SD-2 Dod Acquisitions Buying Commercial Items And Nondevelopmental ItemsThis document offers guidance on acquisitions involving all types of commercial and nondevelopmental items: systems, subsystems, assemblies, parts, and items of supply. Commercial services are also addressed.This document does not present a “cookbook” approach to the acquisition of commercial and nondevelopmental items; such an approach could not accommodate the vast array of potential applications. It does offer lessons learned and things to consider when participating on an integrated product team.

Pages 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 - 11 - 12 - 13 - 14 - 15 - 16 - 17 - 18 - 19 - 20 - 21 - 22 - 23 - 24 - 25 - 26 - 27 - 28 - 29 - 30 - 31 - 32 - 33 - 34 - 35 - 36 - 37 - 38 - 39 - 40 - 41 - 42 - 43 - 44 - 45 - 46 - 47 - 48 - 49 - 50 - 51 - 52 - 53 - 54 - 55 - 56 - 57 - 58 - 59 - 60 - 61 - 62 - 63 - 64

I                                                ,                                   -                            J'

·�

prime could then issue subcontracts for commercial products or services using special subcon- tracting rules (see FAR Subpart 44.4 and Subpart 244.4 of the Defense Federal Acquisition Regulation Supplement) that allow the use of FAR Part 12 procedures.The prime contractor is responsible for determining whether the subcontracted product or service is considered com- mercial in accordance with the FAR.

Another method used by DoD to acquire a major system is to contract directly with the suppliers of the various subsystems and components, making commercial item determinations in each case and writing individual contracts accordingly. In addition, DoD typically awards a separate contract for a system integrator to build the system from all of the subsystems and components.The administrative costs for this acquisition method are higher than for other methods, but awarding and administering multiple contracts affords maximum flexibility to DoD when negotiating terms with the individual contractors.This method also may allow DoD to acquire commercial subsystems and components that may not otherwise have been available through a prime contractor-subcontractor team.

Budgets

The Program Objective Memorandum and budget process for acquiring commercial and nondevelopmental items is the same as for any other DoD acquisition. However, the acquisition of commercial items and NDIs may require more cautious management of the process. For ex- ample, because an NDI acquisition is faster than development of an equivalent materiel item, there is less time to program funds.

The problem of less time to program funds is addressed through reprogramming actions or out-of-cycle new start program justifications.The question of the amount and type of funds needed is more problematic. Research, development, test, and evaluation funds are normally used for market research and purchase of items needed for test and evaluation.They are also used for modification of existing items. Procurement, operations, and maintenance funds are normally used for production and deployment. However, procurement funds can be used for nonrecurring engineering, like that involved in the integration of commercial items or NDIs into a system.

The following questions must be answered when budgeting for a program:

•  Is a commercial item solution feasible?

•  If not, is an NDI solution feasible?

•  What testing is necessary to determine if a commercial or NDI solution is feasible?

•  If a commercial or NDI solution is feasible, what testing is necessary to determine which of the potential items meet the operational requirement?