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Is there any DoD guidance or work instructions that allows for a non-developmental item (NDI) support service to qualify as a commercial item based on Definition 5 (versus Definition 6) of the commercial item definition in FAR 2.101?

Previous Hypothetical Scenario:

1. Sister A signed a sole-source FFP prime contract with a DoD customer, and FAR 52.215-10 was included.

2. FAR 52.215-10 was flowed down in the inter-organizational transfer (IOT) at price with Sister B (see FAR 31.205-26).

3. Sister A performed a price analysis of Sister B's IOT based on FAR 15.401 and Table 15-2 II.A of FAR 15.408.

4. No cost data from Sister B was included in Sister's A proposal to the DoD customer because of commerciality.

5. Sister A's price analysis was included in its proposal, and it was based on PO history and an unpublished price list.

6. The PO history was not shown to be fair and reasonable, and Sister B did not provide any data of sales to the public.

Current Hypothetical Approach:

1. If possible, Sister A wants to utilize any DoD guidance or work instructions to deem the NDI support services as commercial under Definition 5 instead of Definition 6 (because there is no apparent market price or catalog with any sales to the public.)

2. If possible, Sister A wants to obtain a statement from Sister B that these NDI support service are "similar" to other support services provided at the same time to the general public. (There might not be any sales data to the public provided by Sister B.)

3. If possible, Sister A wants to obtain sales data from Sister B for NDI support services provided to other federal agencies for similar services as a basis for (hopefully) an "appropriate" price analysis following the FAR "policy" outlined in FAR 15.404-1.

The DoD Sample Commercial Item Checklist in Appendix B of the 08-01-2011 "Draft" Commercial Item Handbook (Version 2.0) shows NDI being grouped on page 74 with other commercial items in Part 1 prior to considering commercial services in Part 2.

http://www.acq.osd.mil/dpap/cpic/draftcihandbook08012011.docx

Is there anything else that Sister A in the above hypothetical approach can use in good faith to deem these NDI support services as commercial items under Definition 5 instead of Definition 6 of FAR 2.101? (I believe the definition does not provide for it.)

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Nondevelopmental items are supplies by definition:

“Nondevelopmental item” means --

(1) Any previously developed 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;

(2) Any item described in paragraph (1) of this definition that requires only minor modification or modifications of a type customarily available in the commercial marketplace in order to meet the requirements of the procuring department or agency; or

(3) Any item of supply being produced that does not meet the requirements of paragraph (1) or (2) solely because the item is not yet in use.

FAR 2.101

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Nondevelopmental items are supplies by definition...

Thank You. I wish there was a clear provision in FAR 2.101 for NDI support services to qualify for commerciality like Definition 5 of the commercial item definition. The draft version of the DoD handbook says on page 4 that NDI is a category related to commercial item but not synonymous with commercial item. Also, page 1 follows a similar outline to the FAR 2.101 definition by first defining (1), (2), and (3) and then saying a support service is considered commercial if it meets the commercial item definition "as previously defined." Do you know what the DoD is doing out in the field, or if there have been any DoD memos or discussion on this topic?

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I've never heard of any initiative to include services in the definition of "nondevelopmental item."

Thank You. Have you heard of any initiative to include support services for qualifying NDI (i.e. which qualify as commercial under Definition 8 of the commercial item definition in FAR 2.101) as qualifying for Definition 5 commercial item support services? (I am sorry I did not make this clearer in my earlier posts that the NDI qualifies for Definition 8.) Definition 6 could be used to claim these NDI support services are commercial services, but the established catalog or market price requirement does not appear to have been met. In the above hypothetical approach, Sister A believes that it would have a better chance with Definition 5 because of Sister B (hopefully) providing "similar services" to the public and (hopefully) during the same time as the contract.

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I am assuming that you are referring to Sister B providing support services for an NDI.

If the services are the type of service included in definition 5 (installation services, repair services, training services, and other services), are for support of a commercial item, and the source of the services provides similar services to the general public under similar terms and conditions, you meet definition 5. Therefore, one of the conditions for definition 5 is not met, and you are, in essence, asking to expand definition 5 so the services can be considered commercial despite the failure to meet that condition. I am not aware of any effort within DoD to expand the definition as you are suggesting.

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I am assuming that you are referring to Sister B providing support services for an NDI.

Yes, that is correct. Sister B has asserted that its NDI qualifies for Definition 8 of the FAR 2.101 commercial item definition. I agree with you that Definition 5 specifically references (1), (2), (3), and (4). Sister B wants to assert that its NDI support services qualify under Definition 6 without an established catalog (or at least sales data allowing Sister A to make that inference). With the above hypothetical approach, Sister A is trying to explore any other potential options (e.g. Definition 5). Thank you for your input about DoD.

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