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Commercial Provisions and Clauses - Discrepency between Far 12 and FAR 52.3 Provisions and Clauses Matrix)


aordway

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I previously learned on this forum in this post that FAR 12.301 effectively limits the provisions/clauses to be used in commercial purchases to those provisions/clauses directly referenced in Part 12 (see FAR 12.301(d) where it says "Notwithstanding prescriptions contained elsewhere in the FAR, when acquiring commercial items, contracting officers shall be required to use only those provisions and clauses prescribed in this part").

As Don explained in that post, even if the prescription for a clause would normally apply to your award, you need not include it in a commercial award unless that clause is one of the few clauses listed in FAR 12. So you could effectively ignore the clause's prescription since 12.301 superceeds the actual prescription. Here is an example: 52.243-1 has the prescription "The contracting officer shall insert the clause at 52.243-1, Changes -- Fixed-Price, in solicitations and contracts when a fixed-price contract for supplies is contemplated". Just based on this prescription alone, it would seem you would want to put it in a commercial Fixed-Price award for supplies. However, since it is not a referenced clause within FAR Part 12, you actually should not include it in your award. To back up this determination, the FAR Clause Matrix in 52.3 has the Commercial Item column empty for this clause, thus showing it does not belong in a commercial award.

The problem is that the FAR Clause Matrix in 52.3 is not consistant with the guideline set by 12.301. As an example (of which there are many), provision 52.204-7 has an "A" in the Commercial Item column of the FAR Clause Matrix. This would indicate that 52.204-7 is "required when applicable" in commercial item solicitations, based on its prescription. The prescription for 52.204-7 says "Except as provided in 4.1102 (a), use the provision at 52.204-7, System for Award Management, in solicitations." [Note that 4.1102(a) does not contain a commercial solicitation exception].

So should 52.204-7 be included in a commercial solicitation or not? 12.301 seems to say it should not be used, yet the Clause Matrix says it should be included in solicitations when applicable. Which takes precedence? If the Clause Matrix is correct and it should be included when applicable in commercial solicitations, why is 52.204-7 not listed in Part 12? Note that there are clauses in 12.301 that are "required when applicable" based on their prescription, so it is not as if 52.204-7 would be the only provision or clause listed in Part 12 that still needed its prescription evaluated before insertion in the commercial solicitation/contract.

Edit: should be discrepancy, not discrepency, in the title. Looks like I can't change it at this point though.

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aorway, you wondered why the standard Changes clause wouldn't be appropriate for a commercial item supply contract. If you read the Changes clause for non-commercial supply items at 52.243-1, I think that paragraph ( a ) and ( a )(1) are inconsistent with and contradict the concept of purchasing a standard commercial item

"( a ) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following:

(1) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Government in accordance with the drawings, designs, or specifications.

(2) Method of shipment or packing.

(3) Place of delivery."

A manufacturer likely wouldn't normally agree to allow a customer to unilaterally direct technical changes to its products, which may well include patents and/or licensed use of someone else's patent. Production lines, materials, processes, packaging, shipping and storage are often developed for a company's standard products, not for customized or individually designed orders. Can you imagine the disruption to assembly lines to customize an order within the overall product line? How about liability and product warranties, etc. associated with customer modified items?

That surely must be why 52.212-4 ( c ) states that changes must be mutually agreed to. The concept of commercial item acquisitions seems to be predicated upon the concept of purchasing standard items to the maximum extent possible, using standard commercial practices. For economy, efficiency and quality.

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I forgot to add that the language in ( a ) (1 ) seems to be primarily intended for contracts with government furnished design specifications for items to be specially manufactured for the government.

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Vern,

I believe 12.102[c] does indeed direct me going forward; I am to listen to FAR 12 despite what the Clause Matrix in 52.3 says. Thank you.

However, that still does not answer the question of "why in the world is the Commercial Item column in 52.3 not in sync with FAR 12?" You would think that the Commercial Item column was specifically written around the requirements of FAR 12. Who in their right mind would fill out that Matrix with specific info regarding commercial items, and not read the "Acquisition of Commercial Items" FAR part? I was under the assumption that the Clause Matrix was a consolidated list of provisions/clauses and their applicability based on the FAR itself. Apparently that is not the case, and whever wrote the Clause Matrix just willy nilly filled it out. Just venting. I understand that the answer to my questions is that Clause Matrix was just not written well. It's just confounding how that happens!

Don,

Regarding 52.204-7, it makes perfect sense why it would not specifically be listed in Part 12 since it is already effectively included within 52.212-4. I was not aware of that [but knew in my head it must be included SOMEWHERE since Part 12 does not have us add a standalone SAM requirement].

Joel,

I agree with you that 52.243-1 does not fit for commercial items, and I was aware that a "commercial changes clause" alternative was already baked into 52.212-4. I was just using this as an example of when the Clause Matrix Commercial Item column IS accurate, and how the Clause Matrix does indeed understand on some level the 12.301(d) "rule" that clauses not referenced in Part 12 need not be included for commercial items (and that those clauses should have a BLANK cell in the Commercial Item column of the Clause Matrix). Yet this fact just added to me being confounded in how the Clause Matrix can get 52.243-1 right but get 52.204-7 (and many others) wrong.

Thanks all. I think the issue is resolved.

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aordway, FYI, the actual work of promulgating the FAR is accomplished by committees of individuals from various agencies who supposedly have expertise in a particular subject matter. For example there is a government property committee, a contract administration committee and a quality assurance committee. These committees write the rules for a particular FAR part, including the clauses that are required for use by that part. Thus, theoretically, the same committee that wrote FAR Part 12 was responsible for identifying the information relevant to Part 12 to be included in the matrix. However, committee work does not always get into the FAR because it is reviewed by the FAR Councils and OMB who can change what the committee approved.

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In March 2015, DoD requested to open a FAR Case to remove the FAR Matrix. I know this having seen an email from GSA directed to CAAC members requesting feedback. DoD wrote (I added bold for emphasis):

We recommend removing the FAR clause matrix for the following reasons:

1. The matrix was a paper-based solution which cannot provide sufficient information regarding required clause usage. In order to include the correct provisions and clauses in a contract it is necessary to employ a contract writing system based on the use of clause logic, with appropriate input from the contracting officer in those instances in which human judgment is required. A paper-based matrix is incapable of providing the kind decision tree necessary to conclude whether a clause should be included in the solicitation/contract.

2. So many of the clauses are "as applicable," which provides insufficient information upon which to base a decision.

3. The applicability to commercial items is not accurately reflected in many cases.

4. Too many provisions and clauses are required to be incorporated in full text.

5. There are various other anomalies and inaccuracies.

6. When DoD has tried to use the clause matrix in several undertakings (e.g., building the new clause logic system, or analyzing applicability of clauses to commercial items), it has not proved to be an adequate basis to achieve success.

The DFARS does not include a clause matrix.

To the original poster: don't worry about what the matrix says.

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Guest Vern Edwards

I think that email provides a good assessment of the matrix. The matrix was a good idea in 1983, when it was developed, but it has outlived its usefulness. I would not be sorry to see it removed.

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Vern, I am surprised about your feelings towards the FAR matrix. The matrix was one of the topics that you covered at some length in your FAR Bootcamp class. Without the matrix, the only way for a fledgling contract specialists to learn the provisions/clauses required in their solicitation is to 1) read and memorize the prescription for each provision/clause; 2) use someone's "template"; or 3) use software, such as PRODOC, that generates the provisions/clauses for you based upon answers to questions.

I would like to see the matrix in an easier to use and expanded format. For example, I should be able to select which provisions and clauses I want to see. If I have a commercial item services requirement, I should be able to select that and the matrix would tell me which clauses are required or optional for that procurement. It would also be really helpful if the matrix would include a brief description of the prescription so that the contract specialist could look down the list to determine which provisions/clauses to include in his or her solicitation.

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Meteec,

I cut and past the matrix off the official FAR site into an Excel Spreadsheet and then I have filters and can sort. Problem is that it gets out of date quickly. I was actually surprised that it dropped into excel so easily with few adjustments needed. Be nice if they put it on the FAR site already in a spreadsheet with filters. Easy to do now we have graduated from paper.

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Hi, Boof. I agree the matrix is a good teaching tool- or at least I found it useful starting out. That may be the best reason to take it out of the FAR- it will probably be better maintained in a decentralized manner if removed.

I'd also raise you one and just put the actual prescription in the matrix rather than a description thereof . . . most seem pretty short.

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Guest Vern Edwards

When the matrix made its first appearance in the first edition of the FAR it was considered a great thing -- even a marvel of sorts. But it soon became apparent that the councils would not keep it up to date and now the clause logic is deeply flawed. Too bad, but it's time to let it go.

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It appears there is a general consensus that a comprehensive and accurate FAR clause matrix is a useful tool for contracting professionals. That being said, I don't know that I agree with the sentiment that because the FAR Clause Matrix is broken is should be scrapped - I think a better solution is for it to be fixed.

Even in its current state, I find the matrix under FAR Subpart 52.3 useful. While the coding cannot be used to replace judgment when analyzing provisions and clauses (examples have already been provided where doing so will result in errors), the listing and hyperlinking (in the online version) of the prescriptions for each provision/clause does make finding the information one needs to analyze a clause more expedient than combing through each FAR Part manually.

Maybe this is the idealist in me, but I don't think it is to much to ask that as the FAR Council adds new provisions and clauses to the FAR, they also accurately list them in the matrix (after all, they are/should be the policy experts in that regard).

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Matthew, good points. Does anyone else have any other ideas for how to improve the matrix? Another improvement is the ability to export to different formats, such as XML.

Vern, if it is not too much trouble, can you please elaborate on how "the clause logic is deeply flawed"?

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Hi Jamaal, by "FAR supplements," are you referring to FAC updates? If so, I think that is a great idea, especially as a strategy to maintain the matrix over time.

Another thing I think could be helpful is if you selected a commercial item acquisition, the matrix would show, in order, the check off clauses in FAR Clause 52.212-5 along with the prescriptions. This would save time entering the fill-ins.

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I believe Jamaal is referring to the DFARS and AFFARS (and other agency supplements) by his use of the term "FAR Supplements." On that issue, I've created a draft of a matrix for the DFARS with references, but haven't hyperlinked it or filled out the various section filters (FP SUP, CR SUP, etc.) yet. I tried pushing the idea up the chain to see if there was a need for it at the DoD level (with the hope that one would be incorporated into the DFARS), but my comments fell on deaf ears (likely due to consistency with the DoD's position to eliminate the FAR matrix altogether as mentioned by GeoJeff in post #8).

Jamaal, as for the blanks in the table, if the matrix was accurate (which we've already identified that in cases it is not) the blanks would indicate that a particular provision or clause should not be used or considered for use. Not sure if replacing the blank space with a "N/A" would be helpful if the purpose of the blank space is understood.

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Guest Vern Edwards

Vern, if it is not too much trouble, can you please elaborate on how "the clause logic is deeply flawed"?

Gosh, metteec, it seems rather obvious. For one thing, the "Principal Type and/or Purpose of Contract" categories are not mutually exclusive. For example, FP/SUP and IND DEL are not mutually exclusive. Neither are FP SUP and SAP and FP SUP and CI. Neither are T&M and SAP. Thus, looking in the FP SUP column does not produce an appropriate selection of clauses for all fixed-price supply contracts, and looking in the IND DEL column does not give you all clauses for indefinite-delivery contracts. I understand why, but the matrix logic is no less flawed because of the reason.

Some of the clause assignments are wrong, which is a logical flaw. See e.g. the entry for FAR 52.202-1. It indicates that the clause is required in all FP SUP and CR SUP contracts. But the clause does not apply to fixed-price and cost-reimbursement contracts at or below the simplified acquisition threshold (as opposed to contracts awarded using SAP). It is listed as required when applicable for FP R&D contracts, but required for CR R&D contracts, a distinction not supported by the clause prescription in FAR 2.201.

The matrix includes no instructions to help newbies sort things out. A logical fix would be possible, but very complicated, probably beyond the competence of the FAR councils. Without a fix, the matrix is misleading to the very kinds of people for whom you all think it is helpful.

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