Statements prepared for oral

presentation must be sent to the FAR

Secretariat at the address given below,

not later than March 13, 1995.

ADDRESSES: Interested parties should

submit written comments to: General

Services Administration, FAR

Secretariat (VRS), 18th & F Streets, NW.,

room 4037, Washington, DC 20405.

Please cite FAR case 94–790 in all

correspondence related to this case.

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 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. Major changes that can be

expected in the acquisition process as a

result of Federal Acquisition

Streamlining Act implementation

include changes in the areas of

Commercial Item Acquisition,

Simplified Acquisition Procedures, the

Truth in Negotiations Act, and

Introduction of the Federal Acquisition

Computer Network (FACNET).

This notice announces FAR 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 Commercial Item Drafting

Team was organized and tasked with

reviewing Title VIII of the Act and

preparing implementing language for

the FAR. The proposed revisions make

changes throughout the FAR to

incorporate the provisions of Title VIII.

The most significant proposed revisions

are in the following FAR parts:

FAR Part 2 has been amended to

incorporate 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.

FAR 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.

FAR 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

FAR 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.

FAR Part 12 has been revised to

address the acquisition of commercial

items. The Team created this entirely

new coverage to address in one FAR

part both the policies and procedures

for the acquisition of commercial items.

FAR Part 12 was chosen to reinforce the

expected sequence of events in

approaching a given acquisition * * *

market research (FAR Part 10),

description of agency need (FAR Part

11), acquisition of commercial items, if

they meet the agency’s needs (FAR Part

12); and acquisition of other than

commercial items using current FAR

procedures (FAR Parts 13, 14 and 15).

The Team also believes that moving the

policies and procedures for the

acquisition of commercial items to FAR

Part 12 creates a clean break with past

policies and procedures such as the

Acquisition and Distribution of

Commercial Products (ADCOP) program

initiated in 1978 and currently

described in FAR Part 11, and the

DFARS 211 implementation of Section

824(b) of the 1990–1991 DOD

Authorization Act.

—48 CFR Part 12, FAR Subpart 12.1

states that the policies and procedures

in the revised FAR Part 12 are

applicable to all acquisitions of

commercial items above the micropurchase threshold. The requirements

of other parts of the FAR apply to

commercial items to the extent they

are not inconsistent with FAR Part 12;

—48 CFR Part 12, FAR Subpart 12.2

identifies special requirements for the

acquisition of commercial items.

These requirements generally reflect

the requirements of Title VIII.

—48 CFR Part 12, FAR Subpart 12.3

establishes standard provisions and

clauses for use in the acquisition of

commercial items. The Team believes

this approach is essential to meet the

requirements of the statute and offers

contracting officers and industry an

easy to use, simplified method for

acquiring commercial items.

However, the Team also recognizes

that it is essential that contracting

officers be allowed to tailor

solicitations and contracts to meet the

needs of the particular acquisition

and the market place 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

constraints be placed on this authority
Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules 11199

to tailor, and that has also been

accommodated in this subpart.

—The Team proposes the establishment

of a new form, the Standard Form

XXXX, Solicitation/Contract/Order for

Commercial Items. The proposed SF

XXXX 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

XXXX to document receipt of the

supplies or services by the

government avoiding the need for

preparation of separate receipt/

acceptance forms.

—48 CFR Part 12, FAR Subpart 12.4

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.

—FAR 12.402 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 12.402

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.

—FAR 12.403 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. The list of laws to

be included in 12.403 are contained

in FAR case 94–791 which is

currently under agency review and

coordination. The list will be

published in the Federal Register for

public comment upon completion.

—48 CFR Part 12, FAR Subpart 12.6

identifies two streamlined procedures

for the solicitation and award of

contracts for commercial items. These

procedures may be used at the

discretion of the contracting officer.

FAR Part 52 has been revised to

include several new provisions and

clauses to be inserted in all solicitations

and contracts for the acquisition of

commercial items:

—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.

—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 FAR 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 order of importance

for each acquisition.

—52.212–3, Offeror Representations and

Certifications—Commercial Items,

includes the certifications 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.

—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

practices.

—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. 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 paragraph

(d) of the clause. The clauses to be

included on this list and flowed down

to subcontractors for commercial

items are currently under agency

review and coordination. The list will

be published in the Federal Register

for public comment once coordination

is complete.

—52.244–XX, Subcontracts for

Commercial Items and Commercial

Components, implements the

preference for the acquisition of

commercial items or

nondevelopmental items other than

commercial 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.

The clauses to be included on this list

and flowed down to subcontractors

for commercial items are contained in

FAR case 94–791 which is currently

in agency review and coordination.

This list will be published in the

Federal Register for public comment

once coordination is complete.

Public Meeting. The FAR Council is

interested in an exchange of ideas and

opinions on this rule. For that reason,

the FAR Council is conducting a series

of public meetings. A public meeting

will be held on March 17, 1995, to

enable the public to present its views on

this rule. This rule will only be

discussed at the public meeting session.

Any subsequent public meetings will be

devoted to other revisions to the FAR.

The public is encouraged to furnish its

views; the Council anticipates that

public comments will be very helpful in

formulating final rules.

Persons or organizations wishing to

make presentations will be allowed 10

minutes each, provided they notify the

FAR Secretariat at (202) 501–4755 and

submit written statements of the

presentation by March 13, 1995. Persons

or organizations with similar positions

are encouraged to select a common

spokesman for presentation of their

views. This meeting, in conjunction

with the Federal Register notice

soliciting public comments on the rule,

will be the only opportunity for the

public to present its views.
11200 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

B. Regulatory Flexibility Act

The proposed language 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 either FAR

Part 11 or by including certain

modifications to existing items and by

including certain commercial services.

In both 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 market place to

acquire them. The rule also cautions

contracting officers not to require

potential sources to submit more than

the minimum information necessary as

a part of market research.

(3) It establishes a clear 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 clear 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 performanceoriented documents and nongovernment

standards rather than Federal/Militaryunique standards thereby allowing a

broader range of small businesses to

participate in Government acquisitions;

(6) It allows contracting officers the

flexibility to use either the solicitation,

evaluation and award procedures in the

revised Part 12 for acquiring commercial

items, or the procedures in Part 13, 14

or 15 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 that, except in unique

circumstances, that the Government

utilize 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 may only use the solicitation

provisions and contract clauses

specifically established for acquiring

commercial items and may only tailor

those provisions and clauses when the

customary practices in the market

dictate the use of other terms and

conditions; 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.

An Initial Regulatory Flexibility

Analysis (IRFA) has been prepared and

will be provided to the Chief Counsel

for Advocacy for the Small Business

Administration. A copy of the IRFA may

be obtained from the FAR Secretariat.

Comments are invited. Comments from

small entities concerning the affected

FAR subpart will be considered in

accordance with 5 U.S.C. 610. Such

comments must be submitted separately

and should cite 5 U.S.C. 601, et seq.

(FAR Case 94–790), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act (Pub.

L. 96–511) is deemed to apply because

the proposed rule contains information

collection requirements. Accordingly, a

request for approval of a new

information collection requirement

concerning Acquisition of Commercial

Items is being submitted to the Office of

Management and Budget under 44

U.S.C. 3501, et seq. Public comments

concerning this request are invited in a

Federal Register notice which appears

elsewhere in this issue.

List of Subjects in 48 CFR Chapter 1

Government procurement.

Dated: February 17, 1995.

Edward C. Loeb,

Deputy Project Manager for the

Implementation of the Federal Acquisition

Streamlining Act of 1994.

Therefore, it is proposed that 48 CFR

Chapter 1 be amended as set forth

below:

1. The authority citation for 48 CFR

Chapter 1 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 paragraph (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

market place made to meet Federal

Government requirements. Such

modifications are considered minor if

the change does not significantly alter a

commercial item’s function or essential

physical characteristics. Minor is not

defined by the specific dollar value or

percentage basis of the change;

(d) Any combination of items meeting

the requirements of paragraph (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 paragraph (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;
Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules 11201

(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 a fixed

catalog 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 that the

item was developed exclusively at

private expense and has been 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 commercial item;

(b) Any previously developed item of

supply that is in use by a department or

agency of the United States, a State or

local government, or a foreign

government with which the United

States has a mutual defense cooperation

agreement;

(c) Any item described in paragraphs

(a) or (b) 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

(d) Any item of supply being

produced that does not meet the

requirements of paragraph (a), (b), or (c)

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 all

solicitations and contracts exceeding the

simplified acquisition threshold 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 all solicitations and

contracts exceeding the simplified

acquisition threshold (see 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

part 13. For procurements 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) For each contract action in an

amount estimated to be greater than

$25,000 but not greater than the

simplified acquisition threshold, or for

the acquisition of commercial items, the

contracting officer shall establish a

response time which will afford

potential offerors a reasonable

opportunity to respond.

(c) 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 or is for other than

the acquisition of commercial items (see

part 12).

* * * * *

PART 6—COMPETITION

REQUIREMENTS

8. 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.

* * * * *

9. 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;
11202 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

(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]

10. Section 7.101 is amended by

removing the definition ‘‘Market

survey’’.

11. 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

other than commercial 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)); and

(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.

12. Section 7.103 is amended by

revising paragraph (b); redesignating

paragraphs (c) through (l) as (d) through

(m) and adding a new paragraph (c); and

in newly designated (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,

nondevelopmental items other than

commercial items in response to agency

solicitations (10 U.S.C. 2377 and 41

U.S.C. 251, et seq.); and

(c) Promoting and providing for full

and open competition with due regard

to the nature of the supplies and

services to be acquired (10 U.S.C.

2305(a)(1)(A) and 41 U.S.C. 253a(a)(1)

(see parts 6 and 11).

* * * * *

13. Section 7.105 is amended in

paragraph (a)(8)(iii) by revising the

parenthetical to read ‘‘(see 11.001(d))’’;

by revising paragraph (b)(1); 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

considerations of small business and

small disadvantaged 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.

* * * * *

(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 (see

part 11);

* * * * *

PART 9—CONTRACTOR

QUALIFICATIONS

14. 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.

* * * * *

15. Section 9.306 is amended in

paragraph (f) introductory text by

revising the parenthetical to read ‘‘(see

11.404)’’.

16. 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) The head of an agency shall—

(1) Ensure that, in coordination with

customers, 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.

(3) Use the results of market research

to determine—
Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules 11203

(i) If commercial items or, to the

extent commercial items suitable to

meet the agency’s needs are not

available, nondevelopmental items

other than commercial 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; and

(ii) Practices of firms engaged in

producing, distributing, and supporting

commercial items, such as terms for

warranties, buyer financing,

maintenance and packaging, and

marking; and

(iii) Sources capable of satisfying the

agency’s requirements exist.

(b) When conducting market research,

the head of an agency should not

require 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 general terms sufficient to

allow conduct of market research.

(b) Market research is then conducted

to ascertain the availability of

commercial items, as well as

distribution and logistics support to

meet those needs, and to identify market

practices.

(c) 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

such as—

(1) The availability of commercial

items suitable as is or that could be

modified to meet the agency’s

requirements;

(2) Customary practices regarding

customizing, modifying or tailoring of

items to meet customer needs and

associated costs;

(3) Customary practices, including

warranty, buyer financing, discounts,

etc., under which commercial sales of

the products are made;

(4) The requirements of any laws and

regulations unique to the item being

acquired; and

(5) The distribution and support

capabilities of potential suppliers,

including alternative arrangements and

cost estimates.

(d) Techniques for conducting market

research may include any or all of the

following:

(1) Contacting experts regarding

market capabilities to meet

requirements.

(2) Reviewing the results of recent

market research undertaken to meet

similar or identical requirements.

(3) Publishing formal requests for

information in appropriate technical

and scientific journals.

(4) Querying Government data bases

that provide information relevant to

agency procurements.

(5) Participating in interactive, on-line

communication among industry,

acquisition personnel, and customers.

(6) Obtaining source lists of similar

items from other contracting activities

or agencies, trade associations or other

sources.

(7) Reviewing catalogs and other

generally available product literature,

much of which are available on-line,

published by manufacturers,

distributors, and dealers.

(8) Holding presolicitation

conferences.

(e) When initial market research

indicates commercial or

nondevelopmental items other than

commercial items might not be available

to satisfy agency needs, reevaluate the

need and determine whether it can be

restated to permit commercial or

nondevelopmental items other than

commercial items to satisfy the agency’s

needs.

17. and 18. Sections 11.000 and

11.001 are revised to read as follows:

11.000 Scope of part.

This part prescribes policies and

procedures for describing agency needs

and related considerations of

acquisition streamlining.

11.001 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 other than

commercial items, in response to the

agency solicitations;

(iii) Provide offerors of commercial

items and nondevelopmental items

other than commercial items an

opportunity to compete in any

procurement to fill such requirements;

(iv) Require prime contractors and

subcontractors at all levels under the

agency contracts to incorporate

commercial items or nondevelopmental

items other than commercial 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

items suitable to meet the agency’s

needs are not available,

nondevelopmental items other than

commercial 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 procurements,

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,

contractors should be involved in

recommending application and tailoring

of requirements. 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)).

11.002 through 11.007 [Removed]

19. Sections 11.002 through 11.007

are removed.

20. Subparts 11.1 through 11.3 are

added to read as follows:

Subpart 11.1—Selecting and

Developing Requirements Documents

11.101 Order of precedence.

Agencies may select from existing

requirements documents, modify or
11204 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

combine existing requirements

documents, or create new requirements

documents to meet agency needs,

consistent with the following order of

precedence:

(a) Documents mandated for use by

law or regulation pursuant to law.

(b) Performance-oriented documents:

(1) Nongovernment standards.

(2) Commercial item descriptions.

(3) Federal specifications and

standards.

(4) Military specifications and

standards.

(c) Design-based documents:

(1) Nongovernment standards.

(2) Federal specifications and

standards.

(3) Military specifications and

standards.

(d) Agency-unique standards,

specifications and related publications

issued by the government outside the

military or Federal series for the nonrepetitive acquisition of

nondevelopmental items.

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

DOD 4120.3–M, Defense

Standardization Program Policies and

Procedures.

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) The criteria to be considered in

determining commercial market

acceptance include—

(1) The minimum need of the agency

concerned; and

(2) The entire relevant commercial

market, including small business.

11.104 Items peculiar to one manufacturer.

Agency requirements shall not be

written so as to specify 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 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

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 the 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.

(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 and

DoDISS may be purchased from the

Superintendent of Documents, U.S.

Government Printing Office,

Washington, DC 20402.

11.202 Acquiring used or reconditioned

material, former Government surplus

property and residual inventory.

(a) Generally, all contractually

furnished supplies and their

components, including former

Government property, will be new,

including recycled (see 48 CFR part 23,

FAR subpart 23.4 for policy on

recovered materials). However, agencies

may acquire used or reconditioned

material, former Government surplus

property, or residual inventory

conforming to the solicitation’s

requirements, if the contracting officer

determines that it is acceptable. When

acquiring commercial items, the

contracting officer should determine the

customary practice in the industry

before including a requirement for new

materials. When such a determination is

made, the solicitation shall clearly

identify the supplies or their

components that need not be new, along

with the necessary details on their

acceptability. Offerors wishing to

provide such used or reconditioned

material, former Government surplus

property, or residual inventory shall do

so in accordance with the clause at

52.211–5, New Material, or the

provision at 52.211–6, Listing of Used or

Reconditioned Material, Residual

Inventory, and Former Government

Surplus Property, and the clause at

52.211–7, Used or Reconditioned

Material, Residual Inventory, and

Former Government Surplus Property,

as appropriate.

(b) Contracting officers shall consider

the following when determining

whether used or reconditioned

materials, former Government surplus

property, or residual inventory are

acceptable:

(1) Safety of persons or property.

(2) Total cost to the Government

(including maintenance, inspection,

testing, and useful life).

(3) Performance requirements.

(4) Availability and cost of new

materials and components.

(c) With regard to former Government

surplus property, the contracting officer

shall ensure that the prices paid for

such items are reasonable considering

overall cost savings to the Government.

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.
Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules 11205

11.203 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.

(e)(1) 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.

(2) The contracting officer may insert

the clause in solicitations and contracts

for services that may involve the

incidental furnishing of parts.

(f)(1) The contracting officer may

insert the provision at 52.211–6, Listing

of Used or Reconditioned Material,

Residual Inventory, and Former

Government Surplus Property, in

solicitations for supplies. The provision

shall not be used if it would be contrary

to customary commercial practice for

the item being acquired.

(2) The contracting officer may insert

the provision in solicitations for

services that may involve the incidental

furnishing of parts.

(g)(1) The contracting officer may

insert the clause at 52.211–7, Used or

Reconditioned Material, Residual

Inventory, and Former Government

Surplus Property, in solicitations and

contracts for supplies. The clause shall

not be used if it would be contrary to

customary commercial practice for the

item being acquired.

(2) The contracting officer may insert

the clause in solicitations and contracts

for services that may involve the

incidental furnishing of parts.

Subpart 11.3—Maintenance of

Requirements Documents

11.301 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.

11.302 Maintenance of standardization

documents.

(a) Agencies shall submit

recommendations for changes to

standardization documents listed in the

GSA Index of Federal Specifications,

Standards and Commercial Item

Descriptions to the General Services

Administration, Federal Supply Service,

Office of Commodity Management,

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 DOD

4120.3–M, Defense Standardization

Program Policies and Procedures.

Subpart 11.4 [Redesignated from

Subpart 12.1]

21. Subpart 12.1 is redesignated as

Subpart 11.4 and sections 12.101

through 12.104 are redesignated as

sections 11.401 through 11.404,

respectively.

Subpart 11.4 Delivery or Performance

Schedules

22. Newly designated 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

unreasonably tight or difficult to attain

(1) tend to restrict competition, (2) are

inconsistent with small business

policies, and (3) may result in higher

contract prices.

* * * * *

23. Newly designated 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]

24. Newly designated 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 ‘‘52.211–3’’ and inserting

‘‘52.211–10’’.

Subpart 11.5 [Redesignated]

25. Subpart 12.2 is redesignated as

Subpart 11.5 and sections 11.501

through 11.504 are redesignated from

sections 12.201 through 12.204.

11.504 [Amended]

26. Newly designated section 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 inserting

‘‘52.211–13’’.

Subpart 11.6 [Redesignated from

12.3]

27. Subpart 12.3 is redesignated as

Subpart 11.6 and sections 12.300

through 12.304 are redesignated as

sections 11.600 through 11.604,

respectively.

11.604 [Amended]

28. Newly designated 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]

29. Subpart 12.4 is redesignated as

Subpart 11.7 and sections 12.401

through 12.403 are redesignated as

11.701 through 11.703, respectively.
11206 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

11.703 [Amended]

30. Newly designated 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’’.

31. 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.

31a. 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 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 Warranties.

12.210 Contract financing methods.

12.211 Technical data.

12.212 Other customary commercial

practices.

Subpart 12.3—Solicitation Provisions and

Contract Clauses for the Acquisition of

Commercial Items

12.301 Scope of subpart.

12.302 Solicitation provisions and contract

clauses for the acquisition of commercial

items.

12.303 Tailoring of provisions and clauses

for the acquisition of commercial items.

Subpart 12.4—Applicability of Certain Laws

to the Acquisition of Commercial Items

12.400 Scope of subpart.

12.401 Applicability.

12.402 Applicability of certain laws to

Executive agency contracts for the

acquisition of commercial items.

Subpart 12.5—Unique Requirements for the

Administration of Contracts for Commercial

Items

12.501 General.

12.502 Pricing of changes.

12.503 Acceptance.

12.504 Termination.

Subpart 12.6—Streamlined Procedures for

Solicitation and Award of Contracts 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

(Pub. L. 103–355) by establishing

acquisition policies more closely

resembling those of the commercial

market place and encouraging the

acquisition of commercial items and

components at all levels.

12.001 Definition.

Subcontract, as used in this part,

includes 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

nondevelopmental items other than

commercial items are available that

could meet the agency’s requirements;

(b) Acquire commercial items or

nondevelopmental items other than

commercial items when they are

available to meet the needs of the

agency; and

(c) Require prime contractors and

subcontractors at all levels to

incorporate, to the maximum extent

practicable, commercial items or

nondevelopmental items other than

commercial items as components of

items supplied to the agency.

12.102 Applicability.

(a) This part shall be used for the

acquisition of—

(1) Commercial items; and

(2) Nondevelopmental items other

than commercial items, but only when

competing with commercial items under

the same terms, conditions and

evaluation/award criteria (i.e., when at

least one offer is received for a

commercial item under the same

solicitation).

(b) Contracts for the acquisition of

commercial items are subject to the

requirements in other parts of this

chapter. When a requirement in this

part is inconsistent with a requirement

in another part of this chapter, this part

12 shall take precedence for the

acquisition of commercial items.

(c) This part shall not apply to the

acquisition of commercial items at or

below the micro-purchase threshold (see

48 CFR part 13, FAR 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 market place. 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 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, 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.

12.203 Solicitation, evaluation, and award.

(a) Contracting officers may use the

procedures in parts 13, Simplified

Acquisition Procedures; 14, Sealed

Bidding; or 15, Contracting by

Negotiation, as appropriate, for the

acquisition of commercial items.

However, regardless of the procedures

being used, when a requirement in this

part is inconsistent with a requirement

in another part of this chapter, this part

12 shall take precedence.

(b) Where FACNET is available, it

may be used to solicit and award

contracts for commercial items (see part

4).
Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules 11207

12.204 Solicitation/contract form.

The Standard Form XXXX,

Solicitation/Contract/Order for

Commercial Items, shall be used by the

contracting officer when soliciting offers

and awarding contracts for commercial

items. This form contains the

information necessary for solicitations

and contracts as well as documenting

receipt, inspection and acceptance of

commercial items. Other Standard

Forms are not compatible with the

policies for the acquisition of

commercial items in that they contain

references to the Uniform Contract

Format and certain FAR clauses that are

not applicable to the acquisition of

commercial items.

12.205 Offers.

(a) Contracting officers 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 use existing

product literature from offerors of

commercial items in lieu of requesting

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 allow

fewer than 30 days response time for

receipt of offers for commercial items.

The response time shall afford potential

offerors a reasonable opportunity to

respond to ensure adequate competition

(see 5.203).

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 48 CFR Part 9,

(FAR) subpart 9.1 and 48 CFR Part 15,

(FAR) subpart 15.6.

12.207 Contract type.

Firm fixed price contracts or fixed

price contracts with economic price

adjustment shall be used for the

acquisition of commercial items. Use of

any other contract type to acquire

commercial items is prohibited.

12.208 Contract quality assurance.

Solicitations and contracts for

commercial items shall use contractors’

existing quality assurance systems as a

substitute for Government inspection

and testing before tendering for

acceptance unless customary market

practices for the commercial item being

acquired permits in-process inspection.

12.209 Warranties.

(a) 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.

(b) Agencies shall consider warranties

offered in light of established systems

for their administration. When

necessary, agencies shall establish

procedures to permit the effective

administration of commercial

warranties to include identifying

warranted items and warranty periods,

facilitating return of warranted

commercial items to the contractor for

repair or replacement and collection of

product performance information.

12.210 Contract financing methods.

Customary industry practice for some

commercial items may include a form of

buyer financing such as advance (preperformance) payments or incremental

(pre-delivery) payments based on time

or specified performance milestones. If

market research confirms that buyer

financing is the customary industry

practice for the commercial item to be

acquired, the contracting officer may

offer Government financing. Such

financing shall be consistent with

customary industry practices and the

requirements and limitations of part 32.

12.211 Technical data.

Generally, the Government will

acquire only the technical data

customarily provided to the public. (See

part 27.)

12.212 Other customary commercial

practices.

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

essential to concluding a satisfactory

business arrangement, in the

Government’s best interest, and not

otherwise precluded by law or executive

order.

Subpart 12.3—Solicitation Provisions

and Contract Clauses for the

Acquisition of Commercial Items.

12.301 Scope of subpart.

This subpart establishes provisions

and clauses to be used when acquiring

commercial items.

12.302 Solicitation provisions and

contract clauses for the acquisition of

commercial items.

(a) In accordance with Section 8002 of

Pub. L. 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 XXXX). The contracting officer is

not required to use any other provision.

The contracting officer may tailor these

instructions or provide additional

instructions tailored to the specific

acquisition in accordance with 12.303;

(2) The provision at 52.212–3, Offeror

Representations and Certifications—

Commercial Items. This provision

provides a single, consolidated and

streamlined 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. The contracting

officer is not required to use any other

provision containing a certification or

representation. 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

XXXX). The contracting officer is not

required to use any other clause except

as provided in 12.302(b)(4). The
11208 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

contracting officer may tailor this clause

in accordance with 12.303; and

(4) The clause at 52.212–5, Contract

Terms and Conditions Required to

Implement Statutes or Executive

Orders—Commercial Items. This clause

includes 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 indicate which, if any, of the

additional clauses cited in 52.212–5 are

applicable to the specific acquisition.

When either 15.804–2(b) or the

exception at 15.804–1(a)(2) apply, the

contracting officer shall include the

appropriate clauses prescribed by part

15. The contracting officer is not

required to include any other FAR

clause in the contract. This clause may

not be tailored except in accordance

with 48 CFR part 1, subpart 1.4.

(c) The contracting officer may insert

the provision at 52.212–2, Evaluation—

Commercial Items, in solicitations for

commercial items (see 12.602). If this

provision is not used, a similar

provision containing all evaluation

factors required by 48 CFR part 14,

subpart 14.2 or 48 CFR part 15, subpart

15.6 shall be included in the solicitation

as an addendum (see 12.303(c)).

(d) Notwithstanding prescriptions

contained elsewhere in the FAR, only

the provisions and clauses prescribed in

this subpart shall be required for use in

solicitations and contracts for the

acquisition of commercial items. The

provisions and clauses in this part shall

be revised by the FAR Council, as

necessary, to reflect the applicability of

future statutes and executive orders to

contracts for the acquisition of

commercial items in accordance with

Section 34 of the Office of Federal

Procurement Policy Act.

(e) Agencies shall supplement these

provisions and clauses as necessary to

reflect agency unique statutes.

12.303 Tailoring of provisions and clauses

for the acquisition of commercial items.

(a) The provisions and clauses

established in this subpart are intended

to address, to the maximum extent

practicable, customary commercial

market place 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 and the

variations in customary commercial

practices across the entire market place,

contracting officers may, 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) Contracting officers shall not tailor

the clause at 52.212–4, Contract Terms

and Conditions—Commercial Items, or

otherwise include any additional terms

or conditions in a solicitation or

contract for commercial items that are

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 market place, 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.

(c) Tailoring shall be by addenda to

the solicitation and contract. The

contracting officer shall indicate in

Block 26 of the SF XXXX 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 XXXX; a continuation of the

description of the supplies/services

being acquired; further elaboration of

any other item(s) on the SF XXXX; 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.).

Subpart 12.4—Applicability of Certain

Laws to the Acquisition of Commercial

Items

12.400 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 (a) Are not

applicable to contracts for the

acquisition of commercial items, or (b)

are not applicable to subcontracts, at

any level, 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.

12.401 Applicability.

(a) This subpart applies to any

contract or subcontract at any level 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.

12.402 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 48 CFR part 22, 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 AntiKickback Act of 1986 (see 3.502);

(4) 41 U.S.C. 423e(1)(B), Requirement

for certain certifications 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 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 part 99);

(d) The FAR prescription, provision

or clause for each of these statutes has

been revised in the appropriate part to

reflect their proper application to the

acquisition of commercial items.
Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules 11209

12.403 Applicability of certain laws to

subcontracts for the acquisition of

commercial items.

(a) The following laws are not

applicable to subcontracts under either

a contract for the acquisition of

commercial items or a subcontract for

the acquisition of commercial items:

[list of laws to be published in the

Federal Register in a future proposed

rule under FAR case 94–791]

(b) Certain requirements of the

following laws have been eliminated for

subcontracts under either a contract for

the acquisition of commercial items or

subcontract for the acquisition of

commercial items: [list of laws to be

published in the Federal Register in a

future proposed rule under FAR case

94–791]

(c) The applicability of the following

laws have been modified in regards to

subcontracts under either a contract for

the acquisition of commercial items or

a subcontract for the acquisition of

commercial items: [list of laws to be

published in the Federal Register in a

future proposed rule under FAR case

94–791]

(d) The FAR prescription, provision

or clause for each of these statutes has

been revised in the appropriate part to

reflect their proper application to the

acquisition of commercial items.

Subpart 12.5—Unique Requirements

for the Administration of Contracts for

Commercial Items

12.501 General.

This subpart outlines selected areas

where the administration of contracts

for commercial items differs

substantially from the administration of

other Government contracts.

12.502 Pricing of changes.

When the exceptions at 15.804–1(a)

do not apply, the contracting officer

shall include the appropriate clauses

prescribed by part 15.

12.503 Acceptance.

Acceptance under the clause at

52.212–4, Contract Terms and

Conditions—Commercial Items,

assumes that the Government will rely

on the contractor’s assurances that

commercial items tendered for

acceptance conform to the requirements

of the contract. The acceptance

provision at 52.212–4 includes patent

defects as a reason to revoke finality of

acceptance.

12.504 Termination.

(a) The clause at 52.212–4, Contract

Terms and Conditions—Commercial

Items, contains procedures for

termination of contracts for commercial

items, either for convenience or for

cause, that are consistent with

customary commercial practice. The

contracting officer should consult with

legal counsel prior to terminating any

contract for cause.

(b) Contractors are required to notify

the Government when there will be an

excusable delay. Failure to notify the

Government as soon as it is reasonably

possible could result in termination for

cause.

(c) The remedies available to the

Government if a contract is terminated

for cause are those available to any

buyer in the marketplace and are not

limited by part 49. The Government’s

preferred remedy will be to acquire

similar items from another contractor

and charge the terminated contractor

with any excess reprocurement costs.

Subpart 12.6—Streamlined Procedures

for Solicitation and Award of Contracts

for Commercial Items

12.601 General.

This subpart provides (a) a

streamlined procedure for evaluating

offers for commercial items; and (b) a

streamlined procedure for soliciting

offers for commercial items. These

procedures are intended to simplify the

process of preparing and issuing

solicitations, and evaluating offers for

commercial items consistent with

customary commercial practices. While

the procedures described in this subpart

are appropriate for many commercial

items, other methods of evaluation may

also be appropriate. The contracting

officer may use these procedures for

soliciting offers for commercial items in

lieu of procedures contained in parts 13,

14 or 15.

12.602 Streamlined evaluation of offers.

(a) 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. 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 tailored criteria

contained in the provision at 52.212–2,

Evaluation—Commercial Items, and any

addenda. 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 its intended use. A

technical evaluation would 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 48 CFR part 15,

subpart 15.6. 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

trade-offs considered.

12.603 Streamlined solicitation for

commercial items.

(a) To reduce the time required to

solicit and award contracts for the

acquisition of commercial items, the

contracting officer may use this

procedure which combines the CBD

synopsis required by 5.203 and the

issuance of the solicitation into a single

document with the following

limitations:

(1) FAR 5.207 limits submissions to

the CBD to 12,000 textual characters

(approximately 31⁄2 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) 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) A statement that this is a combined

synopsis/solicitation for commercial

items prepared in accordance with the

format in subpart 12.6, as supplemented

with additional information included in

this notice, and that a written

solicitation will not be issued.
11210 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

(ii) A statement that the solicitation

document and incorporated provisions

and clauses are those in effect through

FAC lll.

(iii) A notice of small business or

other set-aside, if applicable.

(iv) A list of contract line item

number(s) and items, quantities and

units of measure, (including option(s), if

applicable).

(v) Description of requirements for the

items to be acquired.

(vi) Date(s) and place(s) of delivery.

(vii) A statement regarding any

addenda to the provision at 52.212–1,

Instructions to Offerors—Commercial.

(viii) 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.

(ix) 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.

(x) A statement regarding any

addenda to the clause at 52.212–4,

Contract Terms and Conditions—

Commercial Items.

(xi) A statement regarding which, if

any, of the additional FAR clauses cited

in the clause at 52.212–5, Contract

Terms and Conditions Required To

Implement Statutes Or Executive

Orders—Commercial Items, are

applicable to the acquisition.

(xii) 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 FIRMR 201–39.106–4))

determined by the contracting officer to

be necessary for this acquisition and

consistent with customary commercial

practices.

(xiii) A statement regarding any

applicable Commerce Business Daily

numbered notes.

(xiv) The date, time and place offers

are due.

(3) Response time for receipt of

offers—

(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; and

(ii) When using the combined CBD

synopsis/solicitation, contracting

officers shall allow at least 15 days

response time (see 5.203(b)).

(4) Post copies of the combined CBD

synopsis/solicitation in accordance with

5.101(a)(2).

(5) Amendments to solicitations shall

be published in the same manner as the

initial synopsis/solicitation.

PART 13—SIMPLIFIED ACQUISITION

PROCEDURES

13.501 [Amended]

32. Section 13.501 is amended in

paragraph (c) by removing ‘‘12.4’’ and

inserting ‘‘11.7’’.

PART 14—SEALED BIDDING

14.201–2 [Amended]

33. 14.201–2 is amended in the

parenthetical of paragraph (c) by

removing ‘‘part 10, Specifications,

Standards, and Other Product

Descriptions’’ and inserting ‘‘part 11’’;

and in the parenthetical of paragraph (d)

by removing ‘‘10.004(e)’’ and inserting

‘‘part 11’’.

14.404–1 [Amended]

34. 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]

35. 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’’;

and in the parenthetical of paragraph (d)

by removing ‘‘10.004(e)’’ and inserting

‘‘part 11’’.

36. 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]′

37. Section 15.503 is amended in

paragraph (b) by removing the word

‘‘product’’ and inserting ‘‘item’’.

38. 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

39. 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.

40. 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—

* * * * *

41. Section 16.301–3 is amended by

redesignating paragraphs (a) through (c)

as paragraphs (a)(1) through (a)(3),

respectively, designating the

introductory text as paragraph (a)

introductory text; and adding paragraph

(b) to read as follows:

16.301–3 Limitations.

(a) A cost-reimbursement contract

may be used only when—

* * * * *

(b) The use of cost-reimbursement

contracts is prohibited for the

acquisition of commercial items (see

parts 2 and 12).

16.603–2 [Amended]

42. 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

43. Section 22.305 is amended by

redesignating paragraph (h) as (i) and

adding a new paragraph (h) to read as

follows:

22.305 Contract clause.

* * * * *

(h) Contracts for commercial items

(see parts 2 and 12).

* * * * *

44. 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
Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules 11211

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

45. Section 23.105 is amended at the

end of paragraph (b)(2) by removing

‘‘or’’; by redesignating paragraphs (b)(3)

and (4) as (b)(4) and (5), respectively;

and adding a new paragraph (b)(3) to

read as follows:

23.105 Solicitation provision and contract

clause.

* * * * *

(b) * * *

(3) The contract is for other than

commercial items; or

* * * * *

46. Section 23.501 is amended by

redesignating paragraphs (b) through (d)

as (c) through (e) respectively, 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 36—CONSTRUCTION AND

ARCHITECT-ENGINEER CONTRACTS

36.206 [Amended]

47. Section 36.206 is amended by

removing ‘‘12.202’’ and inserting

‘‘11.502’’.

36.303 [Amended]

48. Section 36.303 is amended in

paragraph (c)(4) by removing ‘‘12.1’’ and

inserting ‘‘48 CFR part 11, subpart

11.4’’.

PART 42—CONTRACT

ADMINISTRATION

42.1105 [Amended]

49. and 50. Section 42.1105 is

amended by removing the reference

‘‘subpart 12.3’’ and inserting ‘‘48 CFR

part 11, subpart 11.6’’.

Subpart 42.13 [Redesignated from

subpart 12.5]

42.1304 [Amended]

51. Newly designated section 42.1304

(redesignated from 12.504) is amended

in paragraph (a) by removing ‘‘52.212–

15’’ and inserting ‘‘52.242–17’’.

42.1305 [Amended]

52. Newly designated section 42.1305

(redesignated from 12.505) is amended

in paragraph (a) by removing ‘‘52.212–

12’’ and inserting ‘‘52.242–14’’; in

paragraph (b)(1) by removing ‘‘52.212–

13’’ and inserting ‘‘52.242–15’’; in

paragraph (c) by removing ‘‘52.212–14’’

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

53. 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) (Pub. L. 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) To the maximum extent

practicable—

(1) Contractors and subcontractors at

all levels shall incorporate commercial

items or nondevelopmental items other

than commercial items as components

of items delivered to the Government;

and

(2) Agencies shall not require prime

contractors 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–XX,

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–XX are required to be in

subcontracts for commercial items or

commercial components.

(c) Agencies shall supplement the

clause at 52.244–XX, as necessary to

reflect agency unique statutes.

44.403 Contract clause.

The contracting officer shall insert the

clause at 52.244–XX, Subcontracts for

Commercial Items and Commercial

Components, in solicitations and

contracts for supplies or services other

than commercial items.

PART 46—QUALITY ASSURANCE

54. 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).

* * * * *

55. Section 46.102 is amended by

redesignating paragraph (f) as (g) and

adding a new paragraph (f) to read as

follows:

46.102 Policy.

* * * * *

(f) For the acquisition of commercial

items, contractors are permitted to use

their existing quality assurance system

as a substitute for compliance with

Government-specified requirements

unless customary market practice for the

commercial item being acquired permits

in-process inspection (Pub. L. 103–355);

* * * * *

Subpart 46.2—Contract Quality

Requirements

46.202 [Amended]

56. Section 46.202 is amended by

removing ‘‘three’’ and inserting ‘‘four’’.

57. Sections 46.202–1 through

46.202–3 are redesignated as 46.202–2

through 46.202–4 respectively, 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 use

contractors’ existing quality assurance

system as a substitute for Government

inspection and testing before tendering

for acceptance unless customary market
11212 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

practices for the commercial item being

acquired permits in-process inspection.

58. Section 46.203 is amended by

revising paragraph (a)(1); at the end of

paragraph (a)(2) by removing the

semicolon and ‘‘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.

* * * * *

(a) * * *

(1) Commercial (described in

commercial catalogs, drawing, or

industrial standards; see part 2); or

* * * * *

46.204 [Removed and reserved]

59. Section 46.204 is removed and

reserved.

60. 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).

58. 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). * * *

* * * * *

61. 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).

PART 49—TERMINATION OF

CONTRACTS

62. 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]

63. Section 49.607 is amended by

removing ‘‘12.5’’ in the introductory text

and inserting ‘‘48 CFR part 42, subpart

42.13’’.

PART 52—SOLICITATION PROVISIONS

AND CONTRACT CLAUSES

64. Section 52.202–1 is amended by

revising the date of the clause; by

redesignating paragraphs (b) and (c) as

(e) and (f), and adding new paragraphs

(b), (c) and (d) to read as follows:

52.202–1 Definitions.

* * * * *

Definitions (Date)

* * * * *

(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

market place made to meet Federal

Government requirements. Such

modifications are considered minor if the

change does not significantly alter a

commercial item’s function or essential

physical characteristics. Minor is not defined

by the specific dollar value or percentage

basis of the change;

(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 a fixed 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 that the item

was developed exclusively at private expense

and has been 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.

* * * * *

(End of clause)

65. Section 52.203–6 is amended by

revising the clause date; and by adding

an Alternate I following paragraph (c)(5)

to read as follows:

52.203–6 Restrictions on Subcontractor

Sales to the Government.

* * * * *

Restrictions on Subcontractor Sales to

the Government (Date)

* * * * *

Alternate I (DATE). 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 procurements 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]

66. Sections 52.210–1 through

52.210–7 are redesignated as 52.211–1

through 52.211–7, respectively.

52.212–1 through 52.212–11

[Redesignated]

67. Sections 52.212–1 through

52.212–11 are redesignated as 52.211–8

through 52.211–18, respectively.
Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules 11213

52.212–12 through 52.212–15

[Redesignated]

68. Sections 52.212–12 through

52.212–15 are redesignated as 52.242–

14 through 52.242–17.

69. 52.212–1 through 52.212–5

Added.

52.212—1 through 52.242—15 [Added]

70. 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 12.302(b)(1), insert

the following provision:

Instructions to Offerors—Commercial Items

(Date)

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 XXXX). 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.

Submission of Offers. Submit 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 XXXX, letterhead stationery, or as

otherwise specified in the solicitation. As a

minimum, offers must show—

(a) The solicitation number;

(b) The time specified for receipt;

(c) The name and address of the offeror;

(d) A technical description of the items

being offered in sufficient detail to determine

compliance with the requirements in the

solicitation. This may include product

literature, warranty provisions, or other

documents, if necessary;

(e) Price;

(f) ‘‘Remit to’’ address, if different than

mailing address;

(g) A completed copy of the

representations and certifications at FAR

52.212–3;

(h) Acknowledgment of Solicitation

Amendments;

(i) Past performance information, when

included as an evaluation factor, to include

recent and relevant contracts for the same or

similar items and other references. At a

minimum, this should include contract

numbers, points of contact with telephone

numbers and other relevant information; and

(j) If the offer is not submitted on the SF

XXXX, 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

take exception to the terms and conditions of

the solicitation may be excluded from

consideration.

Offered Prices. 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.

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.

Multiple Offers. Offerors are encouraged to

submit multiple offers presenting alternative

commercial items for satisfying the

requirements of this solicitation. Each offer

submitted will be evaluated separately.

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.

Contract Award. 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.

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.

(End of provision)

52.212–2 Evaluation—Commercial Items.

As prescribed in 12.602(c), the

Contracting Officer may insert a

provision substantially as follows:

Evaluation—Commercial Items (Date)

(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

[Contracting Officer insert relative order of

importance (see 15.605)] shall be used to

evaluate offers:

[Contracting Officer insert the significant

evaluation factors and subfactors, such as (i)

technical capability of the item offered to

meet the Government requirement; (ii) price;

(iii) past performance (see 15.605)].

Technical and past performance, when

combined, are [Contracting Officer insert

relative importance of evaluation factors (see

15.605)].

(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. Evaluation of options

shall not obligate the Government to exercise

the option(s).

(c) The Government may determine that an

offer is unacceptable if the prices proposed

are materially unbalanced between line items

or subline items.

(d) A written award or acceptance of 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 12.302(b)(2), insert

the following provision:

Offeror Representations and Certifications—

Commercial Items (Date)

(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 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 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 at least 51

percent owned by a woman or women or, in

the case of any publicly owned business, at

least 51 percent of the stock is owned by one
11214 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

or more women; and 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) The offeror’s TIN is

llllll. If the offeror does not have a

TIN, provide an explanation with your offer.

If the offeror is owned or controlled by a

common parent that files its Federal income

tax returns on a consolidated basis including

the offeror, provide the name and TIN of the

common parent—

Name llllll lllllllllll

TIN llllll llllllllllll

(2) Type of Business Organization. The

offeror represents—

(i) If the offeror is a U.S. entity, it operates

as:llllll a corporation incorporated

under the laws of the State ofllllll

providing medical and health care services,

or engaged in the billing and collecting of

payments for such services; llllll an

other corporate entity; llllll a sole

proprietorship; llllll a partnership;

llllll a hospital or extended care

facility described in 26 CFR 501(c)(3) that is

exempt from taxation under 26 CFR 501(a).

(ii) If the offeror is a foreign entity, it

operates as:llllll an agency or

instrumentality of a foreign government; or

agency or instrumentality of a Federal, state

or local Government.

(c) Representations required to implement

provisions of the Small Business Act (15

U.S.C. 631 et seq.):

Note: Offerors must complete this

paragraph (c) only if 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.

(1) Small Business Concern. The offeror

represents and certifies as part of its offer that

it b is, b is not a small business concern.

(2) Small Disadvantaged Business Concern.

The offeror represents and certifies that it b

is, b is not a small disadvantaged business

concern.

(3) Women-Owned Small Business

Concern. The offeror represents that it b is,

b 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 b is, b is not, a

women-owned business concern.

(5) Priority for Labor Surplus Area

Concerns. Offeror 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:

lllllllllllllllllllll

(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 in the

four designated industry groups.] The offeror

represents and certifies as part of its offer that

it b is, b is not an emerging small business.

(ii) [Complete only for solicitations in

targeted industry categories expected to

result in an award in excess of $25,000.]

Offeror represents and certifies as follows:

(A) Offeror’s number of employees for the

past 12 months (check this 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 this column

if size standard stated in the solicitation is

expressed in terms of annual receipts)

(Check one of the following):

Employees Average annual gross number of revenues

lll 50 or

fewer.

lll $1 million or less.

lll 51–

100.

lll 1,000,001–2 million.

lll 101–

250.

lll 2,000,001–3.5 million.

lll 251–

500.

lll 3,500,001–5 million.

lll 501–

750.

lll 5,000,001–10 million.

lll 751–

1,000.

lll 10,000,001–17 million.

lll Over

1,000.

lll 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 b has, b 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 b has, b has not, filed all required

compliance reports

(3) Affirmative Action Compliance. The

offeror represents that—

(i) It b has developed and has on file, b

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 b 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
Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules 11215

clause entitled ‘‘Buy American Act—Trade

Agreements—Balance of Payments Program’’:

(Insert line item numbers)

(4) Offers will be evaluated in accordance

with part 25 of the Federal Acquisition

Regulation.

(g) Buy American Act—North American

Free Trade Agreement (NAFTA)

Implementation Act—Balance of Payments

Program Certificate. (Applies only if FAR

clause 52.225–21, 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) 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—

llllll I have no information, or

llllll 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.

lllllllllllllllllllll

Signature of the officer or employee

responsible for the offer and date.

(End of Certification)

(End of Provision)

52.212–4 Contract Terms and

Conditions—Commercial Items.

As prescribed in 12.302(b)(3), insert

the following clause:

Contract Terms and Conditions—

Commercial Items (Date)

Acceptance. The Contractor shall tender to

the Government for acceptance only supplies

or services that the Contractor has inspected

in accordance with its commercial inspection

system and found to be in conformity with

contract requirements. The Government has

the right to inspect or test all supplies or

services after they have been tendered for

acceptance. Acceptance shall be conclusive

except for patent defects, latent defects,

fraud, gross mistakes amounting to fraud, or

as otherwise provided in the contract. The

Government may require correction or

replacement of nonconforming supplies or

reperformance of nonconforming services at

no increase in contract price, or require an

adjustment to the contract price to reflect the

reduced value of the nonconforming supplies

or services. Revocation of acceptance shall

occur (1) within a reasonable time after the

defect was discovered or should have been

discovered; and (2) before substantial change

occurs in the condition of the item. This

limitation does not apply to changes in

condition caused by the defect.

Assignment. The Contractor or its assignee,

may, when done in accordance with the

provisions of the Assignment of Claims Act

(31 U.S.C. 3727), assign its rights to be paid

amounts due as a result of performance of

this contract to a bank, trust company, or

other financing institution, including any

Federal lending agency.

Changes. Changes in the terms and

conditions of this contract may be made only

by written agreement of the parties.

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.

Definitions. The clause at FAR 52.202–1,

Definitions, is incorporated herein by

reference.

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.

Invoice. The Contractor shall submit an

original invoice and three copies 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.

If the invoice does not comply with these

requirements, the Contractor will be notified

of the defect within 7 days after receipt of the

invoice at the designated office.

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.

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.

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.

Risk of Loss. Unless the contract

specifically provides otherwise, risk of loss

or damage shall remain with the Contractor

until, and shall pass to the Government

upon:

(1) Delivery of the item(s) to a carrier, if

transportation is f.o.b. origin; or

(2) Acceptance by the Government or

delivery of the item(s) to the Government at

the destination specified in the contract,

whichever is later, if transportation is f.o.b.

destination.

Taxes. The contract price includes all

applicable Federal, State, and local taxes and

duties.

Termination. 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 reasonable

termination charge considering the

percentage of the contract price reflecting the
11216 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

percentage of the work performed prior to the

notice of termination, plus actual direct costs

that the Contractor can demonstrate have

resulted from the termination. The Contractor

shall not be paid for any work done after

receipt of the termination notice, nor for any

costs incurred by the Contractor’s suppliers

or subcontractors which the Contractor could

reasonably have avoided.

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, and the

Contractor shall be liable to the Government

for any and all rights and remedies provided

by law. If it should be determined that the

Government improperly terminated this

contract for default, such termination shall be

deemed a termination for convenience.

Title. Unless specified elsewhere in this

contract, title to items furnished under this

contract shall pass to the Government upon

final acceptance, regardless of when or where

the Government takes physical possession,

unless the contract specifically provides for

earlier passage of title.

Warranty. Except as expressly set forth

elsewhere in this contract and except for the

implied warranty of merchantability, there

are no warranties express or implied. In no

event will the Contractor be liable to the

Government for consequential damages

resulting from the seller’s breach including—

(a) Any loss resulting from general or

particular requirements and needs of which

the seller at the time of contracting had

reason to know and which could not

reasonably be prevented by cover or

otherwise; and

(b) Injury to person or property

proximately resulting from any breach of

warranty.

Other Compliances. The Contractor agrees

to comply with all applicable Federal, State

and local laws, executive orders, and

regulations thereunder and amendments

thereto, including, without limitation, 15

U.S.C 2601 et seq., the Federal Occupational

Safety and Health Act of 1970; 42 U.S.C.

7401 et seq., the Clean Air Act; 15 U.S.C.

2601 et seq., the Toxic Substances Control

Act; and 33 U.S.C. 1251 et seq., and the

Federal Water Pollution Control Act.

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 contracting; 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.

Order of Precedence. Any inconsistencies

in this solicitation or contract shall be

resolved by giving precedence in the

following order: (a) addenda to this

solicitation or contract; (b) solicitation

provisions; (c) contract clauses; (d) Standard

Form XXXX; (e) Other documents, exhibits,

and attachment; and (f) the specification.

(End of Clause)

52.212–5 Contract Terms and Conditions

Required to Implement Statutes or

Executive Orders—Commercial Items.

As prescribed in 12.302(b)(4), insert the

following clause:

Contract Terms and Conditions Required to

Implement Statutes or Executive Orders—

Commercial Items (Date)

(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) 52.219–8, Utilization of Small Business

Concerns and Small Disadvantaged Business

Concerns (15 U.S.C. 637 (d)(2) and (3)).

(2) 52.222–3, Convict Labor (E.O. 11755)

(3) 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 following FAR and FIRMR clauses in this

paragraph (b) that are 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:

(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) 52.219–14, Limitation on

Subcontracting (15 U.S.C. 637(a)(14)).

(4) 52.222–26, Equal Opportunity (E.O.

11246).

(5) 52.222–35, Affirmative Action for

Special Disabled and Vietnam Era Veterans

(38 U.S.C. 2012).

(6) 52.222–36, Affirmative Action for

Handicapped Workers (29 U.S.C. 793).

(7) 52.222–37, Employment Reports on

Special Disabled Veterans and Veterans of

the Vietnam Era (38 U.S.C. 2012).

(8) 52.225–3, Buy American Act—Supplies

(41 U.S.C. 10).

(9) 52.225–9, Buy American Act—Trade

Agreements Act—Balance of Payments

Program (41 U.S.C. 10, 19 U.S.C. 2501–2582).

(10) 52.225–17, Buy American Act—

Supplies Under European Community

Sanctions for End Products (E.O. 12849).

(11) 52.225–18, European Community

Sanctions for End Products (E.O. 12849).

(12) 52.225–19, European Community

Sanctions for Services (E.O. 12849).

(13) 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).

(14) 52.247–64, Preference for Privately

Owned US Flagged Commercial Vessels (46

U.S.C. 1241).

(15) 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 following FAR clauses in this paragraph

(c), applicable to commercial services, that

are 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:

(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) Notwithstanding the requirements of

the clauses in paragraphs (a), (b) or (c) of this

clause, the Contractor is not required to

include any FAR clause, other than those

listed below, in a subcontract for commercial

items or commercial components—[list of

clauses to be published in the Federal

Register in a future proposed rule under FAR

case 94–791]

(End of clause)

71. In the list of newly redesignated

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:

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)
Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules 11217

Clause/provision Remove Insert

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 ......................................................................................................................................................... 12.204(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)

72. Section 52.244–xx is added to

read as follows:

52.244–XX Subcontracts for Commercial

Items and Commercial Components

As prescribed in 44.403, insert the

following clause:

Subcontracts for Commercial Items and

Commercial Components (Date)

(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.

(b) To the maximum extent practicable, the

Contractor shall incorporate, and require its

subcontractors at all levels to incorporate,

commercial items or nondevelopmental

items other than commercial items, as

components of items to be supplied under

this contract.

(c) If in awarding a subcontract for

commercial items, an exception under

15.804–1(a) does not apply, the subcontractor

may be required to submit cost or pricing

data and comply with the appropriate clauses

prescribed in FAR part 15.

(d) Notwithstanding any other clause of

this contract, the Contractor is not required

to include any FAR provision or clause, other

than those listed below and as may be

required by paragraph (c) of this clause, in a

subcontract for commercial items or

commercial components: [list to be published

in the Federal Register in a future proposed

rule under FAR case 94–791]

(e) The Contractor shall include the terms

of this clause, including this paragraph (e), in

subcontracts awarded under this contract.

(End of clause)

PART 53—FORMS

73. Section 53.212 is added to read as

follows:

53.212 Acquisition of commercial items.

SF XXXX (XX/95), Solicitation/

Contract/Order for Commercial Items.

SF XXXX is prescribed for use in

solicitations and contracts for

commercial items. Agencies may

prescribe additional detailed

instructions for use of the form.

53.301 [Amended]

74. Section 53.301–xxxx is added to

read as follows:

SF XXXX (xx/95), Solicitation/

Contract/Order for Commercial Items.

BILLING CODE 6820–34D–M
11218 Federal Register / Vol. 60, No. 40 / Wednesday, March 1, 1995 / Proposed Rules

[FR Doc. 95–4535 Filed 2–28–95; 8:45 am]

BILLING CODE 6820–34D–C