FARCRAZY

Great discussion - thanks everyone. Note - there is no contract currently in place so I cannot just review contract to see if CAS applies. My concern is / was if any distinction exists, specifically with regards to CAS coverage, with products determined commercial vice products treated as commercial. My concern was piqued based on the DFARS cite that specifically states products treated as commercial are not determined commercial and may not in fact be commercial - per FAR 1.2 definition of commercial product/service. Given all the very valuable comments and my consideration of regulations I am pretty confident that if the Govt uses FAR 12 procedures to procure a product or service that is being treated commercial, then CAS does not apply. I am leaning heavily on the use of FAR 12 procedures with emphasis on the contract type, called out in FAR 12.207 - 48 CFR 9903.201-1 (b) CAS exemptions.

FAR 12.214 - is clear that CAS does not apply to contracts and subcontracts for the acquisition of commercial products or commercial services. My issue / concern is that the contract is for the acquisition of products or services that are being "treated as commercial" - these products / services have not been determined commercial. DFARS 212.102(a)(iv) - states - "The decision to apply commercial product and commercial service procedures to the procurement of supplies and services from nontraditional defense contractors does not require a commercial product or commercial service determination and does not mean the item is commercial;" So, basically I have a contract that was issued using FAR 12 procedures for product/services that are being "treated as commercial" and not products / services that are determined commercial. 9903.201-1 CAS exemptions include "Contracts and subcontracts authorized in 48 CFR 12.207 for the acquisition of commercial items." Products/Services treated as commercial are authorized in 48 CFR 1207 because Products/Services treated as commercial can use FAR Part 12 procedures.

Thanks to all the great responses. I’m fairly confident that because the item/services being contracted are not determined commercial (as define in FAR part 2), and no other exemptions apply, CAS is applicable. The items / Services are only being “treated commercial”, so not exempt from CAS, reference 48 CFR 9903.201-1(b). FAR provides permissive authority for items / services to be treated commercial when provided by non traditional defense contractors. any further insight and comments are welcomed.

The contractor is a non traditional defense contractor because the contractor is not and has not performed any CAS covered contract for at least one year

A "nontraditional defense contractor", with respect to a procurement or with respect to a transaction authorized under section 4021(a) or 4022 of this title, means an entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by the Department of Defense for the procurement or transaction, any contract or subcontract for the Department of Defense that is subject to full coverage under the cost accounting standards prescribed pursuant to section 1502 of title 41 and the regulations implementing such section.

Does CAS apply to a FAR 12 contract that is issued to a nontraditional defense contractor for items that are being treated as commercial?