Source: https://www.federalregister.gov/documents/2009/01/15/E9-551/federal-acquisition-regulation-far-case-2000-305-commercially-available-off-the-shelf-cots-items
Timestamp: 2016-09-27 10:30:12
Document Index: 366372173

Matched Legal Cases: ['art 25', 'art 25', 'art 25', '§\u2009418', '§\u20092320', '§\u2009255', '§\u2009793', 'art2', 'art3', 'art4', 'art5', 'art6', 'art 12', 'art7', 'art8', 'art9', 'art10', 'art11', 'art12', 'art13', 'art14', 'art15', 'art16', 'art17', 'art18', 'art19', 'art20', 'art21', 'art22', 'art23', 'art24', 'art25']

:: Federal Acquisition Regulation; FAR Case 2000-305, Commercially Available Off-the-Shelf (COTS) Items
E9-551
https://www.federalregister.gov/d/E9-551
The Councils have clarified that the words “of supply” include Start Printed Page 2714“construction material”. Although the definition of “construction materials” states that they are “supplies”, FAR Part 25 distinguishes between Buy American Act—Supplies (FAR Subpart 25.1) and Buy American Act—Construction materials (FAR Subpart 25.2). Therefore, this clarification is beneficial. The OFPP memorandum, dated February 14, 2008, specifically mentions waiver of the component test at 41 U.S.C. 10a (supply) and 10b (construction.)
nlimited Government rights in data for operation, maintenance, installation, or training; and
h. Truth in Negotiations Act, 41 U.S.C. 254(d) and 10 U.S.C. 2306a.Start Printed Page 2715
Indication of the new waiver at FAR 25.101 (Buy American Act—Supplies, General) and FAR 25.201, (Buy Start Printed Page 2716American Act—Construction Materials, Policy).
Rights in Technical Data (41 U.S.C. § 418a and 10 U.S.C. § 2320).
For example, the Government is prohibited from requiring contractors to provide the Government with detailed design data, and from requiring the contractors to relinquish proprietary rights in data related to proprietary or commercial technologies, as a condition of contract award (see 418a(a), and 2320(a)(2)(F)). Additionally, the DoD scheme specifically and expressly addresses the rights in data related to technologies developed in whole or in part at private expense (2320(a)(2)(B) & (C)), and the civilian statutes requires the regulations to address these funding scenarios (418a(c)(1)). Both statutory schemes also recognize the special requirements under the Small Business Innovation Research (SBIR) program, which allow the small business to treat even 100 percent Government-funded technologies as proprietary for certain periods.
All of these considerations demonstrate that the statutory schemes Start Printed Page 2717are designed to balance Government and private interests in all such acquisitions, and thus should not be waived in their entirety for COTS item acquisitions.
One respondent supported waiving the restriction on the basis that it would permit the Government to follow the common business practice of “payment due upon receipt.” Another respondent supported waiving the restriction because it also believes that it is common business practice to make payment for IT support packages at the beginning of the term. The respondent that opposed the waiver of the statute Start Printed Page 2718was concerned that contracting officers will be faced with demands for advance payments for routine COTS purchases.
This statute prohibits, except in certain circumstances, payment in excess of the value of supplies or services already delivered or provided. 31 U.S.C. 3324(b) provides that an advance of public money may be made only if it is authorized by a specific appropriation or other law or as authorized by the President in some circumstances. 41 U.S.C. 255(f) and 10 U.S.C. 2307(f) provide some authority for advance payments for commercial items, but treat this as Government financing and require the Government to obtain adequate security. It was determined that a permanent waiver is not necessary because 41 U.S.C. § 255(f) (as implemented by FAR 32.2, Commercial Item Purchase Financing, specifically FAR 32.202-4(a)(2)) already authorizes advance payments for commercial item acquisitions, and agencies have the authority to waive, if it is in the best of the Government.
Response: This statute was enacted as part of Pub. L. 98-577, which was intended by Congress as a comprehensive solution to “$600 toilet seats and $400 hammers.” This provision answered the practice of major defense contractors prohibiting their subcontractors from selling directly to the Government. In the past, when the prime contractor wanted to be the source to the Government, they would charge at least a material overhead to any cost or price from the subcontractor/supplier. Waiving this Act would allow prime contractors to restrict their subcontractors from selling directly to the Government and limit opportunities for small businesses, including women-owned and minority-owned businesses. A determination was made not to waive this Act so as to ensure competition is preserved for all sectors of the economy.
MARAD, Division of Maritime Programs Under Secretary of Defense (Acquisition, Technology, and Logistics) United States Transportation Command (Department of Defense)
v. The waiver will put at risk two DoD programs (the Voluntary Intermodal Sealift Agreement and the Maritime Security Program) that are essential to U.S. security interests. Through these Start Printed Page 2719programs, DoD has immediate access to reliable commercial maritime assets at a fraction of the cost it would incur if it had to replicate those assets (Transportation Institute). Shippers cannot dedicate valuable assets to the defense and other governmental needs of the United States unless they can rely on a steady flow of cargoes.
epartment of Veterans Affairs
The Department of Labor stated that “The relatively minor burdens imposed on contractors by Section 503 of the Rehabilitation Act of 1973, (29 U.S.C. § 793) are justified by the significant benefits the law provides for disabled job applicants and workers. The Census Bureau estimates that approximately 18.6 million American workers have disabilities. Section 503 requires, for example, that contractors recruit qualified applicants with disabilities for job openings, develop anti-disability harassment policies, and refrain from discriminating against qualified individuals with disabilities. Reducing protections for qualified job applicants and workers with disabilities would not be consistent with the President’s New Freedom Initiative, designed to ensure that Americans with disabilities have the opportunity to learn and develop skills and to engage in productive work.”
Response : It was determined that the affirmative action provision is justified by the significant direct benefits for individual protected veterans, and we must make every effort to ensure their employment.
i. Examination of records by the Comptroller General, 41 U.S.C. 254d(c) and 10 U.S.C. 2313(c). The Councils did not receive any comments specifically supporting waiver of the examination of records by the Comptroller General for acquisition of COTS. 10 respondents supported waiver as part of broad general support for the proposed rule. Start Printed Page 2720The Councils received comments from 2 respondents opposed the waiver.
Under Secretary of Defense (Acquisition, Technology, and Logistics) Opponents of the waiver of the Fly American Act when acquiring COTS items present the following rationale:
OMB Control No.Current respondentsCurrent responsesCurrent hoursRevised respondentsRevised responsesRevised hours9000-00243,707 x 15 =55,605 x 0.109 =6,0613,521 x 1552,815 x .1095,757 hrs9000-01301,140 x 5 =5,700 x .117 =6671083 x 5 =5415 x .117 =634 hrs9000-013464,350 x 1 =64,350 x .325 =20,91364 x 164 x .32521 hrs9000-0141500 x 2 =1,000 x 2.5 =2,500450 x 2 =900 x 2.5 =2,250 hrs
Start Amendment Part2. Amend section 2.101 in paragraph (b)(2) by adding, in alphabetical order, the definition “Commercially available off-the-shelf (COTS) item” to read as follows:End Amendment Part
Start Amendment Part3. Revise section 3.503-2 to read as follows:End Amendment Part
Start Amendment Part4. Add section 12.103 to read as follows:End Amendment Part
Start Amendment Part5. Amend section 12.301 in the first sentence of paragraph (b)(4) by removing “executive orders” and adding “Executive orders” in its place;End Amendment Part
Start Amendment Part6. Revise the heading of Subpart 12.5 to read as follows.End Amendment Part
Start Amendment Part7. Revise section 12.500 to read as follows:End Amendment Part
Start Amendment Part8. Amend section 12.502 by adding paragraph (c) to read as follows:End Amendment Part
Start Amendment Part9. Add section 12.505 to read as follows:End Amendment Part
Applicability of certain laws to contracts for the acquisition of COTS items.
Start Amendment Part10. Amend section 23.406 by revising the introductory text of paragraph (c); and removing from paragraph (d) “Insert” and adding “Except for the acquisition of commercially available off-the-shelf items, insert”, in its place. The revised text reads as follows:End Amendment Part
Start Amendment Part11. Amend section 25.003 by revising the definitions “Domestic construction material” and “Domestic end product” to read as follows:End Amendment Part
Domestic construction material means—Start Printed Page 2722
(ii) The construction material is a COTS item. Domestic end product means—
Start Amendment Part12. Revise section 25.100 to read as follows:End Amendment Part
Start Amendment Part13. Amend section 25.101 by revising paragraph (a)(2) to read as follows:End Amendment Part
Start Amendment Part14. Revise section 25.200 to read as follows:End Amendment Part
Start Amendment Part15. Amend section 52.212-3 by—End Amendment Part
Start Amendment Parta. Revising the date of clause;End Amendment Part
Start Amendment Partb. Revising paragraph (f)(1); andEnd Amendment Part
Start Amendment Partc. Revising paragraph (g)(1)(i) and the last sentence of paragraph (g)(1)(iii).End Amendment Part
Start Amendment Part16. Amend section 52.212-5 by revising the date of the clause and paragraph (b)(27); by removing from paragraph (b)(30) “(June 2003)” and adding “(FEB 2009)” in its place; and by removing from paragraph (b)(31)(i) “(Aug 2007)” and adding “(FEB 2009)” in its place. The revised text reads as follows:End Amendment Part
Start Amendment Part17. Amend section 52.213-4 by removing from the clause heading “(Dec 2008)” and adding “(FEB 2009)” in its place; and by removing from paragraph (b)(1)(ix) “(June 2003)” and adding “(FEB 2009)” in its place.End Amendment Part
Start Amendment Part18. Amend section 52.225-1 by revising the date of the clause; by adding in paragraph (a), in alphabetical order, the definition “Commercially available off-the-shelf (COTS) item” and revising the definition “Domestic end product”; and by revising paragraph (b) to read as follows:End Amendment Part
Start Amendment Part19. Amend section 52.225-2 by revising the date of the provision and paragraph (a) to read as follows:End Amendment Part
Start Amendment Part20. Amend section 52.225-3 by revising the date of the clause; in paragraph (a), by adding, in alphabetical order, the definition “Commercially available off-the-shelf (COTS) item” and revising the definition “Domestic end product”; and by revising paragraph (c) to read as follows:End Amendment Part
Start Amendment Part21. Amend section 52.225-4 by revising the date of the provision and paragraphs (a) and (c) to read as follows:End Amendment Part
Start Amendment Part22. Amend section 52.225-9 by revising the date of the clause; in paragraph (a), by adding, in alphabetical order, the definition “Commercially available off-the-shelf (COTS) item” and revising the definition “Domestic construction material”; and by revising paragraph (b)(1) to read as follows:End Amendment Part
Start Amendment Part23. Amend section 52.225-10 by revising the date of the provision and paragraph (a) to read as follows:End Amendment Part
Start Amendment Part24. Amend section 52.225-11 by—End Amendment Part
Start Amendment Partb. In paragraph (a), by adding, in alphabetical order, the definition “Commercially available off-the-shelf (COTS) item” and revising the definition “Domestic construction material”;End Amendment Part
Start Amendment Partc. Revising paragraph (b)(1); andEnd Amendment Part
Start Amendment Partd. Revising the date of Alternate I and in paragraph (b)(1) adding a new second sentence to read as follows:End Amendment Part
Start Amendment Part25. Amend section 52.225-12 by revising the date of the provision and revising paragraph (a) to read as follows:End Amendment Part