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The FAR exempts commercial information technology from the Buy American Act. However, the definition of "information technology" in 2.101 is vague. A pure number-crunching system would meet the definition, while a microwave that just has a chip in it would not.

Does anyone know of any further guidance out there, such as GAO decisions (since compliance with the BAA tends to get protested), board or court decisions, or any agency guidance? I found only one court decision that mentioned the definition, and that was in a footnote commenting that the definition was broad. Not much help there.

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A contractor does not make a representation that an item is commercial information technology. There is no place in the FAR to do so. The CO makes the determination prior to releasing the solicitation, or receiving offers, that the solicitation is exempt from the BAA. I don’t see how a competing/losing vendor could protest an award if the BAA provision is not in the solicitation. They certainly could not protest after award that the provision should have been in the solicitation. If they were concerned they needed to challenge the solicitation before offers were submitted.

I think a simple determination could be made by the CO to not include the provision in the solicitation if the CO during their pre-solicitation market research found the items or similar items on the GSA Schedule 70 which is a schedule for IT and only includes commercial items.

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I would like to know more about the definition of information technology, but that article is not particularly helpful. First, it does not address the definition of information technology, other than repeating the definition. The article focuses primarily on substantial transformation. More importantly, it makes some statements that I consider suspect. For example, it states: "The BAA does not apply to subcontractors when an agency acquires commercial items." I do not know of a commercial item exception to the BAA, nor do I believe there was one in 2005 when the article was written. There is a waiver of the component test for COTS items, but that is not the same thing. Furthermore, for construction contracts, the BAA (or TAA) applies to all items of construction material installed in the project, no matter what tier of subcontractor provides it.

However, I'm always ready to learn something new, if anyone knows that there is such an exception for commercial item subcontractors.

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Whynot - the CO has to decide whether he or she is buying information technology in order to decide whether the purchase is exempt from the BAA and thus whether the clause goes in. Hence the need for guidance. That's the problem. Furthermore, the BAA clause goes in all construction solicitations and contracts, so a contractor needs help in deciding whether some of the items it is offering meet the definition and are exempt. Lots of things that get installed in construction have chips, cards and integrated circuits, but not all will meet the definition of information technology.

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I don’t think that BAA is self deleting. The solicitation in its entirety is either subject to BAA or not, BAA is not applied or self deleting on a CLIN by CLIN or item by item basis. If the BAA provision is in the solicitation then only BAA compliant product can be bid without receiving the evaluation penalty – regardless if the items are commercial IT. The BAA certification does not allow a bidder to claim exemption because of commercial IT. The BAA certification only has the vendor identify which items are BAA compliant and which items are not compliant. The CO has to look at the entire deal and decide if the BAA provision is in or out. I don’t see that decision being protested after award.

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If the BAA provision is in the solicitation then only BAA compliant product can be bid without receiving the evaluation penalty – regardless if the items are commercial IT.

Not necessarily. The evaluation factor wouldn't be applied to a low offer that was a noneligible offer if 1) there were no domestic offers or 2) there is an eligible offer that is lower than the lowest domestic offer.

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You are right. The evaluation penalty has to be applied on a CLIN by CLIN basis. However, my point is that every CLIN must be identified by the Contractor in their certification as being either BAA compliant or not. There is no place on the certification for the Contractor to identify that the CLIN is exempt from BAA because it is commercial IT. Likewise, there is no mechanism for the CO to selectively apply the BAA requirement on CLIN by CLIN basis – this is different from applying the penalty on a CLIN by CLIN basis. The BAA provision is not self deleting. If the procurement is exempt from BAA then the BAA provision and the BAA certification provision must be deleted from the solicitation.

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I don’t think that BAA is self deleting.
Whynot: I have to disagree. As an example, FAR 52.225-9 (b ) states: "This requirement does not apply to information technology that is a commercial item..."

To the OP's original question: The definition in the FAR (and in the article posted by Napolik) is from the Clinger-Cohen Act. I don't think you are going to find further clarification, except possibly at the agency level. The fairly recent policy changes addressing IT procurement for the Navy and Marine Corps use the same definition.

It sounds like the CO's are going to have to use their best judgment. Within the Dept of Navy, the purchase of IT (as a supply) usually requires higher level approvals, so the CO has resources to ask. But if the IT is part of a construction contract, as a general rule, I would say that any equipment that connects to a network is IT.

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I would tend to agree that under 52.225-9 -- Buy American Act–Construction Materials that the CO can list the exempted items in the solicitation (prior to receipt of offers). However, no similar mechanism appears to exist under 52.225-1 -- Buy American Act—Supplies.

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I'd have to agree that 52.225-1 isn't as straight forward as the construction clause, but the exemption does still exist.

25.103 – Exceptions.

(e) Information technology that is a commercial item. The restriction on purchasing foreign end products does not apply to the acquisition of information technology that is a commercial item, when using fiscal year 2004 or subsequent fiscal year funds (Section 535(a) of division F, Title V, Consolidated Appropriations Act, 2004, and similar sections in subsequent appropriations acts).

I personally wouldn't provide an itemized listing of IT equipment if the entire class has already been determined to be exempt.

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Original issue: need guidance on the definition of "information technology" for purposes of the BAA exception.

Did some digging, but hit a dead end. Here's where I went so far:

The BAA IT exception showed up in the FAR in January 2006. However, all it did was reference the IT definition in 2.101.

Checked the history of the IT definition. The original definition talked about equipment or systems that stored, manipulated controlled, etc. data or information. It included computers, ancillary equipment, software and firmware.

In December 1997 (FAC 97-03, FAR Case 96-319, 62 FR 64914), a significant exclusion was added, which remains in the current definition. It excluded equipment that merely contains embedded IT that is an integral part of a product, but for which the principal function is not the storage, manipulation, etc. of data. Examples were HVAC equipment and medical equipment that contains IT, but whose principal function is not data manipulation. However, the definition was amended with no explanation or analysis, even though the FR notice indicated that 12 comments had been received.

That's where we are today. There is a big gap between a computer system and a thermostat. Both contractors and contracting officers need to know whether equipment meets the IT definition and is exempt from the BAA. For example, a contractor might be installing a security system as part of a building renovation or even new construction. Is it exempt? Or maybe a sophisticated building management system - would it meet the definition of IT and be exempt, or would it be considered a glorified thermostat?

The FAR and the Federal Register are no help, so any other guidance would be appreciated.

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Guest Vern Edwards

ron:

I could find nothing that provides information about specific applications of the IT exemption or that sheds any light on the FAR definition of IT. I checked the GAO, the Court of Federal Claims, the boards of contract appeals, legal journals, etc. I checked every place that I could think of. Nothing.

You are on your own. Bite the bullet and make the call. We all know that you will do the right thing, and we're prepared to testify on your behalf.

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Thanks. Reminds me of the line in Blazing Saddles: "You're on your own."

I also did an initial search in Lexis, but didn't want to wade through a few hundred cases that simply used the words "information technology." I did find a Procurement Lawyer article written shortly after the exception entered the FAR. It too only repeated the definition, and then spent the rest of the analysis on substantial transformation. The author's reasoning was that the TAA threshold was $193,000, and few ITprocurements would ever be below this. Unfortunately, the construction TAA threshold is about $8m, which many construction projects will fall below. This makes the issue a very real one on a construction project. I've had several projects where we had to decide whether the equipment met the IT definition. COs won't help - they just punt it back to us.

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Guest Vern Edwards

One thought: The fact that there does not seem to be much litigation over the definition in connection with the Buy American Act might indicate that interpretation of the definition has not been much of an issue. You might take a broad but reasonable interpretation and see what happens.

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