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Subpart 5112.1 – Acquisition of Commercial Items – General

5112.102 Applicability.

(a)(i) This section also applies when evaluating items or services for commerciality that are valued below the $1 million threshold in DFARS 212.102(a)(i).

(A)(i) When evaluating an item or service for commerciality under the FAR 2.101 definition, contracting officers shall ensure the adequacy of market research supporting the positive commercial item determination. Existence of an item or service in a catalog or on a GSA schedule is insufficient rationale by itself. Scrutinize offeror-provided data or information that items are sold, leased, or licensed to the general public. Contracting officers shall not classify items sold to a private company and then resold to the Government as commercial without written approval of the principal assistant responsible for contracting. This condition does not satisfy the determination of being sold to the general public.

(ii) Paragraph (7) of the FAR 2.101 definition of “commercial item” allows consideration of items or services as commercial notwithstanding the fact that the item, combination of items, or service is transferred between or among separate divisions, subsidiaries, or affiliates of a contractor. However, if the end user of the item or service is the Government, then a positive determination of commerciality is generally not appropriate. Contracting officers should require offerors to identify the percentage of items sold in the commercial marketplace (including between or among separate divisions, subsidiaries, or affiliates of a contractor) vice the percentage of items sold to government agencies. The contracting officer should include this data to further support the determination.

(iii) At no time shall the contracting officer make a positive commerciality determination as a means to utilize streamlined procedures. Contracting officers should work in close coordination with the cognizant requiring activity when making the required commerciality determination.

(iv) Contracting officers shall include as part of the contract file full documentation supporting the rationale used as the basis for the commerciality determination.

Subpart 5112.2 – Special Requirements for the Acquisition of Commercial Items

5112.209 Determination of price reasonableness.

Contracting officers shall ensure sufficient market price history exists to support the determination of fair and reasonable price. Catalog or GSA schedule prices alone are insufficient basis for this determination. Contracting officers shall obtain other than certified cost or price data as necessary to establish a fair and reasonable price in accordance with FAR subpart 15.4, Contract Pricing. Where an item or service is considerably more costly than those previously provided to the government, the contracting officer must conduct a thorough cost or price analysis in accordance with FAR and DFARS prescriptions for contract pricing. This analysis must thoroughly document why the higher price is warranted. Contracting officers should also apply a “reasonable person” test to the price increase (i.e., would a reasonable person consider the price increase warranted; does it cost what it should cost if bought by the general public in the commercial market).

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