CHAPTER 247-PROCUREMENT OF COMMERCIAL PRODUCTS AND COMMERCIAL SERVICES

        

Editorial Notes

Prior Provisions

A prior chapter 247 "ACQUISITION OF COMMERCIAL ITEMS", as added by Pub. L. 115–232, div. A, title VIII, §801(a), Aug. 13, 2018, 132 Stat. 1827 , and consisting of reserved section 3451, was repealed by Pub. L. 116–283, div. A, title XVIII, §1821(a)(1), Jan. 1, 2021, 134 Stat. 4194 .

Amendments

2021- Pub. L. 117–81, div. A, title VIII, §803(b)(2), Dec. 27, 2021, 135 Stat. 1816 , added item 3458.

Pub. L. 116–283, div. A, title XVIII, §1821(a)(1), (3), (b)(1)(B), (7)(C), Jan. 1, 2021, 134 Stat. 4194–4196 , transferred chapter 140 of this title to this chapter, renumbered items 2375, 2376, 2377, 2379, 2380, and 2380a as 3452, 3451, 3453, 3455, 3456, and 3457, respectively, moved item 3451 so as to precede item 3452, and struck out item 2380b "Treatment of commingled items purchased by contractors as commercial products".

Statutory Notes and Related Subsidiaries

Use of Capability-Based Analysis of Price of Goods or Services Offered by Nontraditional Defense Contractors

Pub. L. 118–159, div. A, title VIII, §864, Dec. 23, 2024, 138 Stat. 2002 , provided that:

"(a) Pilot Program.-A contracting officer of the Department of Defense may use alternative capability-based analysis to determine whether the proposed price or fee for a commercial product or commercial service offered by a nontraditional defense contractor (as that term is defined in section 3014 of title 10, United States Code) is fair and reasonable.

"(b) Report.-Not later than February 1, 2028, the Under Secretary of Defense for Acquisition and Sustainment shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report evaluating the use of the authority under subsection (a), including the following elements:

"(1) A summary of activities conducted because of the inclusion of alternative capability-based analysis into the evaluation of proposals offered by nontraditional contractors, including specific examples.

"(2) An analysis of the effectiveness of the authority under subsection (a) in increasing nontraditional defense contractor participation in the defense industrial base and in increasing access by the Department of Defense to new technologies or capabilities.

"(3) Recommendations on-

"(A) the continuation of the authority under subsection (a);

"(B) changes to existing law; and

"(C) the expansion of the program to include other contractors.

"(c) Sunset.-The authority under subsection (a) shall expire on September 30, 2029.

"(d) Alternative Capacity-based Analysis Defined.-In this section, the term 'alternative capability-based analysis' means an analysis of the value to the Federal Government of a commercial product or commercial service that considers one or more of the following elements:

"(1) The fitness of the product or service for the particular purpose such commercial product or commercial service is being procured.

"(2) The unique nature of, technical expertise required to produce or provide, and the non-Federal resources expended to develop such commercial product or commercial service.

"(3) The business model or financial projections of the nontraditional defense contractor, commensurate with the scale of the potential investment by the Secretary of Defense, which may include cost information, self-funded risk, financial projections, expenditure rates, estimates of total sales market, and other financial, technical, or management data.

"(4) The estimated total cost avoidance or increased capacity afforded by such commercial product or commercial service in relation to current and future costs of programs and operations that provide the same or similar capabilities.

"(5) Input from the anticipated users of such commercial product or commercial service on the potential value added by the improved capabilities or production processes resulting from such commercial product or commercial service."

Procurement of Commercial Services

Pub. L. 110–181, div. A, title VIII, §805, Jan. 28, 2008, 122 Stat. 212 , as amended by Pub. L. 110–417, [div. A], title X, §1061(b)(4), Oct. 14, 2008, 122 Stat. 4613 ; Pub. L. 113–291, div. A, title X, §1071(b)(2)(A), Dec. 19, 2014, 128 Stat. 3506 ; Pub. L. 115–232, div. A, title VIII, §836(f)(6), Aug. 13, 2018, 132 Stat. 1871 , provided that:

"(a) Regulations Required.-Not later than 180 days after the date of the enactment of this Act [Jan. 28, 2008], the Secretary of Defense shall modify the regulations of the Department of Defense for the procurement of commercial services for or on behalf of the Department of Defense.

"(b) Applicability of Commercial Procedures.-

"(1) Services of a type sold in marketplace.-The regulations modified pursuant to subsection (a) shall ensure that services that are not offered and sold competitively in substantial quantities in the commercial marketplace, but are of a type offered and sold competitively in substantial quantities in the commercial marketplace, may be treated as commercial services for purposes of section 2306a of title 10, United States Code [see 10 U.S.C. 3701 et seq.] (relating to truth in negotiations), only if the contracting officer determines in writing that the offeror has submitted sufficient information to evaluate, through price analysis, the reasonableness of the price for such services.

"(2) Information submitted.-To the extent necessary to make a determination under paragraph (1), the contracting officer may request the offeror to submit-

"(A) prices paid for the same or similar commercial services under comparable terms and conditions by both government and commercial customers; and

"(B) if the contracting officer determines that the information described in subparagraph (A) is not sufficient to determine the reasonableness of price, other relevant information regarding the basis for price or cost, including information on labor costs, material costs, and overhead rates.

"(c) Time-and-Materials Contracts.-

"(1) Commercial services acquisitions.-The regulations modified pursuant to subsection (a) shall ensure that procedures applicable to time-and-materials contracts and labor-hour contracts for commercial service acquisitions may be used only for the following:

"(A) Services procured for support of a service, as described in section 103a(1) of title 41, United States Code.

"(B) Emergency repair services.

"(C) Any other commercial services only to the extent that the head of the agency concerned approves a determination in writing by the contracting officer that-

"(i) the services to be acquired are commercial services as defined in section 103a(2) of title 41, United States Code;

"(ii) if the services to be acquired are subject to subsection (b), the offeror of the services has submitted sufficient information in accordance with that subsection;

"(iii) such services are commonly sold to the general public through use of time-and-materials or labor-hour contracts; and

"(iv) the use of a time-and-materials or labor-hour contract type is in the best interest of the Government.

"(2) Non-commercial services acquisitions.-Nothing in this subsection shall be construed to preclude the use of procedures applicable to time-and-materials contracts and labor-hour contracts for non-commercial service acquisitions for the acquisition of any category of services."

Plan for Restricting Government-Unique Contract Clauses on Commercial Contracts

Pub. L. 110–181, div. A, title VIII, §821, Jan. 28, 2008, 122 Stat. 226 , as amended by Pub. L. 113–291, div. A, title X, §1071(b)(2)(B), Dec. 19, 2014, 128 Stat. 3506 ; Pub. L. 115–232, div. A, title VIII, §836(f)(3), Aug. 13, 2018, 132 Stat. 1871 ; Pub. L. 116–92, div. A, title IX, §902(41), Dec. 20, 2019, 133 Stat. 1547 , provided that:

"(a) Plan.-The Under Secretary of Defense for Acquisition and Sustainment shall develop and implement a plan to minimize the number of government-unique contract clauses used in commercial contracts by restricting the clauses to the following:

"(1) Government-unique clauses authorized by law or regulation.

"(2) Any additional clauses that are relevant and necessary to a specific contract.

"(b) Commercial Contract.-In this section:

"(1) The term 'commercial contract' means a contract awarded by the Federal Government for the procurement of a commercial product or a commercial service.

"(2) The term 'commercial product' has the meaning provided by section 103 of title 41, United States Code.

"(3) The term 'commercial service' has the meaning provided by section 103a of title 41, United States Code."