DoD Amends DFARS to Require Documentation of Commerciality Determinations

Congress has stated a statutory preference that the DoD acquire commercial items to satisfy its needs. To further this preference, FAR Part 10 requires all agencies to conduct market research to determine if commercial items are available to satisfy the agency’s needs before issuing a solicitation for a contract expected to exceed the simplified acquisition threshold. FAR 10.002(e) states that agencies “should” document the results of this market research.

On January 24, 2008, DoD published a final rule in the Federal Register, effective immediately, amending the DFARS to require that contracting officers document all determinations regarding how the item meets the definition of a commercial item in FAR 2.101 when conducting a procurement under FAR Part 12 and the value of the contract is expected to exceed $1 million.

Although DoD anticipated that this rule change would not have a significant impact on small businesses, it can actually have a severe impact on all businesses. For instance, it is well documented that DoD is understaffed regarding the agency's number of contracting officers. If contracting officers are required to prepare another memorandum or document for the contract file, this can be a deterrent for them to use a procedure with which they already have little familiarity and comfort. Accordingly, this requirement may complicate contractors’ efforts to have items treated as commercial items and procurements conducted under FAR Part 12.