(ii) the time and place for submission of proposals. 
(c) EVALUATION FACTORS.— 
(1) IN GENERAL.—In prescribing the evaluation factors to be in-
cluded in each solicitation for competitive proposals, an executive agen-
cy shall— 
(A) establish clearly the relative importance assigned to the 
evaluation factors and subfactors, including the quality of the 
product or services to be provided (including technical capability, 
management capability, prior experience, and past performance of 
the offeror); 
(B) include cost or price to the Federal Government as an eval-
uation factor that must be considered in the evaluation of pro-
posals; and 
(C) disclose to offerors whether all evaluation factors other than 
cost or price, when combined, are— 
(i) significantly more important than cost or price; 
(ii) approximately equal in importance to cost or price; or 
(iii) significantly less important than cost or price. 
(2) RESTRICTION
ON
IMPLEMENTING
REGULATIONS.—Regulations 
implementing paragraph (1)(C) may not define the terms ‘‘significantly 
more important’’ and ‘‘significantly less important’’ as specific numeric 
weights that would be applied uniformly to all solicitations or a class 
of solicitations. 
(d) ADDITIONAL INFORMATION IN SOLICITATION.—This section does not 
prohibit an executive agency from— 
(1) providing additional information in a solicitation, including nu-
meric weights for all evaluation factors and subfactors on a case-by- 
case basis; or 
(2) stating in a solicitation that award will be made to the offeror 
that meets the solicitation’s mandatory requirements at the lowest cost 
or price. 
(e) LIMITATION ON EVALUATION OF PURCHASE OPTIONS.—An executive 
agency, in issuing a solicitation for a contract to be awarded using sealed 
bid procedures, may not include in the solicitation a clause providing for the 
evaluation of prices for options to purchase additional property or services 
under the contract unless the executive agency has determined that there 
is a reasonable likelihood that the options will be exercised. 
(f) AUTHORIZATION
OF TELECOMMUTING
FOR FEDERAL CONTRAC-
TORS.— 
(1) DEFINITION.—In this subsection, the term ‘‘executive agency’’ 
has the meaning given that term in section 133 of this title. 
VerDate Aug 31 2005 
22:59 Jun 06, 2006
Jkt 049200
PO 00000
Frm 00080
Fmt 6652
Sfmt 6221
E:\BILLS\H5414.IH
H5414
sroberts on PROD1PC70 with BILLS
(2) FEDERAL
ACQUISITION
REGULATION
TO
ALLOW
TELECOM-
MUTING.—The Federal Acquisition Regulation issued in accordance 
with sections 1121(b) and 1303(a)(1) of this title shall permit telecom-
muting by employees of Federal Government contractors in the per-
formance of contracts entered into with executive agencies. 
(3) SCOPE OF ALLOWANCE.—The Federal Acquisition Regulation at 
a minimum shall provide that a solicitation for the acquisition of prop-
erty or services may not set forth any requirement or evaluation cri-
teria that would— 
(A) render an offeror ineligible to enter into a contract on the 
basis of the inclusion of a plan of the offeror to allow the offeror’s 
employees to telecommute, unless the contracting officer concerned 
first determines that the requirements of the agency, including se-
curity requirements, cannot be met if telecommuting is allowed 
and documents in writing the basis for the determination; or 
(B) reduce the scoring of an offer on the basis of the inclusion 
in the offer of a plan of the offeror to allow the offeror’s employ-
ees to telecommute, unless the contracting officer concerned first 
determines that the requirements of the agency, including security 
requirements, would be adversely impacted if telecommuting is al-
lowed and documents in writing the basis for the determination. 
§ 3306. Preference for commercial items 
(a) RELATIONSHIP OF PROVISIONS OF LAW TO PROCUREMENT OF COM-
MERCIAL ITEMS.— 
(1) THIS PART.—Unless otherwise specifically provided, all other 
provisions in this part also apply to the procurement of commercial 
items. 
(2) LAWS LISTED IN FEDERAL ACQUISITION REGULATION.—A con-
tract for the procurement of a commercial item entered into by the 
head of an executive agency is not subject to a law properly listed in 
the Federal Acquisition Regulation pursuant to section 1906 of this 
title. 
(b) PREFERENCE.—The head of each executive agency shall ensure that, 
to the maximum extent practicable— 
(1) requirements of the executive agency with respect to a procure-
ment of supplies or services are stated in terms of— 
(A) functions to be performed; 
(B) performance required; or 
(C) essential physical characteristics; 
(2) those requirements are defined so that commercial items or, to 
the extent that commercial items suitable to meet the executive agen-
VerDate Aug 31 2005 
22:59 Jun 06, 2006
Jkt 049200
PO 00000
Frm 00081
Fmt 6652
Sfmt 6221
E:\BILLS\H5414.IH
H5414
sroberts on PROD1PC70 with BILLS
cy’s needs are not available, nondevelopmental items other than com-
mercial items may be procured to fulfill those requirements; and 
(3) offerors of commercial items and nondevelopmental items other 
than commercial items are provided an opportunity to compete in any 
procurement to fill those requirements. 
(c) IMPLEMENTATION.—The head of each executive agency shall ensure 
that procurement officials in that executive agency, to the maximum extent 
practicable— 
(1) acquire commercial items or nondevelopmental items other than 
commercial items to meet the needs of the executive agency; 
(2) require that prime contractors and subcontractors at all levels 
under contracts of the executive agency incorporate commercial items 
or nondevelopmental items other than commercial items as components 
of items supplied to the executive agency; 
(3) modify requirements in appropriate cases to ensure that the re-
quirements can be met by commercial items or, to the extent that com-
mercial items suitable to meet the executive agency’s needs are not 
available, nondevelopmental items other than commercial items; 
(4) state specifications in terms that enable and encourage bidders 
and offerors to supply commercial items or, to the extent that commer-
cial items suitable to meet the executive agency’s needs are not avail-
able, nondevelopmental items other than commercial items in response 
to the executive agency solicitations; 
(5) revise the executive agency’s procurement policies, practices, and 
procedures not required by law to reduce any impediments in those 
policies, practices, and procedures to the acquisition of commercial 
items; and 
(6) require training of appropriate personnel in the acquisition of 
commercial items. 
(d) MARKET RESEARCH.— 
(1) WHEN TO BE USED.—The head of an executive agency shall con-
duct market research appropriate to the circumstances— 
(A) before developing new specifications for a procurement by 
that executive agency; and 
(B) before soliciting bids or proposals for a contract in excess 
of the simplified acquisition threshold. 
(2) USE OF RESULTS.—The head of an executive agency shall use 
the results of market research to determine whether commercial items 
or, to the extent that commercial items suitable to meet the executive 
agency’s needs are not available, nondevelopmental items other than 
commercial items are available that— 
VerDate Aug 31 2005 
22:59 Jun 06, 2006
Jkt 049200
PO 00000
Frm 00082
Fmt 6652
Sfmt 6221
E:\BILLS\H5414.IH
H5414
sroberts on PROD1PC70 with BILLS
(A) meet the executive agency’s requirements; 
(B) could be modified to meet the executive agency’s require-
ments; or 
(C) could meet the executive agency’s requirements if those re-
quirements were modified to a reasonable extent. 
(3) ONLY MINIMUM INFORMATION REQUIRED TO BE SUBMITTED.— 
In conducting market research, the head of an executive agency should 
not require potential sources to submit more than the minimum infor-
mation that is necessary to make the determinations required in para-
graph (2). 
(e) REGULATIONS.— 
(1) IN GENERAL.—The Federal Acquisition Regulation shall provide 
regulations to implement this section, sections 102, 103, 105, and 110 
of this title, and chapter 140 of title 10. 
(2) CONTRACT CLAUSES.— 
(A) DEFINITION.—In this paragraph, the term ‘‘subcontract’’ 
includes a transfer of commercial items between divisions, subsidi-
aries, or affiliates of a contractor or subcontractor. 
(B) LIST OF CLAUSES TO BE INCLUDED.—The regulations pre-
scribed under paragraph (1) shall contain a list of contract clauses 
to be included in contracts for the acquisition of commercial end 
items. To the maximum extent practicable, the list shall include 
only those contract clauses that are— 
(i) required to implement provisions of law or executive or-
ders applicable to acquisitions of commercial items or com-
mercial components; or 
(ii) determined to be consistent with standard commercial 
practice. 
(C) REQUIREMENTS OF PRIME CONTRACTOR.—The regulations 
shall provide that the Federal Government shall not require a 
prime contractor to apply to any of its divisions, subsidiaries, af-
filiates, subcontractors, or suppliers that are furnishing commer-
cial items any contract clause except those that are— 
(i) required to implement provisions of law or executive or-
ders applicable to subcontractors furnishing commercial items 
or commercial components; or 
(ii) determined to be consistent with standard commercial 
practice. 
(D) CLAUSES THAT MAY BE USED IN A CONTRACT.—To the 
maximum extent practicable, only the contract clauses listed pur-
suant to subparagraph (B) may be used in a contract, and only 
VerDate Aug 31 2005 
22:59 Jun 06, 2006
Jkt 049200
PO 00000
Frm 00083
Fmt 6652
Sfmt 6221
E:\BILLS\H5414.IH
H5414
sroberts on PROD1PC70 with BILLS
the contract clauses referred to in subparagraph (C) may be re-
quired to be used in a subcontract, for the acquisition of commer-
cial items or commercial components by or for an executive agen-
cy. 
(E) WAIVER OF CONTRACT CLAUSES.—The Federal Acquisition 
Regulation shall provide standards and procedures for waiving the 
use of contract clauses required pursuant to subparagraph (B), 
other than those required by law, including standards for deter-
mining the cases in which a waiver is appropriate. 
(3) MARKET ACCEPTANCE.— 
(A) REQUIREMENT
OF
OFFERORS.—The Federal Acquisition 
Regulation shall provide that under appropriate conditions the 
head of an executive agency may require offerors to demonstrate 
that the items offered— 
(i) have achieved commercial market acceptance or been 
satisfactorily supplied to an executive agency under current or 
recent contracts for the same or similar requirements; and 
(ii) otherwise meet the item description, specifications, or 
other criteria prescribed in the public notice and solicitation 
relating to the contract. 
(B) REGULATION TO PROVIDE GUIDANCE ON CRITERIA.—The 
Federal Acquisition Regulation shall provide guidance to ensure 
that the criteria for determining commercial market acceptance in-
clude the consideration of— 
(i) the minimum needs of the executive agency concerned; 
and 
(ii) the entire relevant commercial market, including small 
businesses. 
(4) PROVISIONS RELATING TO TYPES OF CONTRACTS.— 
(A) TYPES OF CONTRACTS THAT MAY BE USED.—The Federal 
Acquisition Regulation shall include, for acquisitions of commercial 
items— 
(i) a requirement that firm, fixed price contracts or fixed 
price with economic price adjustment contracts be used to the 
maximum extent practicable; 
(ii) a prohibition on use of cost type contracts; and 
(iii) subject to subparagraph (B), authority for use of a 
time-and-materials or labor-hour contract for the procurement 
of commercial services that are commonly sold to the general 
public through those contracts and are purchased by the pro-
curing agency on a competitive basis. 
VerDate Aug 31 2005 
22:59 Jun 06, 2006
Jkt 049200
PO 00000
Frm 00084
Fmt 6652
Sfmt 6221
E:\BILLS\H5414.IH
H5414
sroberts on PROD1PC70 with BILLS
(B) WHEN TIME-AND-MATERIALS OR LABOR-HOUR CONTRACT 
MAY BE USED.—A time-and-materials or labor-hour contract may 
be used pursuant to the authority referred to in subparagraph 
(A)(iii)— 
(i) only for a procurement of commercial services in a cat-
egory of commercial services described in subparagraph (C); 
and 
(ii) only if the contracting officer for the procurement— 
(I) executes a determination and findings that no 
other contract type is suitable; 
(II) includes in the contract a ceiling price that the 
contractor exceeds at its own risk; and 
(III) authorizes a subsequent change in the ceiling 
price only on a determination, documented in the con-
tract file, that it is in the best interest of the procuring 
agency to change the ceiling price. 
(C) CATEGORIES OF COMMERCIAL SERVICES.—The categories of 
commercial services referred to in subparagraph (B) are as fol-
lows: 
(i) Commercial services procured for support of a commer-
cial item, as described in section 103(5) of this title. 
(ii) Any other category of commercial services that the Ad-
ministrator for Federal Procurement Policy designates in the 
Federal Acquisition Regulation for the purposes of this sub-
paragraph on the basis that— 
(I) the commercial services in the category are of a 
type of commercial services that are commonly sold to 
the general public through use of time-and-materials or 
labor-hour contracts; and 
(II) it would be in the best interests of the Federal 
Government to authorize use of time-and-materials or 
labor-hour contracts for purchases of the commercial 
services in the category. 
(5) CONTRACT
QUALITY
REQUIREMENTS.—Regulations prescribed 
under paragraph (1) shall include provisions that— 
(A) allow, to the maximum extent practicable, a contractor 
under a commercial items acquisition to use the existing quality 
assurance system of the contractor as a substitute for compliance 
with an otherwise applicable requirement for the Federal Govern-
ment to inspect or test the commercial items before the contrac-
VerDate Aug 31 2005 
22:59 Jun 06, 2006
Jkt 049200
PO 00000
Frm 00085
Fmt 6652
Sfmt 6221
E:\BILLS\H5414.IH
H5414
sroberts on PROD1PC70 with BILLS
tor’s tender of those items for acceptance by the Federal Govern-
ment; 
(B) require that, to the maximum extent practicable, the execu-
tive agency take advantage of warranties (including extended war-
ranties) offered by offerors of commercial items and use those 
warranties for the repair and replacement of commercial items; 
and 
(C) set forth guidance regarding the use of past performance of 
commercial items and sources as a factor in contract award deci-
sions. 
§ 3307. Planning for future competition in contracts for 
major systems 
(a) DEVELOPMENT CONTRACT.— 
(1) DETERMINING WHETHER PROPOSALS ARE NECESSARY.—In pre-
paring a solicitation for the award of a development contract for a 
major system, the head of an agency shall consider requiring in the so-
licitation that an offeror include in its offer proposals described in 
paragraph (2). In determining whether to require the proposals, the 
head of the agency shall consider the purposes for which the system 
is being procured and the technology necessary to meet the system’s 
required capabilities. If the proposals are required, the head of the 
agency shall consider them in evaluating the offeror’s price. 
(2) CONTENTS OF PROPOSALS.—The proposals that the head of an 
agency is to consider requiring in a solicitation for the award of a de-
velopment contract are the following: 
(A) Proposals to incorporate in the design of the major system 
items that are currently available within the supply system of the 
Federal agency responsible for the major system, available else-
where in the national supply system, or commercially available 
from more than one source. 
(B) With respect to items that are likely to be required in sub-
stantial quantities during the system’s service life, proposals to in-
corporate in the design of the major system items that the Federal 
Government will be able to acquire competitively in the future. 
(b) PRODUCTION CONTRACT.— 
(1) DETERMINING WHETHER PROPOSALS ARE NECESSARY.—In pre-
paring a solicitation for the award of a production contract for a major 
system, the head of an agency shall consider requiring in the solicita-
tion that an offeror include in its offer proposals described in para-
graph (2). In determining whether to require the proposals, the head 
of the agency shall consider the purposes for which the system is being 
VerDate Aug 31 2005 
22:59 Jun 06, 2006
Jkt 049200
PO 00000
Frm 00086
Fmt 6652
Sfmt 6221
E:\BILLS\H5414.IH
H5414
sroberts on PROD1PC70 with BILLS
procured and the technology necessary to meet the system’s required 
capabilities. If the proposals are required, the head of the agency shall 
consider them in evaluating the offeror’s price. 
(2) CONTENT OF PROPOSALS.—The proposals that the head of an 
agency is to consider requiring in a solicitation for the award of a pro-
duction contract are proposals identifying opportunities to ensure that 
the Federal Government will be able to obtain on a competitive basis 
items procured in connection with the system that are likely to be re-
procured in substantial quantities during the service life of the system. 
Proposals submitted in response to this requirement may include the 
following: 
(A) Proposals to provide to the Federal Government the right 
to use technical data to be provided under the contract for com-
petitive reprocurement of the item, together with the cost to the 
Federal Government of acquiring the data and the right to use the 
data. 
(B) Proposals for the qualification or development of multiple 
sources of supply for the item. 
(c) CONSIDERATION OF FACTORS AS OBJECTIVES IN NEGOTIATIONS.— 
If the head of an agency is making a noncompetitive award of a develop-
ment contract or a production contract for a major system, the factors spec-
ified in subsections (a) and (b) to be considered in evaluating an offer for 
a contract may be considered as objectives in negotiating the contract to 
be awarded. 
§ 3308. Design-build selection procedures 
(a) AUTHORIZATION.—Unless the traditional acquisition approach of de-
sign-bid-build established under sections 1101 to 1104 of title 40 or another 
acquisition procedure authorized by law is used, the head of an executive 
agency shall use the two-phase selection procedures authorized in this sec-
tion for entering into a contract for the design and construction of a public 
building, facility, or work when a determination is made under subsection 
(b) that the procedures are appropriate for use. 
(b) CRITERIA FOR USE.—A contracting officer shall make a determina-
tion whether two-phase selection procedures are appropriate for use for en-
tering into a contract for the design and construction of a public building, 
facility, or work when— 
(1) the contracting officer anticipates that 3 or more offers will be 
received for the contract; 
(2) design work must be performed before an offeror can develop a 
price or cost proposal for the contract; 
VerDate Aug 31 2005 
22:59 Jun 06, 2006
Jkt 049200
PO 00000
Frm 00087
Fmt 6652
Sfmt 6221
E:\BILLS\H5414.IH
H5414
sroberts on PROD1PC70 with BILLS
(3) the offeror will incur a substantial amount of expense in pre-
paring the offer; and 
(4) the contracting officer has considered information such as the 
following: 
(A) The extent to which the project requirements have been 
adequately defined. 
(B) The time constraints for delivery of the project. 
(C) The capability and experience of potential contractors. 
(D) The suitability of the project for use of the two-phase selec-
tion procedures. 
(E) The capability of the agency to manage the two-phase selec-
tion process. 
(F) Other criteria established by the agency. 
(c) PROCEDURES DESCRIBED.—Two-phase selection procedures consist of 
the following: 
(1) DEVELOPMENT OF SCOPE OF WORK STATEMENT.—The agency 
develops, either in-house or by contract, a scope of work statement for 
inclusion in the solicitation that defines the project and provides pro-
spective offerors with sufficient information regarding the Federal Gov-
ernment’s requirements (which may include criteria and preliminary de-
sign, budget parameters, and schedule or delivery requirements) to en-
able the offerors to submit proposals that meet the Federal Govern-
ment’s needs. If the agency contracts for development of the scope of 
work statement, the agency shall contract for architectural and engi-
neering services as defined by and in accordance with sections 1101 to 
1104 of title 40. 
(2) SOLICITATION OF PHASE-ONE PROPOSALS.—The contracting offi-
cer solicits phase-one proposals that— 
(A) include information on the offeror’s— 
(i) technical approach; and 
(ii) technical qualifications; and 
(B) do not include— 
(i) detailed design information; or 
(ii) cost or price information. 
(3) EVALUATION FACTORS.—The evaluation factors to be used in 
evaluating phase-one proposals are stated in the solicitation and include 
specialized experience and technical competence, capability to perform, 
past performance of the offeror’s team (including the architect-engineer 
and construction members of the team), and other appropriate factors, 
except that cost-related or price-related evaluation factors are not per-
mitted. Each solicitation establishes the relative importance assigned to 
VerDate Aug 31 2005 
22:59 Jun 06, 2006
Jkt 049200
PO 00000
Frm 00088
Fmt 6652
Sfmt 6221
E:\BILLS\H5414.IH
H5414
sroberts on PROD1PC70 with BILLS