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sylvia

Right-sizing flow-downs for small purchases

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Hypo:  I have a new purchase requisition for a commercial item (example:  a non-information technology item) in support of a FAR 15 covered contract.  Let’s assume that the item is valued under $3,000.  After conducting a competitive RFQ with pre-established evaluation criteria based solely on price, I selected the lowest price offeror (a large business and existing approved supplier with my company).  I have already spent $200,000 with the same supplier under the same FAR 15 program contract.  My question is whether I am able to use a streamlined micro-threshold purchase process and a relatively short list of FAR and DFARS clauses associated with a commercial item, or do I need to apply the longer list of FAR and DFARS and do a more robust purchase order compliance package substantiation because of the aggregate contract spend that has occurred with this supplier under the same prime contract? I am trying to assess whether I need to flow-down a longer list of customized flow-down requirements (including Buy American Act, DPAS, debarment, etc.,) from the prime contract because this micro-purchase tips the scale and becomes in reality a large purchase over the simplified acquisition threshold.  Thank you.

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Sylvia:

The terms and conditions in your contract (prime or sub) will determine your obligation to flow-down provisions and clauses. What does the contract convey? What does the person who awarded you the contract say?

Additionally, is the prime contract yours? Is the prime contract a FAR Part 15, Commercial Item contract? Is your contract, if not the prime, a commercial item contract?

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My question is whether I am able to use a streamlined micro-threshold purchase process and a relatively short list of FAR and DFARS clauses associated with a commercial item, or do I need to apply the longer list of FAR and DFARS and do a more robust purchase order compliance package substantiation because of the aggregate contract spend that has occurred with this supplier under the same prime contract? I am trying to assess whether I need to flow-down a longer list of customized flow-down requirements (including Buy American Act, DPAS, debarment, etc.,) from the prime contract because this micro-purchase tips the scale and becomes in reality a large purchase over the simplified acquisition threshold. 

You've got a subcontract for a commercial item. Read FAR Subpart 44.4, Subcontracts for Commercial Items and Commercial Components, and see if it answers your questions about flowdowns.

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Is the jist of your question whether this additional purchase from an existing subcontractor would be considered an inscope change under the subcontract (aggregate, consisting of commercial and non-commercial items or all commercial items) or a separate, stand alone, competitive, $3k purchase (a separate subcontract)? 

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4 hours ago, joel hoffman said:

Is the jist of your question whether this additional purchase from an existing subcontractor would be considered an inscope change under the subcontract (aggregate, consisting of commercial and non-commercial items or all commercial items) or a separate, stand alone, competitive, $3k purchase (a separate subcontract)? 

Our contract is not for a commercial item, but the item we are purchasing in support of our FAR 15 contract is a commercial item for a separate item, stand alone, and distinct from the previous $200,000 we spent with the supplier.

 

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1 hour ago, sylvia said:

Our contract is not for a commercial item, but the item we are purchasing in support of our FAR 15 contract is a commercial item for a separate item, stand alone, and distinct from the previous $200,000 we spent with the supplier.

Sylvia:

FAR Subpart 44.4 applies. Read it. Your prime contract should include the clause at FAR 52.244-6, Subcontracts for Commercial Items.

As for the fact that the sum of a series of contracts with a contractor exceeds the micro-purchase threshold, if you can show that it was the result of circumstances, and not of you splitting requirements, then I wouldn't worry.

Read the clauses in your prime contract and flow them down as instructed. That's the only advice I know to offer you.

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