B. Location in FAR

1. Comment: A respondent noted that, while FAR part 10 contains scant detail on market research, there are existing market research techniques and information embedded in chapter 2 of the DoD Commercial Item (CI) Handbook at http://www.acq.osd.mil/dpap/Docs/cihandbook.pdf. The respondent stated that the Handbook might be instructive for executive agencies to use as part of any training requirements.

Response: This comment is outside the scope of the FAR case. However, it has been forwarded to both the Defense Acquisition University and the Federal Acquisition Institute for their consideration. The current Commercial Item Handbook (version 1.0) was published November 2001 and is currently in revision.

2. Comment: A respondent stated its conclusion that the section 826 requirement for contractors with contracts exceeding $5 million to perform market research for "other than commercial items'' is misplaced because the title of FAR subpart 44.4 is "Subcontracts for Commercial Items and Commercial Components.'' The respondent suggested that a better location for the statutory requirement would be at FAR 44.303.

Response: The Councils agree that the requirement was misplaced in FAR subpart 44.4 and have relocated the clause prescription to FAR part 10, Market Research (rather than FAR subpart 44.3, as suggested by the respondent). The statute and policy require contractors to conduct market research in certain circumstances (when the contract is over $5 million for the procurement of items other than commercial items); whether the subcontract is for commercial or other than commercial items is immaterial to the contractor's requirement to conduct market research. The statute encourages contractors and subcontractors to use commercial items. The FAR is amended to delete the subject of market research from subpart 44.4, and the "Scope of subpart" section, FAR 44.400, is being revised accordingly. The Councils believe that the coverage is better located in FAR part 10 rather than FAR subpart 44.3, as the respondent suggested, because the latter subpart is exclusive to Contractors' Purchasing Systems Reviews.

3. Comment: A respondent stated that FAR 52.244-6 is intended to limit the clauses that a FAR part 15 prime contractor is required to flow down to a subcontractor selling commercial items. The respondent stated its belief that the new Alternate I to the clause is unnecessary. The respondent also concluded that the existing FAR part 10 market research language should not be restated there. Last, the respondent questioned the need for the added language about "procuring commercial items, "when the focus of section 826 is on procurement of "other than commercial items."

Response: The Councils agree that Alternate I to FAR 52.244-6 is unnecessary and not relevant to subcontracts for commercial items. By removing discussion of market research from FAR subpart 44.4, there will no longer be a redundant discussion of FAR part 10 material in FAR subpart 44.4. The Councils agree with the respondent that the focus of section 826 is on the procurement of other than commercial items. Relocating the requirement for contractors to conduct market research to FAR part 10 better aligns the FAR coverage with the statute. The Councils have retained the requirement, at section 826(a) (10 U.S.C. 2377(c)(4)), for a contractor with a contract over $5 million for the procurement of other than commercial items to conduct market research. However, the Councils have added the requirement as a new FAR clause, 52.210-1, Market Research, prescribed at FAR 10.003, Contract clause. Because the statute requires the conduct of market research by a contractor awarded task orders or delivery orders over $5 million for items other than commercial items, we have added a cross-reference to the requirement to FAR subpart 16.5.