§ 2375. Relationship of other provisions of law to procurement of commercial products and commercial services

• (a)
  • (1) No contract for the procurement of a commercial product or commercial service entered into by the head of an agency shall be subject to any law properly listed in the Federal Acquisition Regulation pursuant to section 1906(b) of title 41 .
  • (2) No subcontract under a contract for the procurement of a commercial product or commercial service entered into by the head of an agency shall be subject to any law properly listed in the Federal Acquisition Regulation pursuant to section 1906(c) of title 41 .
  • (3) No contract for the procurement of a commercially available off-the-shelf item entered into by the head of an agency shall be subject to any law properly listed in the Federal Acquisition Regulation pursuant to section 1907 of title 41 .
• (b)
  • (1) The Defense Federal Acquisition Regulation Supplement shall include a list of defense-unique provisions of law and of contract clause requirements based on government-wide acquisition regulations, policies, or executive orders not expressly authorized in law that are inapplicable to contracts for the procurement of commercial products and commercial services. A provision of law or contract clause requirement properly included on the list pursuant to paragraph (2) does not apply to purchases of commercial products and commercial services by the Department of Defense. This section does not render a provision of law or contract clause requirement not included on the list inapplicable to contracts for the procurement of commercial products and commercial services.
  • (2) A provision of law or contract clause requirement described in subsection (e) that is enacted after October 13, 1994 , shall be included on the list of inapplicable provisions of law and contract clause requirements required by paragraph (1) unless the Under Secretary of Defense for Acquisition and Sustainment makes a written determination that it would not be in the best interest of the Department of Defense to exempt contracts for the procurement of commercial products and commercial services from the applicability of the provision or contract clause requirement.
• (c)
  • (1) The Defense Federal Acquisition Regulation Supplement shall include a list of provisions of law and of contract clause requirements based on government-wide acquisition regulations, policies, or executive orders not expressly authorized in law that are inapplicable to subcontracts under a Department of Defense contract or subcontract for the procurement of commercial products and commercial services. A provision of law or contract clause requirement properly included on the list pursuant to paragraph (2) does not apply to those subcontracts. This section does not render a provision of law or contract clause requirement not included on the list inapplicable to subcontracts under a contract for the procurement of commercial products and commercial services.
  • (2) A provision of law or contract clause requirement described in subsection (e) shall be included on the list of inapplicable provisions of law and contract clause requirements required by paragraph (1) unless the Under Secretary of Defense for Acquisition and Sustainment makes a written determination that it would not be in the best interest of the Department of Defense to exempt subcontracts under a contract for the procurement of commercial products and commercial services from the applicability of the provision or contract clause requirement.
  • (3) In this subsection, the term “subcontract” includes a transfer of commercial products and commercial services between divisions, subsidiaries, or affiliates of a contractor or subcontractor. The term does not include agreements entered into by a contractor for the supply of commodities that are intended for use in the performance of multiple contracts with the Department of Defense and other parties and are not identifiable to any particular contract.
  • (4) This subsection does not authorize the waiver of the applicability of any provision of law or contract clause requirement with respect to any first-tier subcontract under a contract with a prime contractor reselling or distributing commercial products and commercial services of another contractor without adding value.
• (d)
  • (1) The Defense Federal Acquisition Regulation Supplement shall include a list of provisions of law and of contract clause requirements based on government-wide acquisition regulations, policies, or executive orders not expressly authorized in law that are inapplicable to contracts for the procurement of commercially available off-the-shelf items. A provision of law or contract clause requirement properly included on the list pursuant to paragraph (2) does not apply to Department of Defense contracts for the procurement of commercially available off-the-shelf items. This section does not render a provision of law or contract clause requirement not included on the list inapplicable to contracts for the procurement of commercially available off-the-shelf items.
  • (2) A provision of law or contract clause requirement described in subsection (e) shall be included on the list of inapplicable provisions of law and contract clause requirements required by paragraph (1) unless the Under Secretary of Defense for Acquisition and Sustainment makes a written determination that it would not be in the best interest of the Department of Defense to exempt contracts for the procurement of commercially available off-the-shelf items from the applicability of the provision or contract clause requirement.
• (e) A provision of law or contract clause requirement referred to in subsections (b)(2), (c)(2), and (d)(2) is a provision of law or contract clause requirement that the Under Secretary of Defense for Acquisition and Sustainment determines sets forth policies, procedures, requirements, or restrictions for the procurement of property or services by the Federal Government, except for a provision of law or contract clause requirement that—
  • (1) provides for criminal or civil penalties;
  • (2) requires that certain articles be bought from American sources pursuant to section 2533a of this title , or requires that strategic materials critical to national security be bought from American sources pursuant to section 2533b of this title ; or
  • (3) specifically refers to this section and provides that, notwithstanding this section, it shall be applicable to contracts for the procurement of commercial products and commercial services.

§ 2376. Definitions

In this chapter:

• (1) The terms “commercial product”, “commercial service”, “nondevelopmental item”, “component”, and “commercial component” have the meanings provided in sections 103, 103a, 110, 105, and 102, respectively, of title 41.
• (2) The term “head of an agency” means the Secretary of Defense, the Secretary of Homeland Security, and the Administrator of the National Aeronautics and Space Administration.
• (3) The term “agency” means the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration.

§ 2377. Preference for commercial products and commercial services

• (a) The head of an agency shall ensure that, to the maximum extent practicable—
  • (1) requirements of the agency with respect to a procurement of supplies or services are stated in terms of—
    • (A) functions to be performed;
    • (B) performance required; or
    • (C) essential physical characteristics;
  • (2) such requirements are defined so that commercial services or commercial products or, to the extent that commercial products suitable to meet the agency’s needs are not available, nondevelopmental items other than commercial products, may be procured to fulfill such requirements; and
  • (3) offerors of commercial services, commercial products, and nondevelopmental items other than commercial products are provided an opportunity to compete in any procurement to fill such requirements.
• (b) The head of an agency shall ensure that procurement officials in that agency, to the maximum extent practicable—
  • (1) acquire commercial services, commercial products, or nondevelopmental items other than commercial products to meet the needs of the agency;
  • (2) require prime contractors and subcontractors at all levels under the agency contracts to incorporate commercial services, commercial products, or nondevelopmental items other than commercial products as components of items supplied to the agency;
  • (3) modify requirements in appropriate cases to ensure that the requirements can be met by commercial services or commercial products or, to the extent that commercial products suitable to meet the agency’s needs are not available, nondevelopmental items other than commercial products;
  • (4) state specifications in terms that enable and encourage bidders and offerors to supply commercial services or commercial products or, to the extent that commercial products suitable to meet the agency’s needs are not available, nondevelopmental items other than commercial products in response to the agency solicitations;
  • (5) revise the agency’s procurement policies, practices, and procedures not required by law to reduce any impediments in those policies, practices, and procedures to the acquisition of commercial products and commercial services; and
  • (6) require training of appropriate personnel in the acquisition of commercial products and commercial services.
• (c)
  • (1) The head of an agency shall conduct market research appropriate to the circumstances—
    • (A) before developing new specifications for a procurement by that agency;
    • (B) before soliciting bids or proposals for a contract in excess of the simplified acquisition threshold; and
    • (C) before awarding a task order or delivery order in excess of the simplified acquisition threshold.
  • (2) The head of an agency shall use the results of market research to determine whether there are commercial services or commercial products or, to the extent that commercial products suitable to meet the agency’s needs are not available, nondevelopmental items other than commercial products available that—
    • (A) meet the agency’s requirements;
    • (B) could be modified to meet the agency’s requirements; or
    • (C) could meet the agency’s requirements if those requirements were modified to a reasonable extent.
  • (3) In conducting market research, the head of an agency should not require potential sources to submit more than the minimum information that is necessary to make the determinations required in paragraph (2).
  • (4) The head of an agency shall document the results of market research in a manner appropriate to the size and complexity of the acquisition.
  • (5) The head of an agency shall take appropriate steps to ensure that any prime contractor of a contract (or task order or delivery order) in an amount in excess of $5,000,000 for the procurement of products other than commercial products or services other than commercial services engages in such market research as may be necessary to carry out the requirements of subsection (b)(2) before making purchases for or on behalf of the Department of Defense.
• (d) The Secretary of Defense shall ensure that procurement officials in the Department of Defense conduct or obtain market research to support the determination of the reasonableness of price for commercial products or commercial services contained in any bid or offer submitted in response to an agency solicitation. To the extent necessary to support such market research, the procurement official for the solicitation—
  • (1) in the case of products or services acquired under section 2379 of this title , shall use information submitted under subsection (d) of that section; and
  • (2) in the case of other products or services, may require the offeror to submit relevant information.
• (e) The Secretary of Defense shall provide mandatory training for members of the armed forces and employees of the Department of Defense responsible for the conduct of market research required under subsections (c) and (d). Such mandatory training shall, at a minimum—
  • (1) provide comprehensive information on the subject of market research and the function of market research in the acquisition of commercial products and commercial services;
  • (2) teach best practices for conducting and documenting market research; and
  • (3) provide methodologies for establishing standard processes and reports for collecting and sharing market research across the Department.

§ 2379. Procurement of a major weapon system as a commercial product: requirement for prior determination by Secretary of Defense and notification to Congress

• (a) A major weapon system of the Department of Defense may be treated as a commercial product, or purchased under procedures established for the procurement of commercial products, only if—
  • (1) the Secretary of Defense determines that—
    • (A) the major weapon system is a commercial product; and
    • (B) such treatment is necessary to meet national security objectives; and
  • (2) the congressional defense committees are notified at least 30 days before such treatment or purchase occurs.
• (b) A subsystem of a major weapon system (other than a commercially available off-the-shelf item as defined in section 104 of title 41 ) shall be treated as a commercial product and purchased under procedures established for the procurement of commercial products if either—
  • (1) the subsystem is intended for a major weapon system that is being purchased, or has been purchased, under procedures established for the procurement of commercial products in accordance with the requirements of subsection (a); or
  • (2) the contracting officer determines in writing that the subsystem is a commercial product.
• (c)
  • (1) A component or spare part for a major weapon system (other than a commercially available off-the-shelf item as defined in section 104 of title 41 ) may be treated as a commercial product for the purposes of section 2306a of this title if either—
    • (A) the component or spare part is intended for—
      • (i) a major weapon system that is being purchased, or has been purchased, under procedures established for the procurement of commercial products in accordance with the requirements of subsection (a); or
      • (ii) a subsystem of a major weapon system that is being purchased, or has been purchased, under procedures established for the procurement of commercial products in accordance with the requirements of subsection (b); or
    • (B) the contracting officer determines in writing that the component or spare part is a commercial product.
  • (2) This subsection shall apply only to components and spare parts that are acquired by the Department of Defense through a prime contract or a modification to a prime contract (or through a subcontract under a prime contract or modification to a prime contract on which the prime contractor adds no, or negligible, value).
• (d)
  • (1) To the extent necessary to determine the reasonableness of the price for items acquired under this section, the contracting officer shall require the offeror to submit—
    • (A) prices paid for the same or similar commercial products under comparable terms and conditions by both Government and commercial customers;
    • (B) if the contracting officer determines that the offeror does not have access to and cannot provide sufficient information described in subparagraph (A) to determine the reasonableness of price, information on—
      • (i) prices for the same or similar items sold under different terms and conditions;
      • (ii) prices for similar levels of work or effort on related products or services;
      • (iii) prices for alternative solutions or approaches; and
      • (iv) other relevant information that can serve as the basis for a price assessment; and
    • (C) if the contracting officer determines that the information submitted pursuant to subparagraphs (A) and (B) 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.
  • (2) An offeror may submit information or analysis relating to the value of a commercial product to aid in the determination of the reasonableness of the price of such item. A contracting officer may consider such information or analysis in addition to the information submitted pursuant to paragraphs (1)(A) and (1)(B).
  • (3) An offeror may not be required to submit information described in paragraph (1)(C) with regard to a commercially available off-the-shelf item and may be required to submit such information with regard to any other item that was developed exclusively at private expense only after the head of the contracting activity determines in writing that the information submitted pursuant to paragraphs (1)(A) and (1)(B) is not sufficient to determine the reasonableness of price.
• (e) The authority of the Secretary of Defense to make a determination under subsection (a) may be delegated only to the Deputy Secretary of Defense, without further redelegation.
• (f) In this section, the term “major weapon system” means a weapon system acquired pursuant to a major defense acquisition program (as that term is defined in section 2430 of this title ).

§ 2380. Commercial product and commercial service determinations by Department of Defense

• (a) The Secretary of Defense shall—
  • (1) establish and maintain a centralized capability with necessary expertise and resources to provide assistance to the military departments and Defense Agencies in making commercial product and commercial service determinations, conducting market research, and performing analysis of price reasonableness for the purposes of procurements by the Department of Defense; and
  • (2) provide to officials of the Department of Defense access to previous Department of Defense commercial product and commercial service determinations, market research, and analysis used to determine the reasonableness of price for the purposes of procurements by the Department of Defense.
• (b)
  • (1) A contract for a product or service acquired using commercial acquisition procedures under part 12 of the Federal Acquisition Regulation shall serve as a prior commercial product or service determination with respect to such product or service for purposes of this chapter unless the senior procurement executive of the military department or the Department of Defense as designated for purposes of section 1702(c) of title 41 determines in writing that it is no longer appropriate to acquire the product or service using commercial acquisition procedures.
  • (2)
    • (A) Except as provided under subparagraph (B), funds appropriated or otherwise made available to the Department of Defense may not be used for the procurement under part 15 of the Federal Acquisition Regulation of a product or service that was previously acquired under a contract using commercial acquisition procedures under part 12 of the Federal Acquisition Regulation.
    • (B) The limitation under subparagraph (A) does not apply to the procurement of a product or service that was previously acquired using commercial acquisition procedures under part 12 of the Federal Acquisition Regulation following—
      • (i) a written determination by the head of contracting activity pursuant to section 2306a(b)(4)(B) of this title that the use of such procedures was improper; or
      • (ii) a written determination by the senior procurement executive of the military department or the Department of Defense as designated for purposes of section 1702(c) of title 41 that it is no longer appropriate to acquire the product or service using such procedures.

§ 2380a. Treatment of certain products and services as commercial products and commercial services

• (a) Notwithstanding section 2376(1) of this title , products and services provided by nontraditional defense contractors (as that term is defined in section 2302(9) of this title ) may be treated by the head of an agency as commercial products and commercial services, respectively, for purposes of this chapter.
• (b) Notwithstanding section 2376(1) of this title , services provided by a business unit that is a nontraditional defense contractor (as that term is defined in section 2302(9) of this title ) shall be treated as commercial services for purposes of this chapter, to the extent that such services use the same pool of employees as used for commercial customers and are priced using methodology similar to methodology used for commercial pricing.

§ 2380b. Treatment of commingled items purchased by contractors as commercial products

Notwithstanding section 2376(1) of this title , items valued at less than $10,000 that are purchased by a contractor for use in the performance of multiple contracts with the Department of Defense and other parties and are not identifiable to any particular contract shall be treated as a commercial product for purposes of this chapter.