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Commercial Items Past, Present, & Future

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History of commercial items in government contracts, present status, and speculation on future changes.

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Commercial Items Past, Present, & Future

  1. 1. Commercial Item Past, Present, & Future Robert E. Jones
  2. 2. Positive Share
  3. 3. Safety Check
  4. 4. Definition: FAR 2.101
  5. 5. 30+ Years of History! Additional detailed slides available on our website: www.leftbrainpro.com/greenville16
  6. 6. Through the Years Competition in Contracting Act 1984 Defense Procurement Reform Act 1985 Blue Ribbon Commission 1986 Section 800 Panel Report 1990 DFARS 210 & 211 1991 National Performance Review 193 Federal Acquisition Streamlining Act 1994
  7. 7. Through the Years Federal Acquisition Reform Act 1996 Service Acquisition Reform Act 2006 DoDIG Report 2006 Acquisition Advisory Panel 2007 NDAA 2007 DCAA Memo 2011 DFARS Update 2012
  8. 8. Present NDAA 2013 PL 112-239, 2013 Another attempt to eliminate “of a type” and “offered for sale.”
  9. 9. Present Better Buying Power 3.0 http://bbp.dau.mil Increase competition and involve industry.
  10. 10. Present NDAA 2016 – Sec 851-857 PL 114-92, 2016
  11. 11. Present Acquisition Reform Working Group (ARWG)
  12. 12. Future DFARS Case 2013-D034 Retracted and replaced on December 7, 2015 Attempt to implement significant commercial sales.
  13. 13. Future DFARS Case 2016-D006 “Procurement of Commercial Items” Implements requirements of NDAA 2016. Status due: 2/3/2016
  14. 14. Benefits of a Commercial Item Simplified acquisition procedures Development/NRE costs Commercial/industry T&C Commercial/industry quality program Exemptions
  15. 15. 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
  16. 16. Exemptions TINA (now Truthful Cost or Pricing Data Act) CAS (Cost Accounting Standards) Changes must be bi-lateral Audits and records
  17. 17. Government vs Commercial 58+ government-unique clauses apply to DoD acquisitions 50+ government-unique clauses apply to civilian acquisitions Required flow-downs to subcontractors (FAR 52.244-6) IP rights
  18. 18. Government vs Commercial Termination for Convenience (FAR 49) Warranties (FAR 46.7) Inspection (FAR 46.1) Changes Claims & Disputes
  19. 19. Case Study #1 Apple vs FBI Is this a question of cybersecurity, national security, commercial items, or all 3?
  20. 20. Case Study #2 C-130J and follow-on training. Original commercial item determination was flawed.
  21. 21. Your Commercial Items Do your market research. Document the determination. Document your price justification.
  22. 22. Questions?
  23. 23. Contact Info Robert E. Jones Robert@leftbrainpro.com O (614) 556-4415 M (513) 728-1163
  24. 24. Detail History Slides Follow
  25. 25. Past Competition in Contracting Act PL 98-369, 1984 “…promote the use of commercial products whenever practicable.”
  26. 26. Past Defense Procurement Reform Act PL 98-525, 1985 “…standard or commercial parts…whenever such use is technically acceptable and cost effective.”
  27. 27. Past Blue Ribbon Commission on Defense Management 1986 Competition “which should be used aggressively in the buying of systems, products and professional services.”
  28. 28. Past Section 800 Panel Report PL 101-510, 1990 Stronger policy language favoring the use of commercial and NDIs.
  29. 29. Past DFARS 210 and 211 1991 210 NDI 211 Early predecessor of commercial items
  30. 30. Past National Performance Review 1993
  31. 31. Past Federal Acquisition Streamlining Act (FASA) PL 103-355, 1994 Congress established a preference for commercial items.
  32. 32. Past Federal Acquisition Reform Act (FARA) PL 104-106, 1996 Fair and reasonable price should be determined by looking at the market, not at the contractor’s cost.
  33. 33. Past Service Acquisition Reform Act (SARA) PL 109-163, 2006 Allowed certain products or services to qualify regardless of whether they actually were offered commercially.
  34. 34. Past DoD IG Report 2006 “Report on Commercial Contracting for the Acquisition of Defense Systems” DoD had “relinquished the benefits of buying truly commercial products.”
  35. 35. Past 2006 “Contract Management: DoD Vulnerabilities to Contracting Fraud, Waste, and Abuse”
  36. 36. Past Acquisition Advisory Panel 2007 https://www.acquisition.gov /seven_steps/library/DraftF inalReport.pdf “offered and sold competitively, in substantial quantities, in the commercial marketplace.”
  37. 37. Past NDAA 2007 PL 109-364, 2006 Attempt to remove “of a type” and “offered for sale.”
  38. 38. Past DCAA Memo September 2011 MRD 11-PSP-017(R) Previous commercial item determination not acceptable.
  39. 39. Past DFARS Update 2012 DFARS 212.102 CI acquisitions over $1M require additional approval.

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