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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: January 15, 2004

SUBJECT: Federal Acquisition Regulation (FAR); Commercially Available Off-the-Shelf Items

SOURCE: Federal Register, January 15, 2004, Vol. 69, No. 10 page 2447

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Proposed Rule

SYNOPSIS: It is proposed that the FAR be amended to identify "commercially-available-off-the-shelf" (COTS) items as a subset of "commercial items," and to identify the provisions of law that are inapplicable to contracts for COTS.

EDITOR'S NOTE: For more on the advance notice of proposed rulemaking (ANPR), see the January 30, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Laws Inapplicable to Acquisitions of Commercially Available Off-the-Shelf Items."

DATES: Comments are due on or before March 15, 2004.

ADDRESSES: Submit comments to General Services Administration, FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405, or by e-mail to farcase.2000-305@gsa.gov. Cite "FAR Case 2000-305" in all correspondence related to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Gerald Zaffos, 202-208-6091.

SUPPLEMENTAL INFORMATION: Certain laws have already been determined to be inapplicable to all commercial items as a result of the implementation of the Federal Acquisition Streamlining Act of 1994 (see FAR 12.503, Applicability of Certain Laws to Executive Agency Contracts for the Acquisition of Commercial Items). Section 4203 of the Federal Acquisition Reform Act (part of the Clinger-Cohen Act), requires that the FAR list the provisions of law that are inapplicable to contracts for COTS items, but the list of statutes cannot include a provision of law that provides for criminal or civil penalties.

On January 30, 2003, an ANPR was published that listed additional provisions of law that could be determined inapplicable to COTS, and comments were solicited. Seven respondents submitted comments, including the U.S. Trade Representative, the Department of Labor, and several other agencies, and their concerns are recognized. However, the proposed rule lists the universe of laws that could be determined inapplicable to COTS, and comments are being sought that will help the administrator of the Office of Federal Procurement Policy (OFPP) make the statutory determination that it would be in the best interest of the government to maintain the applicability of certain of those laws.

The following changes to the FAR are being proposed:

• FAR 2.101, Definitions, would be amended to add the following definition of COTS: "COTS (1) is a subset of a commercial item and means any item of supply that is (i) a commercial item (as defined in this section); (ii) sold in substantial quantities in the commercial marketplace; and (iii) offered to the government, without modification, in the same form in which it is sold in the commercial marketplace; [and] (2) does not include bulk cargo...such as agricultural products and petroleum products."
  
  
• FAR 12.505, Applicability of Certain Laws to Contracts and Subcontracts for the Acquisition of COTS Items, would be added. It would cite the laws that are "not applicable to contracts or subcontracts, at any tier, for the acquisition of COTS items."
  
  The cited laws are either included in FAR 12.503 or FAR 12.504, Applicability of Certain Laws to Subcontracts for the Acquisition of Commercial Items, or both, except for the following, which would be added:
  
  
  • 19 U.S.C. 2501, et seq., Trade Agreements Act (see FAR 52.225-5, Trade Agreements)
    
    
  • 19 U.S.C. 2512, et seq., Trade Agreements Act (see FAR 52.225-5)
    
    
  • 29 U.S.C. 793, Affirmative Action for Handicapped Workers (see FAR 52.222-36, Affirmative Action for Workers with Disabilities)
    
    
  • 31 U.S.C. 3324, Restrictions on Advance Payments (see Alternate I to FAR 52.212-4, Contract Terms and Conditions -- Commercial Items, which permits payment upon notice of shipping)
    
    
  • 38 U.S.C. 4212, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (see FAR 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans)
    
    
  • 38 U.S.C. 4212(d)(1), Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (see FAR 52.222-37, Employment Reports for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans)
    
    
  • 41 U.S.C. 10a, et seq., Buy American Act -- Supplies (see FAR 52.225-1, Buy American Act -- Supplies, and FAR 52.225-3, Buy American Act - Free Trade Agreements - Israeli Trade Act)
    
    
  • 42 U.S.C. 6962(c)(3)(A), Estimate of Percentage of Recovered Material EPA-Designated Product (limited to the certification and estimate requirements) (see FAR 52.223-9, Estimate of Percentage of Recovered Material EPA-Designated Product)
  
  
• FAR 52.212-XX, Contract Terms and Conditions Required to Implement Statutes or Executive Orders -- Commercially Available Off-the-Shelf (COTS) Items, would be added. It would be similar to FAR 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders -- Commercial Items, except the contracting officer would not be able to check the following clauses as applicable to acquisitions of COTS items:
  
  
  • FAR 52.203-6, Restrictions on Subcontractor Sales to the Government (Jul 1995), with Alternate I (Oct 1995)(41 U.S.C. 253g and 10 U.S.C. 2402)
    
    
  • FAR 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Dec 2001)(38 U.S.C. 4212)
    
    
  • FAR 52.222-36, Affirmative Action for Workers with Disabilities (Jun 1998)(29 U.S.C. 793)
    
    
  • FAR 52.222-37, Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Dec 2001)(38 U.S.C. 4212)
    
    
  • FAR 52.223-9, Estimate of Percentage of Recovered Material Content for EPA-Designated Products (Aug 2000)(42 U.S.C. 6962(c)(3)(A)(ii)), or Alternate I
    
    
  • FAR 52.225-1, Buy American Act -- Supplies (June 2003)(41 U.S.C. 10a-10d)
    
    
  • FAR 52.225-3, Buy American Act -- Free Trade Agreements -- Israeli Trade Act (June 2003)(41 U.S.C. 10a-10d, 19 U.S.C. 3301 note, 19 U.S.C. 2112 note), or Alternates I or II
    
    
  • FAR 52.225-5, Trade Agreements (June 2003)(19 U.S.C. 2501, et seq., 19 U.S.C. 3301 note)
    
    
  • FAR 52.239-1, Privacy or Security Safeguards (Aug 1996)(5 U.S.C. 552a)
    
    
  • FAR 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (Apr 2003)(46 U.S.C. 1241 and 10 U.S.C. 2631), or Alternate I
  
  Only the following clauses would be required to be flowed-down to subcontractors:
  
  
  • FAR 52.219-8, Utilization of Small Business Concerns (Oct 2000) (15 U.S.C. 637(d)(2) and (3)), in all subcontracts that offer further subcontracting opportunities
    
    
  • FAR 52.222-26, Equal Opportunity (Apr 2002) (E.O. 11246)

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

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