297
‘‘(B) Any item of supply described in sub-
paragraph (A) that requires only minor modi-
fication or modification of the type customarily
available in the commercial marketplace in order
to meet the requirements of the procuring depart-
ment or agency.
‘‘(C) Any item of supply currently being
produced that does not meet the requirements of
subparagraph (A) or (B) solely because the
item—
‘‘(i) is not yet in use; or
‘‘(ii) is not yet available in the com-
mercial marketplace.
‘‘(3) The term ‘component’ means any item sup-
plied to the Federal Government as part of an end
item or of another component.
‘‘(4) The term ‘commercial component’ means
any component that is a commercial item.
‘‘(5) The term ‘head of an agency’ means the
Secretary of Defense, the Secretary of Transportation,
and the Administrator of the National Aeronautics
and Space Administration.
‘‘(6) The term ‘agency’ means the Department of
Defense, the Coast Guard, and the National Aero-
nautics and Space Administration.’’.
298
SEC. 7003. PREFERENCE FOR ACQUISITION OF COMMER-
CIAL ITEMS.
(a) IN GENERAL.—Chapter 136 of title 10, United
States Code, as amended by section 7002, is further amend-
ed by adding after section 2281 the following new section:
‘‘§ 2282. Preference for acquisition of commercial
items
‘‘(a) PREFERENCE.—(1) The head of an agency shall
ensure that, to the maximum extent practicable—
‘‘(A) requirements of the agency with respect to
a procurement of supplies are stated in terms of—
‘‘(i) functions to be performed,
‘‘(ii) performance required, or
‘‘(iii) essential physical characteristics;
‘‘(B) such requirements are defined so that com-
mercial items may be procured to fulfill such require-
ments; and
‘‘(C) such requirements are fulfilled through the
procurement of commercial items.
‘‘(2) The head of an agency shall ensure that, to the
maximum extent practicable, requirements of the agency
with respect to a procurement of supplies are defined so
that nondevelopmental items may be procured to fulfill such
requirements in any case in which commercial items that
fulfill the requirements of the agency are not available.
299
‘‘(b) IMPLEMENTATION.—The head of each agency shall
ensure that procurement officials in the agency, to the max-
imum extent practicable—
‘‘(1) acquire commercial items to meet the needs
of the agency;
‘‘(2) require prime contractors and subcontrac-
tors at all levels under the contracts of the agency to
incorporate commercial items as components of items
supplied to the agency;
‘‘(3) modify requirements in appropriate cases to
ensure that the requirements can be met by commer-
cial items;
‘‘(4) state specifications in terms that enable and
encourage bidders and offerors to supply commercial
items in response to the solicitations of the agency;
‘‘(5) revise the procurement policies, practices,
and procedures of the agency that are not required by
law to reduce any impediments in those policies,
practices, and procedures to the acquisition of com-
mercial items; and
‘‘(6) require training of appropriate personnel in
the acquisition of commercial items.
‘‘(c) 
EXISTING
OR
PRIOR
SOURCES
OF
NONDEVELOPMENTAL ITEMS.—(1) Notwithstanding sub-
section (a), the Secretary of Defense, the Secretary of a mili-
300
tary department, or the head of a Defense Agency may,
until five years after the date of the enactment of the Fed-
eral Acquisition Improvement Act of 1994, determine that
it is in the Government’s interests to permit existing or
prior sources of nondevelopmental items to participate in
a competition for a commercial item in a case in which
a nondevelopmental item will compete with a commercial
item under the same terms, conditions, and evaluation and
award criteria.
‘‘(2) Nondevelopmental items furnished by an existing
or prior source that must be modified to meet the require-
ments of a solicitation for commercial items may be offered
under such a solicitation, but only in a case in which the
modifications—
‘‘(A) are necessary to comply with the Govern-
ment’s solicitation requirements; and
‘‘(B) do not significantly alter the function or es-
sential physical characteristics of the items to be sup-
plied.
‘‘(3) The policies, procedures, solicitation provisions,
and contract clauses applicable to commercial items under
this chapter also shall apply to nondevelopmental items fur-
nished by an existing or prior source that is permitted to
participate in a competition conducted under this title.
301
‘‘(d) PRELIMINARY MARKET RESEARCH.—(1) The
head of an agency shall conduct market research appro-
priate to the circumstances—
‘‘(A) before developing new specifications for a
procurement by the agency; and
‘‘(B) before soliciting bids or proposals for a con-
tract in excess of the simplified acquisition threshold.
‘‘(2) The head of the agency shall use the results of
market research to determine whether there are commercial
items available that—
‘‘(A) meet the requirements of the agency;
‘‘(B) could be modified to meet such require-
ments; or
‘‘(C) could meet such requirements if those re-
quirements were modified to a reasonable extent.’’.
(b) REPEAL
OF SUPERSEDED PROVISION.—Section
2325 of title 10, United States Code, is repealed. The table
of sections at the beginning of chapter 137 of such title is
amended by striking out the item relating to section 2325.
SEC. 7004. PRICING DOCUMENTATION FOR COMMERCIAL
ITEMS.
(a) IN GENERAL.—Chapter 136 of title 10, United
States Code, as amended by section 7003, is further amend-
ed by adding after section 2282 the following new section:
302
‘‘§ 2283. Pricing documentation for commercial items
‘‘(a) REQUIREMENT FOR DETERMINATION OF PRICE
REASONABLENESS.—(1) When the price of a commercial
item is based on adequate price competition or on estab-
lished catalog or market prices of items sold in sufficient
quantities to the general public, the contracting officer shall
presume that the price contained in the most advantageous
evaluated offer (price and all other factors considered) re-
ceived in response to a solicitation, or a price based on es-
tablished catalog or market prices, is fair and reasonable
unless the contracting officer has information that the price
is not fair and reasonable. Before the award of a contract
for which price is based on catalog or market prices, the
contracting officer shall make reasonable efforts to establish
the currency and accuracy of such prices.
‘‘(2) When the price of a commercial item is not pre-
sumed fair and reasonable under paragraph (1), the con-
tracting officer shall use price analysis to determine wheth-
er the price is fair and reasonable.
‘‘(3) When required by the contracting officer before
award of a contract or contract definitization, the offeror
shall promptly furnish documentation, in the form regu-
larly maintained in commercial operations, adequate to
demonstrate the market price of the item or items or other-
wise needed to establish a fair and reasonable price. All doc-
umentation received from an offeror, if not otherwise in the