Commercial isn't unique

As part of the Federal Acquisition Streamlining Act of 1994, Congress established

a preference for agencies to buy commercial goods and services instead of

government-unique items whenever feasible. This preference was implemented

primarily through a new Federal Acquisition Regulation ? Part 12, "Acquisition

of Commercial Items."

Since then, most agencies have converted their more common procurements

to Part 12. But in many cases, agencies have continued to use traditional

acquisition techniques to acquire items that include substantial commercial


When an agency decides to buy commercial items pursuant to FAR Part 12,

it subjects itself to important restrictions. For example, the regulation

states that "contracts for commercial items shall rely on contractors' existing

quality assurance systems as a substitute for government inspection and

testing before tender for acceptance unless customary market practices for

the commercial item being acquired include in-process inspection." And the

FAR limits the government's right to impose special warranty requirements

that exceed commercially applicable warranties. Similar restrictions are

imposed on subcontracts awarded under the prime contract.

In some Part 12 procurements, the agency may tailor its requirements to

impose more stringent specifications. However, the FAR states that: "The

contracting officer shall not tailor any clause or otherwise include any

additional terms or conditions in a solicitation or contract for commercial

items in a manner that is inconsistent with customary commercial practice

for the item being acquired unless a waiver is approved in accordance with

agency procedures."

When an agency uses a procurement method other than FAR Part 12, it must

still promote the purchase of commercial items by subcontracts. In all contracts

for noncommercial items, an agency must include a standard clause that provides

in part, "Not-with-standing any other clause of this contract, the contractor

is not required to include any FAR provision or clause" beyond three particular


Those clauses set forth the special requirements related to Equal Opportunity,

Affirmative Action for Disabled Veterans and Vietnam Era Veterans, and Affirmative

Action for Disabled Workers. This means that a prime contractor may flow

down more of the government-unique clauses if it wishes, but the agency

cannot require it.

Oddly, the explicit prohibition against the government imposing special

requirements for data rights, inspection and acceptance, and warranty terms

is not found in the standard commercial subcontracting clause that is included

in prime contracts for noncommercial items. Yet the same effect is achieved

through listing the three specific clauses as the only ones that a prime

contractor is required to flow down to its subcontractors supplying commercial


Despite this, some contractors still impose government-unique requirements

on subcontracts, even when buying commercial items from them. Any contractor

in that position should re-evaluate its approach.

Peckinpaugh is corporate counsel for DynCorp, Reston, Va.


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