Government Contracts Rule Would Revise FAR Definition of “Commercial Item”
Monday, November 9, 2020

Rule Would Revise FAR Definition of “Commercial Item”

By Government Contracts Editorial Staff

A proposed rule would amend the Federal Acquisition Regulation to implement a section of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (PL 115-232) changing the definition of “commercial item.” Section 836 of the FY 2019 NDAA separates the 41 USC 103 definition of “commercial item” into definitions of “commercial product” and “commercial service.” The new definitions carry out a recommendation of the Section 809 Panel (see PL 114-92) to better “reflect the significant roles services and commercial services play today in the [Department of Defense] procurement budget.”

509 Panel Recommendation. The Panel noted the “acquisition workforce has faced issues with inconsistent interpretations of policy [and] confusion over how to identify eligible commercial products and services.” The panel found splitting the definition of “commercial item” into “commercial product” and “commercial service” provides clarity for the acquisition workforce, which may result in greater engagement with the commercial marketplace. The definitional changes do not expand or shrink the universe of products or services that the government may procure under FAR Part 12 or change the terms and conditions with which vendors must comply. The rule would amend FAR 2.101, Definitions, and make conforming changes to numerous other FAR sections. Comments on the proposed rule referencing FAR Case 2018-018 are due December 14, 2020. The text of the rule appears at ¶70,006.361.

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