Acquisition of Commercial Products and Commercial Services
FAR Part 12

Products and services that meet the definitions of commercial product or commercial service at FAR 2.101 may be acquired using the streamlined procedures in FAR Part 12 – Acquisition of Commercial Products and Commercial Services. FAR Part 12 provides policies and procedures to streamline the acquisition of commercial products, including commercially available off-the-shelf items, and commercial services. It also implements simplified procedures for certain commercial acquisitions.

Under RFO FAR Part 12, agencies must acquire commercial products or commercial services when they are available to meet the agency’s needs. Contracting officers should also require prime contractors and subcontractors, to the maximum extent practicable, to incorporate commercial products, commercial services, or nondevelopmental items as components of items supplied to the Government.

For commercial acquisitions valued up to the applicable threshold, FAR 12.201-1 provides simplified procedures using a request for quotations followed by a purchase order. FAR Subpart 12.4 also provides procedures for micro-purchases of commercial products and commercial services.

DFARS 212.102 further addresses DoD use of commercial product and commercial service procedures. In particular, DoD may treat supplies and services provided by nontraditional defense contractors as commercial products or commercial services. This authority is intended to enhance defense innovation and investment, enable DoD to acquire items that otherwise might not have been available, and create incentives for nontraditional defense contractors to do business with DoD. Applying commercial product or commercial service procedures to supplies or services from a nontraditional defense contractor does not require a commercial product or commercial service determination and does not mean the item itself is commercial.

As defined in 10 U.S.C. § 3014, a nontraditional defense contractor is an entity that is not currently performing, and has not performed for at least the one-year period preceding the solicitation of sources by DoD, any DoD contract or subcontract subject to full coverage under the Cost Accounting Standards prescribed pursuant to 41 U.S.C. § 1502.

Many entities may qualify as nontraditional defense contractors because they are small businesses exempt from CAS requirements, perform only under commercial procedures, perform only under firm-fixed-price contracts with adequate price competition, or have limited CAS-covered work.

Common Applications

• Commercial products and commercial services
• Commercially available off-the-shelf products
• Nondevelopmental items incorporated into Government solutions
• Products and services provided by nontraditional defense contractors
• IT products and services
• Health IT services and solutions
• Cyber services and solutions
• Cloud services and solutions
• Software licenses
• Telecommunications and wireless services
• Mobile solutions
• COTS defense business systems

Restrictions

• Commercial product or commercial service determinations are generally required for DoD acquisitions using FAR Part 12 procedures that exceed the simplified acquisition threshold, unless an exception applies.
• A commercial product or commercial service determination is not required when DoD applies commercial product or commercial service procedures to supplies or services from nontraditional defense contractors under DFARS 212.102.
• Cost-reimbursement contracts may not be used to acquire commercial products or commercial services.
• Contract types are generally limited to firm-fixed-price, fixed-price with economic price adjustment, and, when authorized, time-and-materials or labor-hour contracts.

Resources

• FAR Subpart 2.1 Definitions
• FAR Part 12 Acquisition of Commercial Items
• FAR Subpart 16.2 Fixed-Price Contracts
• FAR Subpart 16.6 Time-and-Materials, Labor-Hour, and Letter Contracts
• FAR Part 30 Cost Accounting Standards Administration
• DFARS Part 212 Acquisition of Commercial Items
• DFARS PGI Part 212 Acquisition of Commercial Items
• DFARS Subpart 234.70 Acquisition of Major Weapon Systems as Commercial Items
• DoD Guidebook for Acquiring Commercial Items Part A: Commercial Item Determination, Defense Pricing and Contracting, Jul 2019
• DoD Guidebook for Acquiring Commercial Items Part B: Pricing Commercial Items, Defense Pricing and Contracting, Jan 2018
• Defense Contract Management Agency – Commercial Item Group
• Guidance on Commercial Item Determinations and Price Reasonableness, DPAP Memo, Sep 2016
• CON 7800 Commercial Acquisition, Defense Acquisition University
• Commercial Contracting, DAU ACQuipedia