National Defense: FAR Council Replaces Commercial Item Definition

“On Nov. 4, the Federal Acquisition Regulatory Council issued a final rule revising the federal acquisition definition of ‘commercial item,’ a move which should aid contractors.

The rule effectively splits the prior definition of ‘commercial item’ into separate definitions for ‘commercial product’ and ‘commercial service’ without making substantive changes to the existing definitions. It also replaces references to ‘commercial items’ throughout the Federal Acquisition Regulation with corresponding references to ‘commercial products,’ ‘commercial services,’ or both, as appropriate…”

“While the final rule cautions that the change neither expands the universe of products and services to which the definition applies nor changes the manner in which the federal government procures products and services, the practical effect is that acquisition professionals should reach more consistent determinations regarding commerciality, thus allowing the government to better leverage the flexibilities afforded for such procurements and economic advantages of commercially available offerings. This is good news for entities providing commercial products and services, including those “of a type” offered in the commercial marketplace…”

“Additionally, the final rule does not adopt a uniform definition of ‘subcontract’ or ‘subcontractor,’ leaving in place dozens of varying definitions for the terms as well as widespread confusion and burden in determining whether and how to comply with the regulatory requirements that may apply to commercial subcontracts.

A separate rulemaking likely is forthcoming to address the numerous definitions of ‘subcontract’ and ‘subcontractor,’ according to the FAR Council’s latest regulatory agenda…” Read the full article here.

Source: FAR Council Replaces Commercial Item Definition – By Brooke Stanley and Scott Freling, January 4, 2022. National Defense.

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