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08/03/2023
Webinar recap: Improve your bottom line with commercial item determinations
During CohnReznick’s June 15, 2023, Government Contracting Lunch & Learn Webinar Series, we met with Jonathan Fox, Contracting Officer, Defense Contract Management Agency (DCMA), and Keith Feigenbaum, Senior Associate, Arnold & Porter, to discuss the latest in commercial determinations for GovCons.
You can access the full presentation here.
Authoritative guidance sources
Keith shared some great resources to guide us in understanding the move towards more commercial buys and the history behind it. If you need to put your research hat on to dig into any issues, here are some great references to guide your exploration:
- 10 U.S.C. Section 3453 (formerly 2377) requires Defense agencies to procure commercial or non-developmental products and services “to the maximum extent practicable.”
- Section 836 of the John S. McCain National Defense Authorization Act (NDAA) for fiscal year (FY) 2019 (Pub. L. 115–232) separates the definition of ‘‘commercial item’’ at 41 U.S.C. 103 into the definitions of ‘‘commercial product’’ and ‘‘commercial service,’’ at 41 U.S.C. 103 and 103a.
- According to the NDAA, splitting the definition of ‘‘commercial item’’ into the definitions of ‘‘commercial product’’ and ‘‘commercial service’’ was a recommendation made by the independent panel created by Section 809 of the NDAA for FY 2016 (Pub. L. 114–92).
- Commercial product definition FAR 2.101
Best practices
Jonathan shared some best practices to support positive commercial determinations and advocated for proactive communication between the buying commands, prime contractors, subcontractors, and the DCMA Commercial Item Group (CIG). He additionally provided four key elements that must be present to support commerciality:
- Describe the salient characteristics of the proposed product or service
- Compare the proposed product or service with those found in the commercial marketplace
- Demonstrate that the commercial comparison product or service is used by the general public
- Verify whether all elements of the applicable commercial definition are covered in the steps above and provide evidence to substantiate any missing pieces
Kristen Soles
CPA, Partner - Managing Partner, Advisory - Global Consulting Solutions and Government Contracting Industry Leader
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This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.