FAR Part 12 versus FAR Part 15

[mjthomas]

I have been doing contracting for quite some time and I am getting arguments from peers on a certain topic and want to query the gurus in this forum for an answer.  We all know that FAR part 12 is for the acquisition of commercial items.  Also, you can use parts of FAR Part 13,14, and 15 in order to award a contract under FAR Part 12.  FAR 13.5 authorizes the use of simplified procedures for the acquisition of supplies and services in amounts greater than the simplified acquisition threshold but not exceeding $7 million ($13 million for acquisitions as described in 13.500(c)), including options, if the contracting officer reasonably expects, based on the nature of the supplies or services sought, and on market research, that offers will include only commercial items.

My questions is if you have a commercial item or service requirement and it is over the SAT ($7M) as described in FAR Part 13.5, are you required to use FAR part 15 procedures and the Uniform Contract Format?

[Todd Davis]

57 minutes ago, mjthomas said:

My questions is if you have a commercial item or service requirement and it is over the SAT ($7M) as described in FAR Part 13.5, are you required to use FAR part 15 procedures and the Uniform Contract Format

Even when SAP are used under FAR 13.5 the SAT remains at $150K, it does not raise to $7M (see definition of SAT at FAR 2.101). 

The contract format at FAR 12.303 states "Solicitations and contracts for the acquisition of commercial items prepared using this Part 12 shall be assembled, to the maximum extent practicable, using the following format", which is not the UCF.  FAR 12.102(c) states "Contracts for the acquisition of commercial items are subject to the policies in other parts of the FAR. When a policy in another part of the FAR is inconsistent with a policy in this part, this part 12 shall take precedence for the acquisition of commercial items."  Also, see FAR 15.204(c) which states "Supplies or services contracts requiring special contract formats prescribed elsewhere in this regulation that are inconsistent with the uniform format."

If a commercial item and over $7M, then Part 14 or 15 would be used for the acquisition procedure based on the requirements of 6.401, but not for the format of the solicitation/contract.

What do you think the answer is?

[mjthomas]

1 hour ago, Todd Davis said:

If a commercial item and over $7M, then Part 14 or 15 would be used for the acquisition procedure based on the requirements of 6.401, but not for the format of the solicitation/contract.

What do you think the answer is?

If that is the case, the UCF would be used especially if you are using FAR Part 15.  That is my answer.

[Todd Davis]

If the negotiated procedures from Part 15 are used for a commercial item, the contract format at FAR 12.203 is required and not the UCF.  This is because FAR 12.203 states "Solicitations and contracts for the acquisition of commercial items prepared using this Part 12 shall be assembled, to the maximum extent practicable, using the following format" and because FAR 15.204(c) states "Supplies or services contracts requiring special contract formats prescribed elsewhere in this regulation that are inconsistent with the uniform format."  I consider the format at FAR 12.303 to be one of the "special" formats.. maybe even extra special.  Lastly, FAR 12 states that inconsistencies between Part 12 and any other part, Part 12 takes precedence. 

[Guest Jason Lent]

4 minutes ago, Todd Davis said:

If the negotiated procedures from Part 15 are used for a commercial item, the contract format at FAR 12.203 is required and not the UCF.  This is because FAR 12.203 states "Solicitations and contracts for the acquisition of commercial items prepared using this Part 12 shall be assembled, to the maximum extent practicable, using the following format" and because FAR 15.204(c) states "Supplies or services contracts requiring special contract formats prescribed elsewhere in this regulation that are inconsistent with the uniform format."  I consider the format at FAR 12.303 to be one of the "special" formats.  Lastly, FAR 12 states that inconsistencies between Part 12 and any other part, Part 12 takes precedence. 

I wonder what is meant by "to the maximum extent practicable".

[Todd Davis]

1 hour ago, Jason Lent said:

I wonder what is meant by "to the maximum extent practicable".

It depends on the context of the statement.  It is a term that is used in other regulations and laws, not just the FAR (in which it appears 43 times).  Unless the law or regulation defines it, or if it has been interpreted by case law, I suspect it will have it standard dictionary meaning.  At least one other example of where the term is used in the FAR is in the context of competition required for SAP actions.  FAR 13.104 says the CO "must promote competition to the maximum extent practicable to obtain supplies and services from the source whose offer is the most advantageous to the Government, considering the administrative cost of the purchase."  That section goes on to state "...consider solicitation of at least three sources to promote competition to the maximum extent practicable."   Also, FAR 13 uses the term multiple times in different contexts.

Dictionary meaning (Merriam-Webster):

     Maximum: "the greatest quantity or value attainable or attained"

     Extent: "the point, degree, or limit to which something extends"

     Practicable: "capable of being put into practice or of being done or accomplished"

So, absent an existing definition in regulation or law, I would interpret it to be done to the greatest quantity possible and to the degree possible, so long as it is capable of being done.  I would exercise judgment and not expend an inappropriate or excessive amount of resources trying to achieve something that is capable of being done, but would be economically wasteful to do.  I don't believe it means the CO has discretion to not use it, just because he or she does not want to.

In the context of the contract type, I can't imagine what impediment would keep a CO from being capable of using the commercial format for a standard commercial service 99.9% of the time, if not 100% of the time.

[ji20874]

3 hours ago, mjthomas said:

We all know that FAR part 12 is for the acquisition of commercial items.  Also, you can use parts of FAR Part 13,14, and 15 in order to award a contract under FAR Part 12.

You must ("shall") use FAR Part 12 in conjunction with FAR Part 13, 14, or 15 -- take your pick depending on the particulars of your acquisition.  See FAR 12.102( b ) and 12.203.

 

[Guest Vern Edwards]

To the maximum extent practicable means as often as (or, whenever) you can.

[Jamaal Valentine]

Jason:

In my opinion, doing something to the maximum extent practicable (MEP) means following a prescribed or expected course of action or policy unless inappropriate for a particular circumstance considering things such as reasonable efforts, consistent with efficiency and economy.

MEP provides flexibility and discretion, which results in various interpretations of definitions and standards. I think the key is having a coherent and reasonable explanation to justify exercising discretion when deviating from a prescribed course of action or policy.

[Matthew Fleharty]

Jason & Todd,

Prior to being made permanent, the procedures authorized by the Test Program for Certain Commercial Items at FAR 13.5 also included the terminology "to the maximum extent practicable" yet many COs did not use the FAR 13.5 procedures for commercial acquisitions between $150k and (at the time) $6.5M - FPDS-NG data from Feb 2013 to May 2014 shows the usage rate of the Test Program in the Air Force was between 27.79% and 51.49% (large range due to coding inconsistencies).  I've yet to hear of someone that was held accountable for ignoring that prescription (though to this day I cannot understand why we continue to forego such acquisition flexibility...)

mjthomas,

To answer the OP's question, (which is "are you required to use FAR part 15 procedures and the Uniform Contract Format?") the terminology "to the maximum extent practicable" does not impose a requirement so no you do not always have to do so (even though the term shall is in that sentence, it is caveated by the use of to the maximum extent practicable).

[Boof]

Commercial over $7M:   FAR 14 or 15 and awarded on a SF1449 with commercial item clauses (with addendum if needed). 

Why the long discussion of 13.5 if it didn't apply?

If under $7M,  I would use FAR 13 and award on a SF1449. 

FAR 13.5  is no longer a test program.  It is "Simplified Procedures for Certain Commercial Items"

[Guest Vern Edwards]

11 hours ago, mjthomas said:

My questions [sic] is if you have a commercial item or service requirement and it is over the SAT ($7M) as described in FAR Part 13.5, are you required to use FAR part 15 procedures and the Uniform Contract Format?

Answer that for yourself. In doing so, remember “the fundamental principle that statutes and regulations must be read and interpreted as a whole, thereby giving effect to all provisions.” Department of the Army—Reconsideration, GAO B-401472.2, 2009 CPD ¶ 250, December 7, 2009. See also Massachusetts Mutual Life Insurance Co. v. U.S., 782 F.3d 1354, 1365 (Fed. Cir. 2015).

Now, read FAR 6.000, 6.001, 6.102, and 6.401; FAR 12.000, 12.203, and 12.303; FAR 13.000; FAR 14.103-1; FAR 15.000 and 15.204, then put them all together, think, and figure it out.

[Guest Vern Edwards]

If your acquisition is subject to CICA (see FAR 6.001) and you are going to seek competition, then you must use one of the competitive procedures described in FAR 6.102. See FAR 6.101(b). That's statutory, and there is no exception for commercial items. See FAR 12.102(c). (I'll get to inconsistencies below.) Assuming that your acquisition will exceed the SAT or the threshold in FAR Subpart 13.5, and assuming that your acquisition is not subject to one of the special methods, such as the multiple award schedule program (FAR Subpart 8.4), broad agency announcement (FAR 35.016), or A-E selection (FAR Subpart 36.6), then FAR 6.401 tells you whether you must use the procedures in Part 14 or Part 15. You did not give us enough information to enable us to answer your question about which applies in your case. So no one could answer that question about the applicability of Part 15. All they could do was point you to the rules that I just cited, which anyone who has been doing contracting "for quite some time" ought to know like the back of their hand.

Now see FAR 12.102(c) again. Are there inconsistencies between the rules in Part 14 and 15 and the rules in Part 12? Maybe. See, e.g., FAR Subpart 12.6. If there is a conflict, you go with the rule in Part 12. To the extent that there is no conflict, Part 14 or 15 applies. 

As for whether the Uniform Contract Format applies to commercial items, see FAR 12.303.

[Guest Vern Edwards]

When FAR 12.303 says that commercial item contracts "shall be assembled, to the maximum extent practicable, using the following format," it means that you must not vary from that order of assembly, (a) through (e), unnecessarily. It is not meant to indicate that the UCF might be used on occasion. It's the order in which the parts of the format are to be assembled that must be adhered to whenever practicable.