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.

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•  Will the government have to buy items to test?

•  What are the unit costs of the potential NDI solutions?

•  Is any parallel development required, such as software development or product improvements?

•  What is the program schedule? When will testing be done? When is contract award expected?

•  Will one or more contracts be used for testing and for procuring production quantities?

Contract Types

Firm-fixed-price or fixed-price contracts with economic price adjustments usually are used for acquiring commercial items-both products and services.These types of contracts may be used in conjunction with award-fee incentives or with delivery or performance incentives when the award fee or incentive is based on factors other than cost. Indefinite-delivery contracts are also permitted as long as prices are based on firm-fixed prices or fixed prices with economic price adjustments.

When it is not possible at the time of award to accurately estimate the extent or duration of the work, or to anticipate costs with a reasonable degree of certainty, a time-and-materials con- tract or labor-hour contract may be used, under certain limited circumstances, to obtain com- mercial services. FAR Subpart 12.207 describes the conditions under which these contracts can be used. Additional limits and requirements are also imposed for DoD awards; the DoD guid- ance is in Subpart 212.2 of the Defense Federal Acquisition Regulation Supplement.

Another important aspect of FAR Part 12 contracts is that contracting officers can tailor the contract terms and conditions, within certain limits, to reflect usual and customary commercial practices.

Pricing

Purchasing a commercial item or NDI does not eliminate the need for the contracting officer to determine that the price is "fair and reasonable." Price analysis, as opposed to cost analysis, is the preferred approach for determining price reasonableness.The information needed to make this determination can be collected through market research.The following are examples of the types of information that are useful:

•  Prices of commercial items sold, or offered for sale, to the public

•  Potential value of any modifications to commercial items

•  Purchase histories, including prices paid for similar items

•  Prices for similar items on Federal schedules

Source:  https://assist.dla.mil  --  Downloaded: 

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