Commercial Items

[here_2_help]

DOD Commercial Item Group (CIG) is reporting--

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DOD Contracting Officers: if you are awarding Contracts related to #COVID19 - Our team just issued a Determination that these types of supplies or services are "commercial", and in combination with FAR18 (national emergency declaration) any award under $13M for COVID-19 can use simplified acquisition procedures!!!

- Please shoot me an email if you need a copy of this for your Contract file. ryan.c.connell.civ@mail.mil

Not a question, obviously. More of a PSA, I guess.

[Don Mansfield]

Unless there is a new authority they are relying on, it seems that they are confused. While the authority to use SAP up to $13M for acquisitions of commercial items covers response to national emergencies, the authority to treat any acquisition as an acquisition of commercial items does not. FAR 13.501:
 

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(c) Under 41 U.S.C. 1903, the simplified acquisition procedures authorized in this subpart may be used for acquisitions that do not exceed $13 million when-

           (1) The acquisition is for commercial items that, as determined by the head of the agency, are to be used in support of a contingency operation; to facilitate the defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack; to support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provision of international disaster assistance; or to support response to an emergency or major disaster, or

           (2) The acquisition will be treated as an acquisition of commercial items in accordance with 12.102(f)(1).

 

 FAR 12.102(f)(1):

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Contracting officers may treat any acquisition of supplies or services that, as determined by the head of the agency, are to be used to facilitate defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack, as an acquisition of commercial items.

Nothing about emergency or major disaster.

[here_2_help]

11 minutes ago, Don Mansfield said:

Unless there is a new authority they are relying on, it seems that they are confused. While the authority to use SAP up to $13M for acquisitions of commercial items covers response to national emergencies, the authority to treat any acquisition as an acquisition of commercial items does not.

Nothing about emergency or major disaster.

Well, I suppose you can send Ryan a letter of concern/correction. He put his email right there in the announcement.

[C Culham]

While I would hope not the poorly worded statement stands to possibly also confuse folks on how they might code a procurement as well considering that FPDS has added a new National Interest Action (NIA) Code to the NIA field for coding procurements related to COVID19.   

[formerfed]

I bet this is correct as stated.  Ryan and his team are all sharp.  Just a guess but determining this facilitates “defense against....” is a justification.  Regardless of my speculation, I’m sure this is what they intended.

We’re speculating and there’s no need. The determination is in place.

[here_2_help]

FYI, Kim Herrington just publicly congratulated Ryan and his team. Endorsed the public announcement as is.

Moral of the story: This ain't business as usual.

[formerfed]

1 hour ago, here_2_help said:

Moral of the story: This ain't business as usual.

We are all nit picking on multiple topics and the country and world is in a crisis.  

If I were a CO and had this in hand, I would proceed without questioning.  

This reminds me of a saying from one of the most knowledgeable acquisition people ever - “I put in place the perfect contract but the mission failed”

[Don Mansfield]

3 hours ago, formerfed said:

I bet this is correct as stated.  Ryan and his team are all sharp.  Just a guess but determining this facilitates “defense against....” is a justification.  Regardless of my speculation, I’m sure this is what they intended.

We’re speculating and there’s no need. The determination is in place.

Just stop. The COVID-19 pandemic is not a cyber, nuclear, biological, chemical, or radiological attack. That authority is inapplicable.

1 hour ago, formerfed said:

If I were a CO and had this in hand, I would proceed without questioning.  

I would say knock yourself out. Just don't insult people's intelligence by claiming you had the legal authority to proceed based on FAR 12.102(f).

[formerfed]

1 hour ago, Don Mansfield said:

Just stop. The COVID-19 pandemic is not a cyber, nuclear, biological, chemical, or radiological attack. That authority is inapplicable.

I would say knock yourself out. Just don't insult people's intelligence by claiming you had the legal authority to proceed based on FAR 12.102(f).

The original post never mentioned FAR 12.102(f) and nothing claimed that’s the basis.   Ryan states FAR 18 which says under 18.202

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d)  Simplified procedures for certain commercial items. The threshold limits authorized for use of this authority may be increased when it is determined the acquisition is to facilitate defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack; to facilitate provision of international disaster assistance; or to support response to an emergency or major disaster. (See 13.500(c).)

then under FAR 13.500 (c)

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c) Under 41 U.S.C. 1903, the simplified acquisition procedures authorized in this subpart may be used for acquisitions that do not exceed $13 million when-

            (1) The acquisition is for commercial items that, as determined by the head of the agency, are to be used in support of a contingency operation; to facilitate the defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack; to support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provision of international disaster assistance; or to support response to an emergency or major disaster, or

            (2) The acquisition will be treated as an acquisition of commercial items in accordance with 12.102(f)(1).

As I mentioned, Ryan and his team are sharp.  When they do something, it’s done right and responsively.  Also nobody knows commercial items like they do. If they say supplies and services will be commercial, they are.

 

[Don Mansfield]

7 minutes ago, formerfed said:

The original post never mentioned FAR 12.102(f) and nothing claimed that’s the basis.   Ryan states FAR 18 which says under 18.202

As I mentioned Ryan and his team are sharp. 

Let's take a look at FAR 18.202:
 

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(c) Treating certain items as commercial. Contracting officers may treat any acquisition of supplies or services as an acquisition of commercial items if the head of the agency determines the acquisition is to be used to facilitate the defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack. (See 12.102(f)(1) and 13.500(c).)

(d) Simplified procedures for certain commercial items. The threshold limits authorized for use of this authority may be increased when it is determined the acquisition is to facilitate defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack; to facilitate provision of international disaster assistance; or to support response to an emergency or major disaster. (See 13.500(c).)

Two different authorities.

The authority to treat certain items as commercial (the same authority stated at FAR 12.102(f)(1)) does not apply to acquisitions to support response to an emergency or major disaster. Period. End of story.

The authority to use SAP up to $13 million for the purchase of commercial items does apply to acquisitions to support response to an emergency or major disaster.

Anyone who reads (c) and (d) and concludes that you can treat an item as commercial because it will be used to support response to an emergency or major disaster is not sharp.
 

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41 U.S.C. 1903

§1903. Special emergency procurement authority

(a) Applicability.-The authorities provided in subsections (b) and (c) apply with respect to a procurement of property or services by or for an executive agency that the head of the executive agency determines are to be used-

(1) in support of a contingency operation (as defined in section 101(a) of title 10);

(2) to facilitate the defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack against the United States;

(3) in support of a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate the provision of international disaster assistance pursuant to chapter 9 of part I of the Foreign Assistance Act of 1961 (22 U.S.C. 2292 et seq.); or

(4) in support of an emergency or major disaster (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)).

(b) Increased Thresholds and Limitation.-For a procurement to which this section applies under subsection (a)-

(1) the amount specified in section 1902(a), (d), and (e) of this title shall be deemed to be-

(A) $15,000 in the case of a contract to be awarded and performed, or purchase to be made, in the United States; and

(B) $25,000 in the case of a contract to be awarded and performed, or purchase to be made, outside the United States;

(2) the term "simplified acquisition threshold" means-

(A) $750,000 in the case of a contract to be awarded and performed, or purchase to be made, in the United States; and

(B) $1,500,000 in the case of a contract to be awarded and performed, or purchase to be made, outside the United States; and

(3) the $5,000,000 limitation in sections 1901(a)(2) and 3305(a)(2) of this title and section 2304(g)(1)(B) of title 10 is deemed to be $10,000,000.

(c) Authority To Treat Property or Service as Commercial Product or Commercial Service.-

(1) In general.-The head of an executive agency carrying out a procurement of property or a service to which this section applies under subsection (a)(2) may treat the property or service as a commercial product or a commercial service for the purpose of carrying out the procurement.

(2) Certain contracts not exempt from standards or requirements.-A contract in an amount of more than $15,000,000 that is awarded on a sole source basis for a product or service treated as a commercial product or a commercial service under paragraph (1) is not exempt from-

(A) cost accounting standards prescribed under section 1502 of this title; or

(B) cost or pricing data requirements (commonly referred to as truth in negotiating) under chapter 35 of this title and section 2306a of title 10.

 

The statute is clear. The authority in (b) applies to (a)(1)-(4). The authority in (c) applies to (a)(2) only.

[formerfed]

Don,

I see where we have a disconnect.  I don’t think Ryan’s determination is saying everything is treated as if they are commercial.  So that part doesn’t apply.  I think he’s saying a class of procurements in response to COVID-19 are ALL commercial.  It’s not a situation where non-commercial are treated as commercial.  Rather the nature of the buys ARE commercial. So using the raised FAR 13 threshold to buy commercial items are in effect for COVID-19 responses.  He made that distinction in a recent post saying everything qualifies as commercial using the FAR part 2 definition.

[Don Mansfield]

I've read the determination. It's not as simple as "an item is commercial if it's being used to respond to the COVID-19 pandemic." They actually evaluated a laundry list of specific items and deemed them commercial. 

[Retreadfed]

7 minutes ago, Don Mansfield said:

I've read the determination

Don, is it available for public release?  If so, where can we find a copy?

[formerfed]

9 minutes ago, Retreadfed said:

Don, is it available for public release?  If so, where can we find a copy?

This is from Ryan.  Let me know if you can’t download it

https://dl.orangedox.com/COVIDCID

[Retreadfed]

Thanks.  I got it to open.  Interesting, this classifies certain brands of toilet paper as a commercial item.  However, Charmin was not one of the brands listed.  I guess Mr. Whipple's admonition not to squeeze the Charmin scared DCMA off.

[Far_Fetched]

2 hours ago, formerfed said:

This is from Ryan.  Let me know if you can’t download it

https://dl.orangedox.com/COVIDCID

Thanks for sharing