Commercial Item | The Contracting Education Academy

April 26, 2019 By AMK

What the 809 Panel didn’t quite get right

The Section 809 panel offers an important new idea on how the defense acquisition system could be improved to provide the Pentagon greater access to innovative new technologies that are rapidly developed in the private sector.

But the panel fumbled its recommendations with a contradictory and incoherent legislative approach that would hurt more than it helps. That should not undermine the significance of the panel’s underlying idea: a new focus on the source of funding for commercial items instead of the marketplace in which they are sold. This could encourage companies to develop defense-unique products at their own expense. Today, many are driven away when they are forced to accept regulated pricing and burdensome, government-unique contract terms and conditions.

Successes and Failures

We had high hopes when we helped to write the commercial buying acquisition reforms in the Federal Acquisition Streamlining Act of 1994 and the Clinger-Cohen Act of 1996. These reforms broadened the definition of commercial items, established a commercial item preference, and authorized waivers to government-unique requirements and contract clauses for the purchase of commercial solutions.

As a result, the government went from 476 contracts under simplified commercial item procedures in 1996 to nearly 13 million contracts worth almost $75 billion in 2011. As our colleague Jon Etherton has explained, this enabled the U.S. government to catch up with the information technology revolution that had swept the private sector in the 1990s and likely saved the Department of Defense (DOD) billions of dollars by avoiding unnecessary research and development and the extended acquisition lead times associated with government-unique products.

Keep reading this article at: https://breakingdefense.com/2019/04/what-the-809-panel-didnt-quite-get-right-greenwalt-levine/

March 26, 2019 By cs

Reject Section 809 Panel’s acquisition reforms, federal workers urge Congress

Federal workers told Congress last week that defense acquisition reform proposals billed as cutting red tape for the Pentagon to buy trailblazing commercially available items would “result in large unnecessary costs,” and they are urging lawmakers to reject them.

The opposition by the American Federation of Government Employees, which counts 300,000 Pentagon employees in its ranks, to recommendations from the congressionally mandated Section 809 Panel means lawmakers will have multiple arguments to chew on as they decide which of the panel’s many reform proposals to include in the annual defense policy bill. The Section 809 Panel’s two-year effort yielded a 2,000-page report that was finalized in January.

AFGE’s national president, J. David Cox Sr., argued in a six-page letter to the House and Senate Armed Services committees dated March 15 that the panel’s proposed “dynamic marketplace framework” and other recommendations would line the pockets of defense contractors and only appear as well-reasoned reforms and streamlining of regulations.

“Nothing could be further from the truth,” Cox said in the letter. “This would, while increasing contracting profits, predictably decrease funds that otherwise could have been targeted toward compelling needs such as military readiness, support to our uniformed volunteers and their families, and the replacement of aging war-fighting equipment.”

Cox argued the panel hadn’t made the operational case for the proposal and that buying commercial might thwart the military’s interoperability goals and introduce more cyber vulnerabilities. He said the panel had been made up of former industry and procurement officials who were “biased solely to give expanding procurement opportunities to the private sector” and lacked representation from the “total force management communities.”

Keep reading this article at: https://www.defensenews.com/congress/2019/03/19/reject-defense-reforms-federal-workers-urge-congress

March 12, 2019 By cs

2019 NDAA analysis: Commercial item contracting

The 2019 NDAA contains several provisions reforming commercial item contracting.

As discussed below, these changes include: 1) revision of the definition of commercial items for purposes of federal acquisition statutes; 2) limitations on the applicability to U.S. Department of Defense (DoD) commercial contracts of certain provisions of law; 3) modifications to procurement through commercial e-commerce portals; and 4) review of federal acquisition regulations on commercial products, commercial services, and commercially available off-the-shelf items.

**The “Contracting Cone” shows the full spectrum of available FAR and non-FAR contract strategies.**

Several federal acquisition statutes and regulations exist that impact commercial item contracting. The two most prominent examples are the Federal Acquisition Streamlining Act (FASA) and Part 12 of the Federal Acquisition Regulation (FAR). Before Congress passed FASA in 1994, many contractors did not conduct business with the U.S. government due to demanding terms and conditions and additional costs or risks associated with government specifications. FAR Part 12 establishes a mandatory preference for the U.S. government to purchase products and services available in the commercial marketplace using commercial terms and conditions. From time to time, Congress revises these statutes and regulations in response to shifts in policy considerations and market conditions.

The 2019 NDAA works again to reform commercial item contracting. These revisions are important for government contractors operating in the commercial item contracting space to know.

Keep reading this article at: https://www.jdsupra.com/legalnews/2019-ndaa-analysis-commercial-item-15566/

October 29, 2018 By cs

Federal Circuit charts new terrain in ‘commercial item’ contracting

Last month, the Federal Circuit weighed in on a largely-overlooked provision in the Federal Acquisition Streamlining Act (FASA) that requires federal agencies, to the maximum extent practicable, to procure commercially available goods and services to meet their needs.

In the case — Palantir USG v. United States — the court affirmed the decision by the Court of Federal Claims (COFC) enjoining the Army from proceeding with its Distributed Common Ground System – Army Increment 2 (DCGS-A2) procurement until it complies with the FASA provision.

This bid protest decision has potentially significant implications for commercial item contractors.

DCGS-A2 is not your average solicitation for an IT system. It is phase two of the Army’s flagship system for processing multi-sensor intelligence — a program that the Army has spent nearly two decades and billions of dollars trying to develop. For several years prior to the release of the DCGS-A2 solicitation, Palantir — the protester — informed the Army that the company already had a commercial item that Palantir believed fit the Army’s requirements. Despite Palantir’s communications regarding the capabilities of its product, the Army issued a single-source indefinite-delivery/indefinite-quantity solicitation focused on developing a new intelligence data management system — essentially from scratch. Palantir protested the solicitation and argued that it violated FASA’s mandate regarding the use of commercial items.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2018/10/federal-circuit-charts-new-terrain-commercial-item-contracting/

October 18, 2018 By cs

Efforts to speed procurement of commercial off-the-shelf items influenced by ‘The Amazon Effect’

Amazon looms large over the world’s commerce, drawing a stark contrast to old ways of shopping, and an even starker contrast to the way government agencies buy things. In fact, there’s even a term for it: The Amazon Effect.

So, when Section 846 of 2018 National Defense Authorization Act was enacted, providing for the Pentagon and other federal government agencies to buy directly from e-marketplaces, it was immediately dubbed the “Amazon Bill,” and not just because of the Amazon Effect.

Introduced by Congressman Mac Thornberry, the bill was crafted to help speed the procurement process for commercial off-the-shelf (COTS) products through e-commerce portals. The General Services Administration (GSA), in partnership with the Office of Management and Budget (OMB), is currently working on the strategy and plan to properly implement and execute this legislation.

Based on input from the providers of commercial e-commerce portals and e-procurement solutions, the GSA and OMB team has developed the initial plan (Phase I) and is now working on the market research and industry consultation needed to develop the program’s implementation guidance (Phase II). This is not a simple task, as the team must review and consider existing processes and all the requirements of public procurement — buying off negotiated contracts from vetted suppliers who have invested heavily in meeting government requirements, and giving fair treatment to small, disadvantaged, minority women-owned and veteran-owned companies. The target is to have things completed by 2020.

However, the gap between expectations of selection, ease of use and speed that Amazon has created among consumers, and the reality of what is actually possible in the federal government continues to crop up as we move into the next phase of this process, the proof of concept phase.

Keep reading this article at: https://www.publicspendforum.net/blogs/andrew-malay/2018/10/09/future-federal-government-procurement-ecommerce

The Section 809 panel offers an important new idea on how the defense acquisition system could be improved to provide the Pentagon greater access to innovative new technologies that are rapidly developed in the private sector.

Federal workers told Congress last week that defense acquisition reform proposals billed as cutting red tape for the Pentagon to buy trailblazing commercially available items would “result in large unnecessary costs,” and they are urging lawmakers to reject them.

The 2019 NDAA contains several provisions reforming commercial item contracting.

Last month, the Federal Circuit weighed in on a largely-overlooked provision in the Federal Acquisition Streamlining Act (FASA) that requires federal agencies, to the maximum extent practicable, to procure commercially available goods and services to meet their needs.

Amazon looms large over the world’s commerce, drawing a stark contrast to old ways of shopping, and an even starker contrast to the way government agencies buy things. In fact, there’s even a term for it: The Amazon Effect.

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