FAR to implement a section of the National Defense Authorization Act for Fiscal Year 2018 to revise the definition of a Commercial Item
Effective today, November 12th, 2019, DoD, GSA and NASA have amended the Federal Acquisition Regulation (FAR) to implement a section of the National Defense Authorization Act for Fiscal Year 2018 to revise the definition of a “Commercial item.”
The rule would broaden the definition to allow certain additional items developed exclusively at private expense to qualify for the benefits associated with being treated as a commercial item. Section 847 amends the definition of “commercial item” at 41 U.S.C. 103(8) to expand the universe of nondevelopmental items (NDIs) that qualify as commercial items to include items sold in substantial quantities on a competitive basis to multiple foreign governments.
The statutory and regulatory definition of “commercial item” is broad and covers a wide range of products and services. It includes:
Products, other than real property, that have been offered for sale, lease, or license to the public. Possible indications that an item is commercial are a commercial sales history, listing in catalogs or brochures, an established price, and distributors. Examples of commercial items bought by agencies are transport aircraft, computers, medicine, and fuel. The commercial market is global; commercial items are not limited to the domestic commercial market.
Products that evolved through advances in technology or performance and will be available in the commercial market in time to meet the delivery requirements of the solicitation. Examples of such items are product updates, model changes, and product improvements such as new versions of software.
Products that have received minor modifications to meet agency requirements. To be considered minor, a modification may not significantly alter the product's nongovernmental function or essential physical characteristics. In determining whether a modification is minor, agencies should consider the value and size of the modification and the comparative value and size of the final product.
Products that were created by integrating commercial subsystems and components into a unique system. For example, a computer system composed of commercial subsystems would be considered a commercial item. Another example is industrial plant equipment that combines commercial components into a unique item based on customer needs.
Installation services, maintenance services, repair services, training services, and other services procured to support a commercial product. Help desks, call centers, warranty repair services, user training, equipment installation, and other services related to item support are examples.
Standalone services offered and sold competitively, in substantial quantities, in the commercial marketplace based on established catalog or market prices for specific tasks performed and under standard commercial terms and conditions. Construction, research and development (R&D), warehousing, garbage collection, and transportation of household goods are examples.
NDIs, if the procuring agency determines the item was developed exclusively at private expense and sold in substantial quantities, on a competitive basis, to multiple State and local governments. NDI is defined separately in FAR 2.101. An NDI includes an item of supply used exclusively for governmental purposes by a Federal agency, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement. Examples include—Protective vests used by police departments and rescue equipment used by fire and rescue units;
Defense products previously developed by defense agencies of U.S. allies and used exclusively for governmental purposes by Federal agencies, state or local governments, or a foreign government;
Items that require only minor modifications to meet the requirements of the procuring agency; and
A mechanical dereefer (mechanism for releasing parachute reefing lines) used with the U.S. Army's cargo parachutes that was developed for and first used by the Canadian Army.
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