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University Research Considered a Commercial Item

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Is university research considered a commercial item? Why or why not, and have you had experience arguing commerciality of research as a commercial service?  Technically we could hire any commercial research firm to perform research and provide data, but prefer to partner with a university. What might be arguments against or for the research being considered a commercial item?

 

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Sure, if the R&D services are of a type offered and sold competitively in substantial quantities in the commercial marketplace based on established catalog or market prices (FFP) for specific tasks performed or specific outcomes to be achieved and under standard commercial terms and conditions.

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Why would you want to classify university research as a commercial item?  Such contracts would normally have to be a type of fixed price contract.  In my experience working at ONR, research contracts at universities are generally not susceptible of being priced on a fixed price basis unless the contract is a fixed price LOE contract as described in FAR 16.207.

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I think that one would really have to stretch the definition and intent of commercial item or service to classify university research as commercial item or service. 

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There is no categorical distinction between "university research" and "commercial item". If the research to be performed by a university meets the definition of "commercial item", it's a commercial item. I would expect some research done by universities to meet the definition of "commercial item".

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We have always treated them as non-commercial and will likely continue to do so; there have been no changes there.  It is still a discussion topic. I did read a couple of blog posts surrounding the question, but it seems there are very divided opinions on the subject and I was unable to find many finite examples of a federal contractor treating university services as commercial.  It seems as though there is at least some agreement in the community that the definition of commercial may be successfully applied in some circumstances. However, it seems like a few organizations have pondered the question and a lot of folks have an opinion, but no one has any real examples--only hypothetical situations.  I was hoping to find some examples to discuss with my team.

 

 

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What qualifies university research as a “commercial service” for FAR based acquisitions, price-wise?  I didn’t notice anything in the article to support that conclusion. The article discusses influence of private industry sponsors of university research projects.

If pricing the research as a time and materials effort, FAR 12.207 (b) must be followed.

Construction is obviously done commonly for the commercial sector. . That alone doesn’t make it a “commercial item” or “commercial service”. 

For the most part, other than for installation of specific items, most construction projects are unique and must be individually estimated and priced. Even common repair services are often done on a time and material basis or individually priced during or after a service call. 

Site conditions, market conditions, labor, materials, subcontracting availability, location, time of year, risk factors all must be considered in addition to historic unit costs or estimating guide unit price costs. There are no commonly agreed to contract standard terms and conditions. Numerous organizations publish their own, editable model contracts. 

I recently learned that our deer hunting club’s leased old house, used  as our camp house in a rural community in Alabama, was reportedly ordered from a Sears Roebuck Catalog back in circa 1903-1906. As recently as the 1980’s, Sears advertising included the slogan “Sears has everything”. 😁

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