B. Commercial Item Acquisitions Provision/Clause Use Procedures.
1. Purpose. To establish the implementing procedures and a common framework to facilitate management, control and use of properly approved Government-unique provisions/clauses in Department of the Navy (DON) solicitations/contracts for commercial items and achieve consistency in DON commercial item provision/clause use and approval authority.
2. Applicability/Scope. The procedures set forth in this document apply to solicitations/contracts for commercial items as defined by FAR 2.101 and reflect the policies and guidance on provision/clause use as prescribed in FAR Part 12, DFARS Part 212, and NMCARS Part 5212. Personnel performing preaward/award functions within Navy/Marine Corps contracting activities and their subordinate organizations will use these procedures, in conjunction with the above prescribed regulations, to determine provision/clause use in solicitations/contracts for commercial items.
3. Background.
a. FAR 12.301(a) implements Section 8002 of Public Law 103-355 (41U.S.C. 264, note), which mandates that contracts for commercial items include, to the maximum extent practicable, only those clauses that are required to implement provisions of law or Executive Orders applicable to the acquisition of commercial items, or that are determined to be consistent with customary commercial practice. FAR 12.301(d) clearly states that despite prescriptions contained elsewhere in the FAR, when acquiring commercial items, Contracting Officers shall be required to use only those provisions/clauses as prescribed in FAR Part 12. It also states that revisions to such provisions/clauses may be made to reflect the applicability of statutes and Executive Orders to the acquisition of commercial items.
b. FAR Subpart 12.3 prescribes a streamlined set of five provisions/clauses that are broad-based and, for the most part, address commercial market practices for a wide range of potential Government acquisitions of commercial items (FAR12.301 (b) and (c)). A few of these clauses may be tailored (i.e., revised) to reflect current commercial practices prevailing at the time the contract requirement is to be publicized/issued. However, any tailoring of a provision or clause to adapt to the current market conditions may only occur after having performed market research (FAR 12.302(a)). Market research is a critical element in the commercial item acquisition process. It not only helps determine an effective acquisition strategy for the commercial item acquisition, but also establishes the basic foundation for the agency description of need, the solicitation, and the contract (FAR 12.202).
c. These procedures implement the Navy/Marine Corps Plan for Restricting Government-Unique Contract Provisions/ Clauses on Commercial Contracts dated July 11, 2008, developed in response to Section 821 of the National Defense Authorization Act (NDAA) for FY 2008 (Pub.L.110-181), and the policy promulgated in NMCARS Change 08-5 on provision/clause use for DON commercial item acquisitions. Section 821 directed the Under Secretary of Defense for Acquisition, Technology, and Logistics to develop/implement a plan to minimize the number of Government-unique contract clauses used in commercial contracts to (1) those government-unique clauses authorized by law or regulation, or (2) any additional clauses that are relevant and necessary to a specific contract. Table 7-1 provides a summary of the unique approval requirements on provision/clause use as prescribed by FAR Subpart 12.3.
4. References/Resources. Table 7-2 lists and describes the documents that serve as references or resource tools in support of these procedures.
5. Definitions. Table 7-3 lists and defines terms used in these procedures.
6. Roles and Responsibilities of Key Stakeholders. Table 7-4 lists key stakeholders and their roles/responsibilities as these relate to the use of properly approved provisions/clauses in solicitations/contracts for commercial items.
7. Procedures. This paragraph outlines the process Contracting Officers will follow to ensure that only properly authorized provisions/clauses are used in commercial item acquisitions. The Provision/Clause Use Decision Tree for Commercial Item Acquisitions (hereinafter referred to as "decision tree"), available at the end of this section, illustrates the critical steps involved determining the appropriate provisions/clauses to be used for a specific commercial item acquisition. The Contracting Officer should use the decision tree, in conjunction with these procedures, to fully understand all required decisions. Contracting Officers perform the following actions:
a. Determine whether the acquisition is excluded from use of commercial item procedures per FAR 12.102; if it is not excluded, continue as outlined below.
b. Determine whether the acquisition meets the definition of a commercial item per FAR 2.101. For acquisitions exceeding $1M, as required by DFARS 212.102 and as outlined in PGI 212.102(a), this determination is documented in writing and supported by market research demonstrating the rationale supporting a conclusion that the commercial item definition has been satisfied. If an acquisition plan/strategy is developed, it should include the information addressed in the commercial item determination. Market research must be performed in accordance with FAR 10.002. FAR 10.002(e) requires the results of market research to be documented in a manner appropriate to the size and complexity of the acquisition. The DoD Commercial Item Handbook of November 2001 available at http://www.acq.osd.mil/dpap/Docs/cihandbook.pdf provides guidance on how to perform and document market research efforts.
c. Develop the solicitation/contract identifying the appropriate provisions/clauses to be used for the specific commercial item acquisition.
(1) Use the DON Matrix of FAR/DFARS and Other Government-Unique Provisions/Clauses for Commercial Item Acquisitions (hereinafter referred to as "the DON matrix") available at NMCARS Subpart 5252.3. The DON matrix, developed to assist the Contracting Officer in determining the appropriate FAR/DFARS and other government-unique provisions/clauses to be used in commercial item acquisitions, is only a reference tool; and, by itself, does not provide sufficient information to determine the applicability of a provision or clause. The Contracting Officer shall refer to the appropriate prescriptions in FAR/DFARS/NMCARS on provision/clause use in solicitations/contracts for commercial item acquisitions to ensure that only properly authorized provisions/clauses are included in solicitations/contracts for commercial items.
(a) The DON matrix consists of two lists of provisions/clauses: One for solicitations/contracts issued in the Standard Procurement System (SPS) using two DPAP deviations; the other when the two DPAP deviations will not be used or if the solicitations/contracts will not be issued in SPS. Each list contains:
(i) FAR and DFARS provisions/clauses authorized by FAR Part 12 and DFARS Part 212 for use in commercial item acquisitions;
(ii) Other FAR provisions/clauses identified for use under the authority of FAR 12.301(e), Discretionary Use of FAR Clauses, that may be used when applicable to the specific commercial item acquisition;
(iii) Additional provisions/clauses authorized by ASN(RD&A) or DPAP for use when applicable to the specific commercial item acquisition; and
(iv) A link to the Central Command (CENTCOM) Contracting Webpage containing additional provisions/clauses and terms/conditions applicable to DoD Theater Business Clearance (TBC) covered actions awarded in support of the Joint Contracting Command Iraq/Afghanistan (JCC I/A).
(b) The main difference between the two lists concerns current DPAP deviations to omnibus clauses FAR 52.212-5 and DFARS 252.212-7001. The "deviation" list should only be referred to when issuing the solicitation/contract in SPS and using the DPAP class deviations to omnibus clauses FAR 52.212-5 and DFARS 252.212-7001. Each of these omnibus clauses contains a number of clauses the Contracting Officer may select as appropriate for the specific commercial item acquisition. These class deviations authorize the clauses included in FAR 52.212-5 and DFARS 252.212-7001 to be listed individually, rather than to be manually marked as applicable within each omnibus clause. Therefore, the "deviation" list individually depicts all clauses that would otherwise be included in each omnibus FAR/DFARS clause.
(2) All provisions/clauses listed in the DON matrix are identified by an "R" or "A". "R" means "required" and the provision/clause must be used in all commercial item acquisitions. "A" means "as applicable" and the Contracting Officer must determine applicability of the provision/clause to the specific commercial item acquisition.
(3) The link to the CENTCOM Contracting Webpage contains additional provisions/clauses and terms/conditions applicable to solicitations/contracts for commercial items in which performance or delivery is in the CENTCOM area of responsibility. Contracting Officers must ensure that solicitations/contracts for commercial item acquisitions supporting the Commander, JCC I/A also include the appropriate provisions/clauses and/or terms/conditions identified in the CENTCOM Contracting Webpage, which is available at http://www2.centcom.mil/_layouts/AccessAgreement.aspx or through DPAP's Contingency Contracting webpage under "Special Instructions for Iraq and Afghanistan" at http://www.acq.osd.mil/dpap/pacc/cc/index.html. Contracts covered by the TBC policy include (i) those under which contractor personnel are performing in IRAQ and/or Afghanistan after April 1, 2008; (ii) that require the delivery of material to Iraq and/or Afghanistan after April 1, 2008 under FOB Destination terms using commercial transportation outside the Defense Transportation System; or (iii) that authorize contractor personnel, including subcontractors, to carry weapons in Iraq and/or Afghanistan regardless of contract end date. See DoD memorandum of September 15, 2009, Subject: Theater Business Clearance/Contract Administration Delegation (TBC/CAD) Compliance, available at http://www.acq.osd.mil/dpap/policy/policyvault/USA003927-09-DPAP.pdf .
(4) Other Government-Unique Provisions/Clauses. Component-unique provisions/clauses (i.e. which are developed by DON contracting activities) must be approved by the NSPE before use in solicitations/contracts for commercial item acquisitions. All approved component-unique provisions/clauses will be listed in the DON matrix located in NMCARS Subpart 5252.3.
d. Review the additional actions authorized by FAR Part 12 that impact the use of commercial item provisions/clauses, after selecting the necessary provisions/clauses. These additional actions are outlined in paragraph 7.e. below and illustrated in the decision tree at the end of this section. The decision tree:
(1) Addresses the actions of "tailoring" or "adding new" instructions, terms and conditions, or provisions/clauses. For these actions, the Contracting Officer must determine whether that action is consistent with commercial practices. This determination may be based on the results of initial market research conducted when developing the solicitation/contract; or, if not addressed at that time, from additional market research performed to support the determination.
(2) Identifies all supporting actions necessary for each decision listed. Supporting actions include documenting decisions made, obtaining legal sufficiency reviews, and obtaining approvals. It is not the intent for the Contracting Officer to prepare individual documents supporting each decision, but to combine actions with the same approval authorities into a single document, when appropriate.
e. Consider the following additional actions authorized by FAR Part 12, when appropriate. Note: The approval authorities for these actions are summarized in Table 7-1 and illustrated in the decision tree.
(1) Tailoring of FAR 52.212-1. This provision includes instructions to potential offerors submitting proposals on the specific commercial item acquisition. FAR 12.301(b)(1) allows tailoring of these instructions or the addition of new instructions, if necessary. However, as required by FAR 12.302(a), changes to these instructions can only be made to reflect market conditions (i.e., consistent with commercial practices).
(2) Use of FAR 52.212-2 or Similar Provision. This provision allows the Contracting Officer to fill in the evaluation factors specific to the commercial item acquisition. The provision also includes language identifying the basis under which contract award will be made. The Contracting Officer must determine whether the basis of award language is applicable to the specific commercial item acquisition. If not, as authorized by FAR 12.301(c)(2), a provision similar to FAR 52.212-2 may be drafted containing all evaluation factors required by FAR 13.106, Subpart 14.2, or Subpart 15.3.
(3) Deviation to FAR 52.212-3. This provision provides a single, consolidated list of representations and certifications for the acquisition of commercial items and is required to be attached to any commercial item solicitation for offerors to complete. This provision and its alternates cannot be modified in any manner, except in accordance with FAR deviation procedures outlined in FAR Subpart 1.4. Adjust acquisition execution milestones to reflect the timeframe necessary to process the deviation.
(4) Discretionary use authority of FAR 12.301(e). Use of other FAR provisions/clauses beyond the ones already included in the DON Matrix available at NMCARS 5252.3 shall be limited to the following:
(a) Discretionary use of additional FAR provisions/clauses is limited to only those FAR provisions/clauses necessary for the performance of the contract due to the nature of the specific commercial item acquisition (e.g., using required option provisions/clauses when the acquisition has options, using required leasing provisions/clauses when the acquisition is for leasing, etc.).
(b) If an acquisition requires use of an additional FAR provision/clause that is not listed on the DON matrix, and is only for one-time use, then the DON matrix does not require updating to reflect this additional clause. However, if the particular acquisition will be recurring in nature prompting the need for this additional FAR provision/clause, the DON matrix must be updated. Submit the FAR provision/clause to DASN (in accordance with contracting activity procedures) for inclusion in the DON matrix.
(c) Component provisions/clauses may not be added to a solicitation/contract for commercial items using this authority.
(5) Tailoring of FAR 52.212-4. FAR 12.301(b)(3) allows the tailoring of this clause; however, certain limitations apply.
(a) As outlined in FAR 12.302(b), the following six terms/conditions of FAR 52.212-4 cannot be tailored:
Paragraph (b) - Assignments;
Paragraph (d) - Disputes;
Paragraph (g) - Payment; (except as provided in Subpart 32.11)
Paragraph (i) - Invoice;
Paragraph (q) - Other compliances; and
Paragraph (r) - Compliance with laws unique to Government contracts.
(b) Tailoring of the other fourteen existing terms/conditions consistent with commercial practices may be approved by the Contracting Officer. However, tailoring of these existing terms/conditions inconsistent with commercial practices requires a waiver and a different level of approval, as outlined in the approval matrix of Table 7-1 and illustrated by the decision tree.
(c) The procedures for adding new terms and conditions to FAR 52.212-4 are outlined in the decision tree. Documentation must be submitted to ASN(RD&A) for approval via the contracting activity chain of command. Approved additional terms and conditions that are to be used on a recurring basis will be included in the DASN commercial item provision/clause repository.
(6) Development/use of component-unique provisions/clauses required to reflect agency statutes pursuant to FAR 12.301(f) authority.
(a) FAR 12.301(f) authorizes the use of additional provisions/clauses necessary to reflect agency unique statues applicable to commercial item acquisitions. If a new provision/clause is required under this authority, the contracting activity/DASN will jointly develop one. DASN (A&LM) approved component-unique provisions/clauses meeting this criterion will be included in the DON Matrix at NMCARS Subpart 5252.3, PROVISION AND CLAUSE MATRIX.
(b) The contracting activity/DASN shall assess/determine if the provision/clause meets the conditions at DFARS 201.304(1)(i) requiring DPAP approval (i.e., has a significant effect beyond the internal operating procedures of DON, or has a significant cost or administrative impact on contractors or offerors) and document the results.
(c) The provision/clause package (i.e., the draft provision/clause, written results of the assessment, and justification for use) shall be submitted to Counsel for legal sufficiency review.
(d) The provision/clause package shall be sent for approval as outlined in Table 7-1 of this Annex. Without approval, a new provision or clause is not authorized for use.
(7) Development/use of additional component provisions/clauses other than those necessary to reflect agency statutes pursuant to FAR 12.301(f) authority.
(a) FAR 12.301(f) states that agencies may supplement FAR Part 12 provisions/clauses with the use of additional provisions/clauses other than those necessary to reflect agency unique statutes applicable to commercial item acquisitions. Only the NSPE may approve the use of any component-unique provision or clause pursuant to this authority, unless the proposed provision or clause meets the conditions at DFARS 201.304(1)(i) for DPAP approval.
(b) If a supplemental provision/clause is deemed necessary, the contracting activity shall assess/determine if it meets the conditions at DFARS 201.304(1)(i) (i.e., has a significant effect beyond the internal operating procedures of an agency, or has a significant cost or administrative impact on contractors or offerors) and document the results.
(c) The provision/clause package (i.e., the draft provision/clause, written results of the assessment, and justification for use) shall be submitted to Counsel for legal sufficiency review.
(d) The provision/clause package shall be sent for approval as outlined this Annex and in accordance with Table 7-1. Without approval, a new component provision/clause is not authorized for use.
8. Management/Oversight of Clause/Provision Use in Commercial Item Contracts.
a. The overarching responsibility of managing/controlling the use of component solicitation/contract provisions and clauses within DON resides with DASN(AP). DFARS 201.304(4) requires that agencies develop, and upon approval by DPAP, implement, maintain and comply with a plan for controlling clauses used in its contracts beyond than those prescribed by FAR/DFARS. The updated DON Control Plan for Component Clauses identifies a system of controls for the use of component-unique provisions/clauses in solicitations/contracts for commercial items (and non-commercial items) and conforms to prescribed FAR, DFARS, and NMCARS regulations. Each HCA serves a vital role in implementing/facilitating compliance with this Plan.
b. To ensure compliance with prescribed policies/procedures in the area of clause control, each HCA will include provision/clause use in solicitations/contracts for commercial item acquisitions as an element for review during its internal procurement management reviews/procurement performance management assessment program (PPMAP) assessments. DASN(AP) PPMAP will assess/validate compliance with this requirement during its PPMAP of HCAs.