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'

·�

•  Prices based on catalogs or price lists.

The IPT also can use market research to determine whether the published prices were actu- ally paid by other commercial customers, or whether the usual commercial practice in the mar- ket is to discount published prices.

Pricing in the commercial marketplace is often determined by market leverage. Depending on market conditions, buyers or sellers may exert greater leverage over pricing. Large commer- cial customers can exert significant price leverage on their suppliers. DoD may not be a signifi- cant customer to some commercial suppliers. DoD should try to become an attractive customer to its commercial suppliers by purchasing economic quantities where possible and being flexible with respect to terms and conditions.

If it cannot determine the price reasonableness of a commercial item, the IPT may ask the commercial supplier for supporting cost information. However, for commercial item acquisi- tions under FAR Part 12, the cost accounting standards are not applicable to contractors. Con- tracting officers may request only the minimum amount of cost data to determine price reasonableness, and the contractor does not have to certify the data.

Best-Value Source Selection

Best-value source selection involves evaluating and comparing factors in addition to price when making the contract award decision.This approach is similar to that used by individual con- sumers when making a purchase. A consumer is willing to pay more for a product with features offering more value for the money.

The best-value approach is an especially powerful tool in commercial item acquisitions. Commercial vendors develop products that include many different features intended to differ- entiate their products from their competitors' products.Thus, the IPT can select the product that optimizes performance and life-cycle cost factors. Moreover, the item usually has a quality history, and the supplier has a support record associated with that item.

Because the best-value approach can be complicated when numerous variations of a product exist in the commercial market, the IPT needs a complete understanding of the requirement and the relative importance of its discriminating characteristics.The team should then translate the requirement into evaluation criteria.The criteria should be qualitative discriminators that will reveal substantive differences among competing products. In addition, the IPT should es- tablish evaluation criteria addressing the government's objectives, the marketplace, and the risks; again, these criteria should enable the IPT to discriminate among items.Together, the evalua- tion criteria must provide the basis for justifying the item's selection.

In the solicitation, the IPT must clearly communicate the requirement and the general method, including criteria, that DoD will use to evaluate candidate products or services. Once