10 U.S.C. § 2377 (ARMED FORCES)
§ 2377. Preference for acquisition of commercial items
(a) Preference.—
The head of an agency shall ensure that, to the maximum extent practicable—
(1) requirements of the agency with respect to a procurement of supplies or services are stated in terms of—
(A) functions to be performed;
(B) performance required; or
(C) essential physical characteristics;
(2) such requirements are defined so that 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, may be procured to fulfill such 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 such requirements.
(b) Implementation.—
The head of an agency shall ensure that procurement officials in that agency, to the maximum extent practicable—
(1) acquire commercial items or nondevelopmental items other than commercial items to meet the needs of the agency;
(2) 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;
(3) 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;
(4) state specifications in terms that enable and encourage bidders and 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;
(5) revise the 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.
(c) Preliminary Market Research.—
(1) The head of an agency shall conduct market research appropriate to the circumstances—
(A) before developing new specifications for a procurement by that agency;
(B) before soliciting bids or proposals for a contract in excess of the simplified acquisition threshold; and
(C) before awarding a task order or delivery order in excess of the simplified acquisition threshold.
(2) The head of an agency shall use the results of market research to determine whether there are 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 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.
(3) In conducting market research, the head of an agency should not require potential sources to submit more than the minimum information that is necessary to make the determinations required in paragraph (2).
(4) The head of an agency shall take appropriate steps to ensure that any prime contractor of a contract (or task order or delivery order) in an amount in excess of $5,000,000 for the procurement of items other than commercial items engages in such market research as may be necessary to carry out the requirements of subsection (b)(2) before making purchases for or on behalf of the Department of Defense.
(d) Market Research Training Required.—
The Secretary of Defense shall provide mandatory training for members of the armed forces and employees of the Department of Defense responsible for the conduct of market research required under subsection (c). Such mandatory training shall, at a minimum—
(1) provide comprehensive information on the subject of market research and the function of market research in the acquisition of commercial items;
(2) teach best practices for conducting and documenting market research; and
(3) provide methodologies for establishing standard processes and reports for collecting and sharing market research across the Department.
(Added Pub. L. 103–355, title VIII, § 8104(a), Oct. 13, 1994, 108 Stat. 3390; amended Pub. L. 110–181, div. A, title VIII, § 826(a), Jan. 28, 2008, 122 Stat. 227; Pub. L. 114–92, div. A, title VIII, § 844(a), Nov. 25, 2015, 129 Stat. 915.)
heading: Amendments
text: 2015—Subsec. (d). Pub. L. 114–92 added subsec. (d).
2008—Subsec. (c)(1)(C). Pub. L. 110–181, § 826(a)(1), added subpar. (C).
Subsec. (c)(4). Pub. L. 110–181, § 826(a)(2), added par. (4).
heading: Incorporation Into Management Certification Training Mandate
text: Pub. L. 114–92, div. A, title VIII, § 844(b), Nov. 25, 2015, 129 Stat. 915, provided that: “The Chairman of the Joint Chiefs of Staff shall ensure that the requirements of section 2377(d) of title 10, United States Code, as added by subsection (a), are incorporated into the requirements management certification training mandate of the Joint Capabilities Integration Development System.”
heading: Market Research and Preference for Commercial Items
text: Pub. L. 114–92, div. A, title VIII, § 855, Nov. 25, 2015, 129 Stat. 919, provided that:
“(a) Guidance Required.—
Not later than 90 days after the date of the enactment of this Act [Nov. 25, 2015], the Under Secretary of Defense for Acquisition, Technology, and Logistics shall issue guidance to ensure that acquisition officials of the Department of Defense fully comply with the requirements of section 2377 of title 10, United States Code, regarding market research and commercial items. The guidance issued pursuant to this subsection shall, at a minimum—
“(1) provide that the head of an agency may not enter into a contract in excess of the simplified acquisition threshold for information technology products or services that are not commercial items unless the head of the agency determines in writing that no commercial items are suitable to meet the agency’s needs as provided in subsection (c)(2) of such section; and
“(2) ensure that market research conducted in accordance with subsection (c) of such section is used, where appropriate, to inform price reasonableness determinations.
“(b) Review Required.—
Not later than 180 days after the date of the enactment of this Act [Nov. 25, 2015], the Chairman and the Vice Chairman of the Joint Chiefs of Staff, in consultation with the Under Secretary of Defense for Acquisition, Technology, and Logistics, shall review Chairman of the Joint Chiefs of Staff Instruction 3170.01, the Manual for the Operation of the Joint Capabilities Integration and Development System, and other documents governing the requirements development process and revise these documents as necessary to ensure that the Department of Defense fully complies with the requirement in section 2377(c) of title 10, United States Code, and section 10.001 of the Federal Acquisition Regulation for Federal agencies to conduct appropriate market research before developing new requirements.
“(c) Market Research Defined.—
For the purposes of this section, the term ‘market research’ means a review of existing systems, subsystems, capabilities, and technologies that are available or could be made available to meet the needs of the Department of Defense in whole or in part. The review may include any of the techniques for conducting market research provided in section 10.002(b)(2) of the Federal Acquisition Regulation and shall include, at a minimum, contacting knowledgeable individuals in Government and industry regarding existing market capabilities.”
heading: Limitation on Conversion of Procurements From Commercial Acquisition Procedures
text: Pub. L. 114–92, div. A, title VIII, § 856, Nov. 25, 2015, 129 Stat. 920, provided that:
“(a) Limitation.—
“(1) In general.—
Except as provided in paragraph (2), prior to converting the procurement of commercial items or services valued at more than $1,000,000 from commercial acquisition procedures under part 12 of the Federal Acquisition Regulation to noncommercial acquisition procedures under part 15 of the Federal Acquisition Regulation, the contracting officer for the procurement shall determine in writing that—
“(A) the earlier use of commercial acquisition procedures under part 12 of the Federal Acquisition Regulation was in error or based on inadequate information; and
“(B) the Department of Defense will realize a cost savings compared to the cost of procuring a similar quantity or level of such item or service using commercial acquisition procedures.
“(2) Requirement for approval of determination by head of contracting activity.—
In the case of a procurement valued at more than $100,000,000, a contract may not be awarded pursuant to a conversion of the procurement described in paragraph (1) until—
“(A) the head of the contracting activity approves the determination made under paragraph (1); and
“(B) a copy of the determination so approved is provided to the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics.
“(b) Factors to Be Considered.—
In making a determination under paragraph (1), the determining official shall, at a minimum, consider the following factors:
“(1) The estimated cost of research and development to be performed by the existing contractor to improve future products or services.
“(2) The transaction costs for the Department of Defense and the contractor in assessing and responding to data requests to support a conversion to noncommercial acquisition procedures.
“(3) Changes in purchase quantities.
“(4) Costs associated with potential procurement delays resulting from the conversion.
“(c) Procedures.—
Not later than 180 days after the date of the enactment of this Act [Nov. 25, 2015], the Secretary of Defense shall develop procedures to track conversions of future contracts and subcontracts for improved analysis and reporting and shall revise the Defense Federal Acquisition Regulation Supplement to reflect the requirement in subsection (a).
“(d) Reporting Requirement.—
Not later than one year after the date of the enactment of this Act, the Secretary of Defense shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the implementation of subsection (a), including any procurements converted as described in that subsection.
“(e) Sunset.—
The requirements of this section shall terminate 5 years after the date of the enactment of this Act [Nov. 25, 2015].”
heading: Commercial Software Reuse Preference
text: Pub. L. 110–417, [div. A], title VIII, § 803, Oct. 14, 2008, 122 Stat. 4519, provided that:
“(a) In General.—
The Secretary of Defense shall ensure that contracting officials identify and evaluate, at all stages of the acquisition process (including concept refinement, concept decision, and technology development), opportunities for the use of commercial computer software and other non-developmental software.
“(b) Report.—
Not later than 270 days after the date of enactment of this Act [Oct. 14, 2008], the Secretary shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on actions taken to implement subsection (a), including a description of any relevant regulations and policy guidance.”
heading: Requirement To Develop Training and Tools
text: Pub. L. 110–181, div. A, title VIII, § 826(b), Jan. 28, 2008, 122 Stat. 228, provided that: “The Secretary of Defense shall develop training to assist contracting officers, and market research tools to assist such officers and prime contractors, in performing appropriate market research as required by subsection (c) of section 2377 of title 10, United States Code, as amended by this section.”