Contracting Cone
FAR Based Strategies
Ordering under the Federal Supply Schedule
Acquisition of Commercial Products and Commercial Services
Simplified Procedures for Noncommercial Acquisitions
Contracting by Negotiation
Indefinite-Delivery Contracts
Letter Contracts
Agreements
Small Business
Broad Agency Announcement
Commercial Solutions Opening
Statutory Strategies
SBIR/STTR Programs
Other Transactions
Procurement for Experiments
R&D Agreements
Cooperative R&D Agreement
Partnership Intermediary Agreement
Technology Investment Agreement
Contract Type Matrix
Commercial — Purchase Order
FAR 12.201-1
A commercial purchase order may be used to acquire commercial products or commercial services using the simplified procedures in FAR 12.201-1. Under RFO FAR Part 12, for commercial acquisitions valued up to the applicable ceiling, the contracting officer issues a request for quotations followed by a purchase order. The purchase order is the Government’s offer to buy the commercial products or commercial services on specified terms and conditions. A binding contract is formed when the supplier accepts the order in writing or begins substantial performance.
Commercial purchase orders are intended to streamline solicitation, evaluation, and award for commercial acquisitions while still promoting competition to the maximum extent practicable. Contracting officers may normally post RFQs to the Governmentwide point of entry or, for acquisitions at or below the SAT, solicit quotations directly from suppliers.
Common Applications
- Commercial products and commercial services
- Commercially available off-the-shelf products
- IT products, software, licenses, and digital tools
- Routine commercial services
- Training, subscriptions, and support services
- Commercial repair, maintenance, or installation services
- Other commercial requirements within the applicable FAR 12.201-1 ceiling
Restrictions
- Must be for commercial products or commercial services.
- Must be within the applicable ceiling for use of FAR 12.201-1 simplified procedures.
- Requirements may not be divided merely to use a specific threshold or procedure.
- If commercial products or commercial services are available from a required or priority source identified in FAR Part 8, the agency should use that source before using open-market FAR Part 12 procedures.
- Competition must be promoted to the maximum extent practicable.
- Cost-reimbursement contract types may not be used for commercial products or commercial services.
- Time-and-materials or labor-hour arrangements may be used only when permitted by FAR 12.104 and the required determination and findings is executed.
- Commercial terms, technical data, software licenses, cybersecurity, accessibility, and agency approval requirements must be addressed when applicable.
Pros |
Cons |
| Streamlines solicitation, evaluation, and award for commercial acquisitions. | Limited to commercial products and commercial services within the FAR 12.201-1 ceiling. |
| RFQ followed by purchase order can reduce administrative burden and procurement lead time. | Purchase orders may not fit complex or heavily negotiated requirements. |
| Allows direct solicitation from suppliers at or below the SAT when appropriate. | The Government must still document restricted competition when only one source is available. |
| Can use commercial terms and market pricing to support efficient award. | Commercial license terms, data rights, and software terms may require careful review. |
| A binding contract forms when the supplier accepts the order or begins substantial performance. | If the supplier does not accept or perform, the purchase order itself is not yet a binding contract. |