C05 Selling commercial items in 2014 regulatory and procedural update
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Transcript of C05 Selling commercial items in 2014 regulatory and procedural update
Breakout Session #C05
Robert E. Jones, Advisor, Left
Brain Professionals Inc.
Monday, July 28, 2014
4:00 PM – 5:15 PM
Selling Commercial Items in 2014 –
Regulatory & Procedural Updates
3
Agenda
• Definition
• Determinations
• Regulatory History
• Recent Changes
• Future
4
Takeaway #1
Top 10 resources for selling commercial
items
1.FAR 2.101
2.FAR 12
3.Commercial Item Handbook
4.FASA
5.Clinger-Cohen Act of 1996
5
Takeaway #1
6. Defense Standardization Program
7. DFARS 212.5
8. DCAA Audit Guidance – Subcontract
Commercial Items
9. DCAA Memo – FPRA
http://www.dcaa.mil/mmr/11-PSP-017.pdf
10.DAU Commercial Pricing Information
Guide
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Definition of Commercial Item
• FAR 2.101
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Commercial Item Determination
• Market research (FAR 10.001(a)(3)(II))
• Price reasonableness (FAR 15.402,
12.209)
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Cost or Pricing Data
• FAR 15.403-1 Prohibition on obtaining
certified cost or pricing data
• FAR 15.303-3 Requiring data other than
certified cost or pricing data
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Benefits of Selling a Commercial Item
• Simplified acquisition procedures
• Development/NRE costs
• Commercial/industry T&C
• Commercial/industry quality program
• Exemptions
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FAR 12 Simplified Acquisition
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Exemptions
• TINA
• CAS
• Changes must be bi-lateral
• Audits and records
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Government vs Commercial Contracts
• 58 government-unique clauses apply to
DoD acquisitions (DFARS 212.5)
• 50+ government-unique clauses apply to
civilian acquisitions
• Required flow-downs to subcontractors
(FAR 52.244-6)
• IP rights
13
Government vs Commercial Contracts
• Termination for Convenience (FAR 49)
• Warranties (FAR 46.7)
• Inspection (FAR 46.1)
• Changes
• Claims & Disputes
14
Regulatory Timeline of Events
• 1984 - 2013
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Competition in Contracting Act
• PL 98-369, 1984
• “…promote the use of commercial products
whenever practicable.”
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Defense Procurement Reform Act
• PL 98-525, 1985
• “…standard or commercial
parts…whenever such use is technically
acceptable and cost effective.”
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Blue Ribbon Commission
on Defense Management• 1986
• Foremost among commercial practices is
competition, “which should be used
aggressively in the buying of systems,
products and professional services.”
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Section 800 Panel Report
• PL 101-510, 1990
• Stronger policy language favoring the use
of commercial and nondevelopmental
items
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DFARS 210 and 211
• 1991
• 210 – Nondevelopmental items
• 211 – Early predecessor of commercial
items
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National Performance Review
• 1993
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Federal Acquisition Streamlining Act
• PL 103-355, 1994
• Congress established a preference for
commercial items
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Federal Acquisition Reform Act
• PL 104-106, 1996
• Fair and reasonable price should be
determined by looking at the market, not a
the contractor’s cost.
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Service Acquisition Reform Act
• PL 109-163, 2006
• An exception to the prescribed market-
based approach to defining commercial tha
allows certain products or services to
qualify for “commercial item” status,
regardless of whether they actually were
offered commercially.
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DoD IG Report
• 2006 “Report on Commercial Contracting
for the Acquisition of Defense Systems”
• DOD had ‘‘relinquished the benefits of
buying truly commercial products’’
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GAO Report
• 2006 ‘‘Contract Management: DOD
Vulnerabilities to Contracting Fraud,
Waste, and Abuse,’’
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Acquisition Advisory Panel
• 2007
• https://www.acquisition.gov/comp/aap/24102_GSA.pdf
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NDAA 2007
• PL 109-364, 2006
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Takeaway #2
• Know your products and services!
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Recent Changes
• DCAA Memo September 2011
• DFARS Update
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DFARS Update
• DFARS 212.102, 2012
• FAR 12 acquisitions exceeding $1 million in value, except
for acquisitions made pursuant to FAR 12.102(f)(1), the
contracting officer shall—
• Obtain approval at one level above the contracting officer
when a commercial item determination relies on
subsections of the “commercial item” definition at FAR
2.101 :
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DFARS Update
• (1)(ii) Has been offered for sale, lease, or
license to the general public;
• (3) Modifications
• (4) Combinations of items, or
• (6) Services.
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NDAA 2013 Proposal
• Eliminate items ‘‘of a type’’
• Eliminate items or services merely offered
for sale, lease, or license (but not yet sold,
leased, or licensed)
• Adjust the threshold that requires prior sale
of ‘‘substantial’’ quantities to one that
allows prior sale of ‘‘like’’ quantities
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Takeaway #3
• Do your research and stand strong!
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Disputes and Claims
• FAR 33 Disputes and Appeals
• False Statements Act
• 18 USC §1001
• Civil False Claims Act
• 31 USC §3729
• Contract Disputes Act
• 41 USC §601-613
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Future of Commercial Items
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3 Takeaways
• Top 10 resources for selling commercial
items.
• Know your products and services!
• Do your research and stand strong!
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