[USC02] 10 USC Ch. 140: PROCUREMENT OF COMMERCIAL ITEMS
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10 USC Ch. 140: PROCUREMENT OF COMMERCIAL ITEMS
From Title 10—ARMED FORCESSubtitle A—General Military LawPART IV—SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 140—PROCUREMENT OF COMMERCIAL ITEMS

Sec.
2375.
Relationship of commercial item provisions to other provisions of law.
2376.
Definitions.
2377.
Preference for acquisition of commercial items.
[2378.
Repealed.]
2379.
Requirement for determination by Secretary of Defense and notification to Congress before procurement of major weapon systems as commercial items.
2380.
Commercial item determinations by Department of Defense.
2380a.1
Treatment of certain items as commercial items.

        

2380B.1
Treatment of items purchased prior to release of prime contract requests for proposals as commercial items.2

        

Amendment of Analysis

Pub. L. 115–232, div. A, title VIII, §836(d)(8)(A), (H), (h), Aug. 13, 2018, 132 Stat. 1868, 1869, 1874, provided that, effective Jan. 1, 2020, subject to a savings provision, the chapter heading is amended to read "PROCUREMENT OF COMMERCIAL PRODUCTS AND COMMERCIAL SERVICES", and the items in the analysis are amended to read as follows: 2375 "Relationship of other provisions of law to procurement of commercial products and commercial services", 2376 "Definitions", 2377 "Preference for commercial products and commercial services", 2379 "Procurement of a major weapon system as a commercial product: requirement for prior determination by Secretary of Defense and notification to Congress", 2380 "Commercial product and commercial service determinations by Department of Defense", 2380a "Treatment of certain products and services as commercial products and commercial services", and 2380b "Treatment of commingled items purchased by contractors as commercial products". See 2018 Amendment note below.

Amendments

2018Pub. L. 115–232, div. A, title VIII, §836(d)(8)(A), (H), Aug. 13, 2018, 132 Stat. 1868, 1869, substituted "PROCUREMENT OF COMMERCIAL PRODUCTS AND COMMERCIAL SERVICES" for "PROCUREMENT OF COMMERCIAL ITEMS" in chapter heading, and amended analysis generally, substituting items 2375 to 2380b for former items 2375 "Relationship of commercial item provisions to other provisions of law", 2376 "Definitions", 2377 "Preference for acquisition of commercial items", 2379 "Requirement for determination by Secretary of Defense and notification to Congress before procurement of major weapon systems as commercial items", 2380 "Commercial item determinations by Department of Defense", 2380a "Treatment of certain items as commercial items", and 2380B "Treatment of items purchased prior to release of prime contract requests for proposals as commercial items".

2016Pub. L. 114–328, div. A, title VIII, §§833(b)(3)(B), 877(b), 878(b)(2), Dec. 23, 2016, 130 Stat. 2284, 2312, added items 2380a and 2380B and struck out items 2378 "Procurement of copier paper containing specified percentages of post-consumer recycled content" and 2380A "Treatment of goods and services provided by nontraditional defense contractors as commercial items".

2015Pub. L. 114–92, div. A, title VIII, §§851(a)(2), 857(b), Nov. 25, 2015, 129 Stat. 916, 921, added items 2380 and 2380A.

2006Pub. L. 109–163, div. A, title VIII, §803(a)(2), Jan. 6, 2006, 119 Stat. 3371, added item 2379.

1997Pub. L. 105–85, div. A, title III, §350(b), Nov. 18, 1997, 111 Stat. 1692, added item 2378.

1 So in original.

2 So in original. Does not conform to section catchline.

§2375. Relationship of commercial item provisions to other provisions of law

(a) Applicability of Government-wide Statutes.—(1) No contract for the procurement of a commercial item entered into by the head of an agency shall be subject to any law properly listed in the Federal Acquisition Regulation pursuant to section 1906(b) of title 41.

(2) No subcontract under a contract for the procurement of a commercial item entered into by the head of an agency shall be subject to any law properly listed in the Federal Acquisition Regulation pursuant to section 1906(c) of title 41.

(3) No contract for the procurement of a commercially available off-the-shelf item entered into by the head of an agency shall be subject to any law properly listed in the Federal Acquisition Regulation pursuant to section 1907 of title 41.

(b) Applicability of Defense-unique Statutes to Contracts for Commercial Items.—(1) The Defense Federal Acquisition Regulation Supplement shall include a list of defense-unique provisions of law and of contract clause requirements based on government-wide acquisition regulations, policies, or executive orders not expressly authorized in law that are inapplicable to contracts for the procurement of commercial items. A provision of law or contract clause requirement properly included on the list pursuant to paragraph (2) does not apply to purchases of commercial items by the Department of Defense. This section does not render a provision of law or contract clause requirement not included on the list inapplicable to contracts for the procurement of commercial items.

(2) A provision of law or contract clause requirement described in subsection (e) that is enacted after October 13, 1994, shall be included on the list of inapplicable provisions of law and contract clause requirements required by paragraph (1) unless the Under Secretary of Defense for Acquisition, Technology, and Logistics makes a written determination that it would not be in the best interest of the Department of Defense to exempt contracts for the procurement of commercial items from the applicability of the provision or contract clause requirement.

(c) Applicability of Defense-unique Statutes to Subcontracts for Commercial Items.—(1) The Defense Federal Acquisition Regulation Supplement shall include a list of provisions of law and of contract clause requirements based on government-wide acquisition regulations, policies, or executive orders not expressly authorized in law that are inapplicable to subcontracts under a Department of Defense contract or subcontract for the procurement of commercial items. A provision of law or contract clause requirement properly included on the list pursuant to paragraph (2) does not apply to those subcontracts. This section does not render a provision of law or contract clause requirement not included on the list inapplicable to subcontracts under a contract for the procurement of commercial items.

(2) A provision of law or contract clause requirement described in subsection (e) shall be included on the list of inapplicable provisions of law and contract clause requirements required by paragraph (1) unless the Under Secretary of Defense for Acquisition, Technology, and Logistics makes a written determination that it would not be in the best interest of the Department of Defense to exempt subcontracts under a contract for the procurement of commercial items from the applicability of the provision or contract clause requirement.

(3) In this subsection, the term "subcontract" includes a transfer of commercial items between divisions, subsidiaries, or affiliates of a contractor or subcontractor. The term does not include agreements entered into by a contractor for the supply of commodities that are intended for use in the performance of multiple contracts with the Department of Defense and other parties and are not identifiable to any particular contract.

(4) This subsection does not authorize the waiver of the applicability of any provision of law or contract clause requirement with respect to any first-tier subcontract under a contract with a prime contractor reselling or distributing commercial items of another contractor without adding value.

(d) Applicability of Defense-unique Statutes to Contracts for Commercially Available, Off-the-shelf Items.—(1) The Defense Federal Acquisition Regulation Supplement shall include a list of provisions of law and of contract clause requirements based on government-wide acquisition regulations, policies, or executive orders not expressly authorized in law that are inapplicable to contracts for the procurement of commercially available off-the-shelf items. A provision of law or contract clause requirement properly included on the list pursuant to paragraph (2) does not apply to Department of Defense contracts for the procurement of commercially available off-the-shelf items. This section does not render a provision of law or contract clause requirement not included on the list inapplicable to contracts for the procurement of commercially available off-the-shelf items.

(2) A provision of law or contract clause requirement described in subsection (e) shall be included on the list of inapplicable provisions of law and contract clause requirements required by paragraph (1) unless the Under Secretary of Defense for Acquisition, Technology, and Logistics makes a written determination that it would not be in the best interest of the Department of Defense to exempt contracts for the procurement of commercially available off-the-shelf items from the applicability of the provision or contract clause requirement.

(e) Covered Provision of Law or Contract Clause Requirement.—A provision of law or contract clause requirement referred to in subsections (b)(2), (c)(2), and (d)(2) is a provision of law or contract clause requirement that the Under Secretary of Defense for Acquisition, Technology, and Logistics determines sets forth policies, procedures, requirements, or restrictions for the procurement of property or services by the Federal Government, except for a provision of law or contract clause requirement that—

(1) provides for criminal or civil penalties;

(2) requires that certain articles be bought from American sources pursuant to section 2533a of this title, or requires that strategic materials critical to national security be bought from American sources pursuant to section 2533b of this title; or

(3) specifically refers to this section and provides that, notwithstanding this section, it shall be applicable to contracts for the procurement of commercial items.

(Added Pub. L. 103–355, title VIII, §8102, Oct. 13, 1994, 108 Stat. 3390; amended Pub. L. 105–85, div. A, title X, §1073(a)(51), Nov. 18, 1997, 111 Stat. 1903; Pub. L. 107–107, div. A, title X, §1048(a)(18), Dec. 28, 2001, 115 Stat. 1223; Pub. L. 111–350, §5(b)(21), Jan. 4, 2011, 124 Stat. 3844; Pub. L. 114–328, div. A, title VIII, §874(a), Dec. 23, 2016, 130 Stat. 2308; Pub. L. 115–232, div. A, title VIII, §§836(d)(1), (8)(B), 837(a), Aug. 13, 2018, 132 Stat. 1866, 1868, 1875.)

Amendment of Section

Pub. L. 115–232, div. A, title VIII, §836(d)(1), (8)(B), (h), Aug. 13, 2018, 132 Stat. 1866, 1868, 1874, provided that, effective Jan. 1, 2020, subject to a savings provision, this section is amended as follows:

(1) by amending section catchline to read "Relationship of other provisions of law to procurement of commercial products and commercial services";

(2) in subsection (a)(1), (2), by striking "commercial item" and inserting "commercial product or commercial service";

(3) in subsections (b) and (c)—

(A) in heading, by striking "Commercial Items" and inserting "Commercial Products and Commercial Services"; and

(B) by striking "commercial items" each place it appears and inserting "commercial products and commercial services"; and

(4) in subsection (e)(3), by striking "commercial items" and inserting "commercial products and commercial services".

Amendments

2018Pub. L. 115–232, §836(d)(8)(B), substituted "Relationship of other provisions of law to procurement of commercial products and commercial services" for "Relationship of commercial item provisions to other provisions of law" in section catchline.

Subsec. (a)(1), (2). Pub. L. 115–232, §836(d)(1)(A), substituted "commercial product or commercial service" for "commercial item".

Subsec. (b). Pub. L. 115–232, §836(d)(1)(B), in heading, substituted "Commercial Products and Commercial Services" for "Commercial Items" and, in text, substituted "commercial products and commercial services" for "commercial items" wherever appearing.

Subsec. (b)(2). Pub. L. 115–232, §837(a), substituted "October 13, 1994" for "January 1, 2015".

Subsec. (c). Pub. L. 115–232, §836(d)(1)(B), in heading, substituted "Commercial Products and Commercial Services" for "Commercial Items" and, in text, substituted "commercial products and commercial services" for "commercial items" wherever appearing.

Subsec. (e)(3). Pub. L. 115–232, §836(d)(1)(C), substituted "commercial products and commercial services" for "commercial items".

2016Pub. L. 114–328 amended section generally. Prior to amendment, text read as follows:

"(a) Applicability of Title.—Unless otherwise specifically provided, nothing in this chapter shall be construed as providing that any other provision of this title relating to procurement is inapplicable to the procurement of commercial items.

"(b) List of Laws Inapplicable to Contracts for the Acquisition of Commercial Items.—No contract for the procurement of a commercial item entered into by the head of an agency shall be subject to any law properly listed in the Federal Acquisition Regulation (pursuant to section 1906 of title 41).

"(c) Cross Reference to Exception to Cost or Pricing Data Requirements for Commercial Items.—For a provision relating to an exception for requirements for cost or pricing data for contracts for the procurement of commercial items, see section 2306a(b) of this title."

2011—Subsec. (b). Pub. L. 111–350 substituted "section 1906 of title 41" for "section 34 of the Office of Federal Procurement Policy Act (41 U.S.C. 430)".

2001—Subsec. (b). Pub. L. 107–107 inserted "(41 U.S.C. 430)" after "section 34 of the Office of Federal Procurement Policy Act".

1997—Subsec. (c). Pub. L. 105–85 substituted "a provision relating to an exception" for "provisions relating to exceptions" and "section 2306a(b)" for "section 2306a(d)".

Effective Date of 2018 Amendment

Amendment by section 836(d)(1), (8)(B) of Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

Effective Date

For effective date and applicability of chapter, see section 10001 of Pub. L. 103–355 set out as an Effective Date of 1994 Amendment note under section 2302 of this title.

Changes to Defense Federal Acquisition Regulation Supplement

Pub. L. 114–328, div. A, title VIII, §874(b), Dec. 23, 2016, 130 Stat. 2310, provided that:

"(1) In general.—To the maximum extent practicable, the Under Secretary of Defense for Acquisition, Technology, and Logistics shall ensure that—

"(A) the Defense Federal Acquisition Regulation Supplement does not require the inclusion of contract clauses in contracts for the procurement of commercial items or contracts for the procurement of commercially available off-the-shelf items, unless such clauses are—

"(i) required to implement provisions of law or executive orders applicable to such contracts; or

"(ii) determined to be consistent with standard commercial practice; and

"(B) the flow-down of contract clauses to subcontracts under contracts for the procurement of commercial items or commercially available off-the-shelf items is prohibited unless such flow-down is required to implement provisions of law or executive orders applicable to such subcontracts.

"(2) Subcontracts.—In this subsection, the term 'subcontract' includes a transfer of commercial items between divisions, subsidiaries, or affiliates of a contractor or subcontractor. The term does not include agreements entered into by a contractor for the supply of commodities that are intended for use in the performance of multiple contracts with the Department of Defense and other parties and are not identifiable to any particular contract."

Provisions Not Affected by Title VIII of Pub. L. 103–355

Pub. L. 103–355, title VIII, §8304, Oct. 13, 1994, 108 Stat. 3398, as amended by Pub. L. 115–232, div. A, title VIII, §812(a)(2)(C)(iii), Aug. 13, 2018, 132 Stat. 1847, provided that: "Nothing in this title [see Tables for classification] shall be construed as modifying or superseding, or as intended to impair or restrict, authorities or responsibilities under—

"(1) section 7102 of the Federal Acquisition Streamlining Act of 1994 [Pub. L. 103–355, 15 U.S.C. 644 note];

"(2) the Brooks Automatic Data Processing Act (section 111 of the Federal Property and Administrative Services Act of 1949 ([former] 40 U.S.C. 759));

"(3) Brooks Architect-Engineers Act (title IX of the Federal Property and Administrative Services Act of 1949 ([former] 40 U.S.C. 541 et seq.) [now 40 U.S.C. 1101–1104]);

"(4) subsections (a) and (d) of section 8 of the Small Business Act (15 U.S.C. 637(a) and (d)); or

"(5) the Javits-Wagner-O'Day Act ([former] 41 U.S.C. 46–48c) [now 41 U.S.C. 8501 et seq.]."

§2376. Definitions

In this chapter:

(1) The terms "commercial item", "nondevelopmental item", "component", and "commercial component" have the meanings provided in chapter 1 of title 41.

(2) The term "head of an agency" means the Secretary of Defense, the Secretary of Homeland Security, and the Administrator of the National Aeronautics and Space Administration.

(3) The term "agency" means the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration.

(Added Pub. L. 103–355, title VIII, §8103, Oct. 13, 1994, 108 Stat. 3390; amended Pub. L. 107–107, div. A, title X, §1048(a)(19), Dec. 28, 2001, 115 Stat. 1223; Pub. L. 107–296, title XVII, §1704(b)(1), Nov. 25, 2002, 116 Stat. 2314; Pub. L. 111–350, §5(b)(22), Jan. 4, 2011, 124 Stat. 3844; Pub. L. 115–232, div. A, title VIII, §836(d)(2), Aug. 13, 2018, 132 Stat. 1866.)

Amendment of Paragraph (1)

Pub. L. 115–232, div. A, title VIII, §836(d)(2), (h), Aug. 13, 2018, 132 Stat. 1866, 1874, provided that, effective Jan. 1, 2020, subject to a savings provision, paragraph (1) of this section is amended by striking "terms 'commercial item'," and inserting "terms 'commercial product', 'commercial service'," and by striking "chapter 1 of title 41" and inserting "sections 103, 103a, 110, 105, and 102, respectively, of title 41".

Amendments

2018—Par. (1). Pub. L. 115–232 substituted "terms 'commercial product', 'commercial service'," for "terms 'commercial item'," and "sections 103, 103a, 110, 105, and 102, respectively, of title 41" for "chapter 1 of title 41".

2011—Par. (1). Pub. L. 111–350 substituted "chapter 1 of title 41" for "section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403)".

2002—Par. (2). Pub. L. 107–296 substituted "of Homeland Security" for "of Transportation".

2001—Par. (1). Pub. L. 107–107 inserted "(41 U.S.C. 403)" after "section 4 of the Office of Federal Procurement Policy Act".

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

Effective Date of 2002 Amendment

Amendment by Pub. L. 107–296 effective on the date of transfer of the Coast Guard to the Department of Homeland Security, see section 1704(g) of Pub. L. 107–296, set out as a note under section 101 of this title.

§2377. Preference for acquisition of commercial items

(a) Preference.—The head of an agency shall ensure that, to the maximum extent practicable—

(1) requirements of the agency with respect to a procurement of supplies or services are stated in terms of—

(A) functions to be performed;

(B) performance required; or

(C) essential physical characteristics;


(2) such requirements are defined so that commercial items or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items other than commercial items, may be procured to fulfill such requirements; and

(3) offerors of commercial items and nondevelopmental items other than commercial items are provided an opportunity to compete in any procurement to fill such requirements.


(b) Implementation.—The head of an agency shall ensure that procurement officials in that agency, to the maximum extent practicable—

(1) acquire commercial items or nondevelopmental items other than commercial items to meet the needs of the agency;

(2) require prime contractors and subcontractors at all levels under the agency contracts to incorporate commercial items or nondevelopmental items other than commercial items as components of items supplied to the agency;

(3) modify requirements in appropriate cases to ensure that the requirements can be met by commercial items or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items other than commercial items;

(4) state specifications in terms that enable and encourage bidders and offerors to supply commercial items or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items other than commercial items in response to the agency solicitations;

(5) revise the agency's procurement policies, practices, and procedures not required by law to reduce any impediments in those policies, practices, and procedures to the acquisition of commercial items; and

(6) require training of appropriate personnel in the acquisition of commercial items.


(c) Preliminary Market Research.—(1) The head of an agency shall conduct market research appropriate to the circumstances—

(A) before developing new specifications for a procurement by that agency;

(B) before soliciting bids or proposals for a contract in excess of the simplified acquisition threshold; and

(C) before awarding a task order or delivery order in excess of the simplified acquisition threshold.


(2) The head of an agency shall use the results of market research to determine whether there are commercial items or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items other than commercial items available that—

(A) meet the agency's requirements;

(B) could be modified to meet the agency's requirements; or

(C) could meet the agency's requirements if those requirements were modified to a reasonable extent.


(3) In conducting market research, the head of an agency should not require potential sources to submit more than the minimum information that is necessary to make the determinations required in paragraph (2).

(4) The head of an agency shall take appropriate steps to ensure that any prime contractor of a contract (or task order or delivery order) in an amount in excess of $5,000,000 for the procurement of items other than commercial items engages in such market research as may be necessary to carry out the requirements of subsection (b)(2) before making purchases for or on behalf of the Department of Defense.

(d) Market Research for Price Analysis.—The Secretary of Defense shall ensure that procurement officials in the Department of Defense conduct or obtain market research to support the determination of the reasonableness of price for commercial items contained in any bid or offer submitted in response to an agency solicitation. To the extent necessary to support such market research, the procurement official for the solicitation—

(1) in the case of items acquired under section 2379 of this title, shall use information submitted under subsection (d) of that section; and

(2) in the case of other items, may require the offeror to submit relevant information.


(e) Market Research Training Required.—The Secretary of Defense shall provide mandatory training for members of the armed forces and employees of the Department of Defense responsible for the conduct of market research required under subsections (c) and (d). Such mandatory training shall, at a minimum—

(1) provide comprehensive information on the subject of market research and the function of market research in the acquisition of commercial items;

(2) teach best practices for conducting and documenting market research; and

(3) provide methodologies for establishing standard processes and reports for collecting and sharing market research across the Department.

(Added Pub. L. 103–355, title VIII, §8104(a), Oct. 13, 1994, 108 Stat. 3390; amended Pub. L. 110–181, div. A, title VIII, §826(a), Jan. 28, 2008, 122 Stat. 227; Pub. L. 114–92, div. A, title VIII, §844(a), Nov. 25, 2015, 129 Stat. 915; Pub. L. 114–328, div. A, title VIII, §871, Dec. 23, 2016, 130 Stat. 2307; Pub. L. 115–232, div. A, title VIII, §836(d)(3), (8)(C), Aug. 13, 2018, 132 Stat. 1866, 1868.)

Amendment of Section

Pub. L. 115–232, div. A, title VIII, §836(d)(3), (8)(C), (h), Aug. 13, 2018, 132 Stat. 1866, 1868, 1874, made amendments to this section, effective Jan. 1, 2020, subject to a savings provision. After Jan. 1, 2020, this section will read as follows:

§2377. Preference for commercial products and commercial services

(a) Preference.—The head of an agency shall ensure that, to the maximum extent practicable—

(1) requirements of the agency with respect to a procurement of supplies or services are stated in terms of—

(A) functions to be performed;

(B) performance required; or

(C) essential physical characteristics;


(2) such requirements are defined so that commercial services or commercial products or, to the extent that commercial products suitable to meet the agency's needs are not available, nondevelopmental items other than commercial products, may be procured to fulfill such requirements; and

(3) offerors of commercial services, commercial products, and nondevelopmental items other than commercial products are provided an opportunity to compete in any procurement to fill such requirements.


(b) Implementation.—The head of an agency shall ensure that procurement officials in that agency, to the maximum extent practicable—

(1) acquire commercial services, commercial products, or nondevelopmental items other than commercial products to meet the needs of the agency;

(2) require prime contractors and subcontractors at all levels under the agency contracts to incorporate commercial services, commercial products, or nondevelopmental items other than commercial products as components of items supplied to the agency;

(3) modify requirements in appropriate cases to ensure that the requirements can be met by commercial services or commercial products or, to the extent that commercial products suitable to meet the agency's needs are not available, nondevelopmental items other than commercial products;

(4) state specifications in terms that enable and encourage bidders and offerors to supply commercial services or commercial products or, to the extent that commercial products suitable to meet the agency's needs are not available, nondevelopmental items other than commercial products in response to the agency solicitations;

(5) revise the agency's procurement policies, practices, and procedures not required by law to reduce any impediments in those policies, practices, and procedures to the acquisition of commercial products and commercial services; and

(6) require training of appropriate personnel in the acquisition of commercial products and commercial services.


(c) Preliminary Market Research.—(1) The head of an agency shall conduct market research appropriate to the circumstances—

(A) before developing new specifications for a procurement by that agency;

(B) before soliciting bids or proposals for a contract in excess of the simplified acquisition threshold; and

(C) before awarding a task order or delivery order in excess of the simplified acquisition threshold.


(2) The head of an agency shall use the results of market research to determine whether there are commercial services or commercial products or, to the extent that commercial products suitable to meet the agency's needs are not available, nondevelopmental items other than commercial products available that—

(A) meet the agency's requirements;

(B) could be modified to meet the agency's requirements; or

(C) could meet the agency's requirements if those requirements were modified to a reasonable extent.


(3) In conducting market research, the head of an agency should not require potential sources to submit more than the minimum information that is necessary to make the determinations required in paragraph (2).

(4) The head of an agency shall take appropriate steps to ensure that any prime contractor of a contract (or task order or delivery order) in an amount in excess of $5,000,000 for the procurement of products other than commercial products or services other than commercial services engages in such market research as may be necessary to carry out the requirements of subsection (b)(2) before making purchases for or on behalf of the Department of Defense.

(d) Market Research for Price Analysis.—The Secretary of Defense shall ensure that procurement officials in the Department of Defense conduct or obtain market research to support the determination of the reasonableness of price for commercial products or commercial services contained in any bid or offer submitted in response to an agency solicitation. To the extent necessary to support such market research, the procurement official for the solicitation—

(1) in the case of products or services acquired under section 2379 of this title, shall use information submitted under subsection (d) of that section; and

(2) in the case of other products or services, may require the offeror to submit relevant information.


(e) Market Research Training Required.—The Secretary of Defense shall provide mandatory training for members of the armed forces and employees of the Department of Defense responsible for the conduct of market research required under subsections (c) and (d). Such mandatory training shall, at a minimum—

(1) provide comprehensive information on the subject of market research and the function of market research in the acquisition of commercial products and commercial services;

(2) teach best practices for conducting and documenting market research; and

(3) provide methodologies for establishing standard processes and reports for collecting and sharing market research across the Department.

See 2018 Amendment notes below.

Amendments

2018Pub. L. 115–232, §836(d)(8)(C), substituted "commercial products and commercial services" for "acquisition of commercial items" in section catchline.

Subsec. (a)(2). Pub. L. 115–232, §836(d)(3)(A)(i), substituted "commercial services or commercial products or, to the extent that commercial products suitable to meet the agency's needs are not available, nondevelopmental items other than commercial products" for "commercial items or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items other than commercial items".

Subsec. (a)(3). Pub. L. 115–232, §836(d)(3)(A)(ii), substituted "commercial services, commercial products, and nondevelopmental items other than commercial products" for "commercial items and nondevelopmental items other than commercial items".

Subsec. (b)(1), (2). Pub. L. 115–232, §836(d)(3)(B)(i), substituted "commercial services, commercial products, or nondevelopmental items other than commercial products" for "commercial items or nondevelopmental items other than commercial items".

Subsec. (b)(3), (4). Pub. L. 115–232, §836(d)(3)(B)(ii), substituted "commercial services or commercial products or, to the extent that commercial products suitable to meet the agency's needs are not available, nondevelopmental items other than commercial products" for "commercial items or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items other than commercial items".

Subsec. (b)(5), (6). Pub. L. 115–232, §836(d)(3)(B)(iii), substituted "commercial products and commercial services" for "commercial items".

Subsec. (c)(2). Pub. L. 115–232, §836(d)(3)(C)(i), in introductory provisions, substituted "commercial services or commercial products or, to the extent that commercial products suitable to meet the agency's needs are not available, nondevelopmental items other than commercial products" for "commercial items or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items other than commercial items".

Subsec. (c)(4). Pub. L. 115–232, §836(d)(3)(C)(ii), substituted "products other than commercial products or services other than commercial services" for "items other than commercial items".

Subsec. (d). Pub. L. 115–232, §836(d)(3)(D)(i), substituted "commercial products or commercial services" for "commercial items" in introductory provisions.

Subsec. (d)(1), (2). Pub. L. 115–232, §836(d)(3)(D)(ii), (iii), substituted "products or services" for "items".

Subsec. (e)(1). Pub. L. 115–232, §836(d)(3)(E), substituted "commercial products and commercial services" for "commercial items".

2016—Subsecs. (d), (e). Pub. L. 114–328 added subsec. (d), redesignated former subsec. (d) as (e), and in introductory provisions of subsec. (e), substituted "subsections (c) and (d)" for "subsection (c)".

2015—Subsec. (d). Pub. L. 114–92 added subsec. (d).

2008—Subsec. (c)(1)(C). Pub. L. 110–181, §826(a)(1), added subpar. (C).

Subsec. (c)(4). Pub. L. 110–181, §826(a)(2), added par. (4).

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

Commercial Operational and Support Savings Initiative

Pub. L. 114–328, div. A, title VIII, §849(d), Dec. 23, 2016, 130 Stat. 2294, as amended by Pub. L. 115–232, div. A, title VIII, §836(f)(7), Aug. 13, 2018, 132 Stat. 1871, provided that:

"(1) In general.—The Secretary of Defense may establish a commercial operational and support savings initiative to improve readiness and reduce operations and support costs by inserting existing commercial items or technology into military legacy systems through the rapid development of prototypes and fielding of production items based on current commercial technology.

"(2) Program priority.—The commercial operational and support savings initiative shall fund programs that—

"(A) reduce the costs of owning and operating a military system, including the costs of personnel, consumables, goods and services, and sustaining the support and investment associated with the peacetime operation of a weapon system;

"(B) take advantage of the commercial sector's technological innovations by inserting commercial technology into fielded weapon systems; and

"(C) emphasize prototyping and experimentation with new technologies and concepts of operations.

"(3) Funding phases.—

"(A) In general.—Projects funded under the commercial operational and support savings initiative shall consist of two phases, Phase I and Phase II.

"(B) Phase i.—(i) Funds made available during Phase I shall be used to perform the non-recurring engineering, testing, and qualification that are typically needed to adapt a commercial item or technology for use in a military system.

"(ii) Phase I shall include—

"(I) establishment of cost and performance metrics to evaluate project success;

"(II) establishment of a transition plan and agreement with a military department or Defense Agency for adoption and sustainment of the technology or system; and

"(III) the development, fabrication, and delivery of a demonstrated prototype to a military department for installation into a fielded Department of Defense system.

"(iii) Programs shall be terminated if no agreement is established within two years of project initiation.

"(iv) The Office of the Secretary of Defense may provide up to 50 percent of Phase I funding for a project. The military department or Defense Agency concerned may provide the remainder of Phase I funding, which may be provided out of operation and maintenance funding.

"(v) Phase I funding shall not exceed three years.

"(vi) Phase I projects shall be selected based on a merit-based process using criteria to be established by the Secretary of Defense.

"(C) Phase ii.—(i) Phase II shall include the purchase of limited production quantities of the prototype kits and transition to a program of record for continued sustainment.

"(ii) Phase II awards may be made without competition if general solicitation competitive procedures were used for the selection of parties for participation in a Phase I project.

"(iii) Phase II awards may be made as firm fixed-price awards.

"(4) Treatment as competitive procedures.—The use of a merit-based process for selection of projects under the commercial operational and support savings initiative shall be considered to be the use of competitive procedures for purposes of chapter 137 of title 10, United States Code."

[Pub. L. 115–232, div. A, title VIII, §836(f)(7), (h), Aug. 13, 2018, 132 Stat. 1871, 1874, provided that, effective Jan. 1, 2020, subject to a savings provision, section 849(d) of Pub. L. 114–328, set out above, is amended:

[(1) in paragraph (1), by striking "commercial items" and inserting "commercial products";

[(2) in paragraph (3)(B)(i), by striking "commercial item" and inserting "commercial product"; and

[(3) by adding at the end the following new paragraph:

["(5) Definition.—In this subsection, the term 'commercial product' has the meaning given that term in section 103 of title 41."]

Preference for Commercial Services

Pub. L. 114–328, div. A, title VIII, §876, Dec. 23, 2016, 130 Stat. 2311, provided that: "Not later than 90 days after the date of the enactment of this Act [Dec. 23, 2016], the Secretary of Defense shall revise the guidance issued pursuant to section 855 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92; 10 U.S.C. 2377 note) to provide that—

"(1) the head of an agency may not enter into a contract in excess of $10,000,000 for facilities-related services, knowledge-based services (except engineering services), construction services, medical services, or transportation services that are not commercial services unless the service acquisition executive of the military department concerned, the head of the Defense Agency concerned, the commander of the combatant command concerned, or the Under Secretary of Defense for Acquisition, Technology, and Logistics (as applicable) determines in writing that no commercial services are suitable to meet the agency's needs as provided in section 2377(c)(2) of title 10, United States Code; and

"(2) the head of an agency may not enter into a contract in an amount above the simplified acquisition threshold and below $10,000,000 for facilities-related services, knowledge-based services (except engineering services), construction services, medical services, or transportation services that are not commercial services unless the contracting officer determines in writing that no commercial services are suitable to meet the agency's needs as provided in section 2377(c)(2) of such title."

Incorporation Into Management Certification Training Mandate

Pub. L. 114–92, div. A, title VIII, §844(b), Nov. 25, 2015, 129 Stat. 915, provided that: "The Chairman of the Joint Chiefs of Staff shall ensure that the requirements of section 2377(d) [now 2377(e)] of title 10, United States Code, as added by subsection (a), are incorporated into the requirements management certification training mandate of the Joint Capabilities Integration Development System."

Market Research and Preference for Commercial Items

Pub. L. 114–92, div. A, title VIII, §855, Nov. 25, 2015, 129 Stat. 919, provided that:

"(a) Guidance Required.—Not later than 90 days after the date of the enactment of this Act [Nov. 25, 2015], the Under Secretary of Defense for Acquisition, Technology, and Logistics shall issue guidance to ensure that acquisition officials of the Department of Defense fully comply with the requirements of section 2377 of title 10, United States Code, regarding market research and commercial items. The guidance issued pursuant to this subsection shall, at a minimum—

"(1) provide that the head of an agency may not enter into a contract in excess of the simplified acquisition threshold for information technology products or services that are not commercial items unless the head of the agency determines in writing that no commercial items are suitable to meet the agency's needs as provided in subsection (c)(2) of such section; and

"(2) ensure that market research conducted in accordance with subsection (c) of such section is used, where appropriate, to inform price reasonableness determinations.

"(b) Review Required.—Not later than 180 days after the date of the enactment of this Act [Nov. 25, 2015], the Chairman and the Vice Chairman of the Joint Chiefs of Staff, in consultation with the Under Secretary of Defense for Acquisition, Technology, and Logistics, shall review Chairman of the Joint Chiefs of Staff Instruction 3170.01, the Manual for the Operation of the Joint Capabilities Integration and Development System, and other documents governing the requirements development process and revise these documents as necessary to ensure that the Department of Defense fully complies with the requirement in section 2377(c) of title 10, United States Code, and section 10.001 of the Federal Acquisition Regulation for Federal agencies to conduct appropriate market research before developing new requirements.

"(c) Market Research Defined.—For the purposes of this section, the term 'market research' means a review of existing systems, subsystems, capabilities, and technologies that are available or could be made available to meet the needs of the Department of Defense in whole or in part. The review may include any of the techniques for conducting market research provided in section 10.002(b)(2) of the Federal Acquisition Regulation and shall include, at a minimum, contacting knowledgeable individuals in Government and industry regarding existing market capabilities."

Limitation on Conversion of Procurements From Commercial Acquisition Procedures

Pub. L. 114–92, div. A, title VIII, §856, Nov. 25, 2015, 129 Stat. 920, as amended by Pub. L. 115–232, div. A, title VIII, §836(f)(8), Aug. 13, 2018, 132 Stat. 1872, provided that:

"(a) Limitation.—

"(1) In general.—Except as provided in paragraph (2), prior to converting the procurement of commercial items or services valued at more than $1,000,000 from commercial acquisition procedures under part 12 of the Federal Acquisition Regulation to noncommercial acquisition procedures under part 15 of the Federal Acquisition Regulation, the contracting officer for the procurement shall determine in writing that—

"(A) the earlier use of commercial acquisition procedures under part 12 of the Federal Acquisition Regulation was in error or based on inadequate information; and

"(B) the Department of Defense will realize a cost savings compared to the cost of procuring a similar quantity or level of such item or service using commercial acquisition procedures.

"(2) Requirement for approval of determination by head of contracting activity.—In the case of a procurement valued at more than $100,000,000, a contract may not be awarded pursuant to a conversion of the procurement described in paragraph (1) until—

"(A) the head of the contracting activity approves the determination made under paragraph (1); and

"(B) a copy of the determination so approved is provided to the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics.

"(b) Factors to Be Considered.—In making a determination under paragraph (1), the determining official shall, at a minimum, consider the following factors:

"(1) The estimated cost of research and development to be performed by the existing contractor to improve future products or services.

"(2) The transaction costs for the Department of Defense and the contractor in assessing and responding to data requests to support a conversion to noncommercial acquisition procedures.

"(3) Changes in purchase quantities.

"(4) Costs associated with potential procurement delays resulting from the conversion.

"(c) Procedures.—Not later than 180 days after the date of the enactment of this Act [Nov. 25, 2015], the Secretary of Defense shall develop procedures to track conversions of future contracts and subcontracts for improved analysis and reporting and shall revise the Defense Federal Acquisition Regulation Supplement to reflect the requirement in subsection (a).

"(d) Reporting Requirement.—Not later than one year after the date of the enactment of this Act, the Secretary of Defense shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the implementation of subsection (a), including any procurements converted as described in that subsection.

"(e) Sunset.—The requirements of this section shall terminate 5 years after the date of the enactment of this Act [Nov. 25, 2015]."

[Pub. L. 115–232, div. A, title VIII, §836(f)(8), (h), Aug. 13, 2018, 132 Stat. 1872, 1874, provided that, effective Jan. 1, 2020, subject to a savings provision, section 856(a)(1) of Pub. L. 114–92, set out above, is amended by striking "commercial items or services" and inserting "a commercial product or a commercial service, as defined in sections 103 and 103a, respectively, of title 41,".]

Commercial Software Reuse Preference

Pub. L. 110–417, [div. A], title VIII, §803, Oct. 14, 2008, 122 Stat. 4519, provided that:

"(a) In General.—The Secretary of Defense shall ensure that contracting officials identify and evaluate, at all stages of the acquisition process (including concept refinement, concept decision, and technology development), opportunities for the use of commercial computer software and other non-developmental software.

"(b) Report.—Not later than 270 days after the date of enactment of this Act [Oct. 14, 2008], the Secretary shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on actions taken to implement subsection (a), including a description of any relevant regulations and policy guidance."

Requirement To Develop Training and Tools

Pub. L. 110–181, div. A, title VIII, §826(b), Jan. 28, 2008, 122 Stat. 228, provided that: "The Secretary of Defense shall develop training to assist contracting officers, and market research tools to assist such officers and prime contractors, in performing appropriate market research as required by subsection (c) of section 2377 of title 10, United States Code, as amended by this section."

[§2378. Repealed. Pub. L. 114–328, div. A, title VIII, §833(b)(3)(A), Dec. 23, 2016, 130 Stat. 2284]

Section, added Pub. L. 105–85, div. A, title III, §350(a), Nov. 18, 1997, 111 Stat. 1691, related to procurement of copier paper containing specified percentages of post-consumer recycled content.

§2379. Requirement for determination by Secretary of Defense and notification to Congress before procurement of major weapon systems as commercial items

(a) Requirement for Determination and Notification.—A major weapon system of the Department of Defense may be treated as a commercial item, or purchased under procedures established for the procurement of commercial items, only if—

(1) the Secretary of Defense determines that—

(A) the major weapon system is a commercial item, as defined in section 103 of title 41; and

(B) such treatment is necessary to meet national security objectives; and


(2) the congressional defense committees are notified at least 30 days before such treatment or purchase occurs.


(b) Treatment of Subsystems as Commercial Items.—A subsystem of a major weapon system (other than a commercially available off-the-shelf item as defined in section 104 of title 41) shall be treated as a commercial item and purchased under procedures established for the procurement of commercial items if either—

(1) the subsystem is intended for a major weapon system that is being purchased, or has been purchased, under procedures established for the procurement of commercial items in accordance with the requirements of subsection (a); or

(2) the contracting officer determines in writing that the subsystem is a commercial item, as defined in section 103 of title 41.


(c) Treatment of Components and Spare Parts as Commercial Items.—(1) A component or spare part for a major weapon system (other than a commercially available off-the-shelf item as defined in section 104 of title 41) may be treated as a commercial item for the purposes of section 2306a of this title if either—

(A) the component or spare part is intended for—

(i) a major weapon system that is being purchased, or has been purchased, under procedures established for the procurement of commercial items in accordance with the requirements of subsection (a); or

(ii) a subsystem of a major weapon system that is being purchased, or has been purchased, under procedures established for the procurement of commercial items in accordance with the requirements of subsection (b); or


(B) the contracting officer determines in writing that the component or spare part is a commercial item, as defined in section 103 of title 41.


(2) This subsection shall apply only to components and spare parts that are acquired by the Department of Defense through a prime contract or a modification to a prime contract (or through a subcontract under a prime contract or modification to a prime contract on which the prime contractor adds no, or negligible, value).

(d) Information Submitted.—(1) To the extent necessary to determine the reasonableness of the price for items acquired under this section, the contracting officer shall require the offeror to submit—

(A) prices paid for the same or similar commercial items under comparable terms and conditions by both Government and commercial customers;

(B) if the contracting officer determines that the offeror does not have access to and cannot provide sufficient information described in subparagraph (A) to determine the reasonableness of price, information on—

(i) prices for the same or similar items sold under different terms and conditions;

(ii) prices for similar levels of work or effort on related products or services;

(iii) prices for alternative solutions or approaches; and

(iv) other relevant information that can serve as the basis for a price assessment; and


(C) if the contracting officer determines that the information submitted pursuant to subparagraphs (A) and (B) is not sufficient to determine the reasonableness of price, other relevant information regarding the basis for price or cost, including information on labor costs, material costs, and overhead rates.


(2) An offeror may submit information or analysis relating to the value of a commercial item to aid in the determination of the reasonableness of the price of such item. A contracting officer may consider such information or analysis in addition to the information submitted pursuant to paragraphs (1)(A) and (1)(B).

(3) An offeror may not be required to submit information described in paragraph (1)(C) with regard to a commercially available off-the-shelf item and may be required to submit such information with regard to any other item that was developed exclusively at private expense only after the head of the contracting activity determines in writing that the information submitted pursuant to paragraphs (1)(A) and (1)(B) is not sufficient to determine the reasonableness of price.


(e) Delegation.—The authority of the Secretary of Defense to make a determination under subsection (a) may be delegated only to the Deputy Secretary of Defense, without further redelegation.

(f) Major Weapon System Defined.—In this section, the term "major weapon system" means a weapon system acquired pursuant to a major defense acquisition program (as that term is defined in section 2430 of this title).

(Added Pub. L. 109–163, div. A, title VIII, §803(a)(1), Jan. 6, 2006, 119 Stat. 3370; amended Pub. L. 110–181, div. A, title VIII, §815(a)(1), Jan. 28, 2008, 122 Stat. 222; Pub. L. 113–291, div. A, title X, §1071(a)(7), Dec. 19, 2014, 128 Stat. 3504; Pub. L. 114–92, div. A, title VIII, §852(a)–(d), Nov. 25, 2015, 129 Stat. 917, 918; Pub. L. 114–328, div. A, title VIII, §872, Dec. 23, 2016, 130 Stat. 2307; Pub. L. 115–232, div. A, title VIII, §836(d)(4), (8)(D), Aug. 13, 2018, 132 Stat. 1868, 1869.)

Amendment of Section

Pub. L. 115–232, div. A, title VIII, §836(d)(4), (8)(D), (h), Aug. 13, 2018, 132 Stat. 1868, 1869, 1874, made amendments to this section, effective Jan. 1, 2020, subject to a savings provision. After Jan. 1, 2020, this section will read as follows:

§2379. Procurement of a major weapon system as a commercial product: requirement for prior determination by Secretary of Defense and notification to Congress

(a) Requirement for Determination and Notification.—A major weapon system of the Department of Defense may be treated as a commercial product, or purchased under procedures established for the procurement of commercial products, only if—

(1) the Secretary of Defense determines that—

(A) the major weapon system is a commercial product; and

(B) such treatment is necessary to meet national security objectives; and


(2) the congressional defense committees are notified at least 30 days before such treatment or purchase occurs.


(b) Treatment of Subsystems as Commercial Products.—A subsystem of a major weapon system (other than a commercially available off-the-shelf item as defined in section 104 of title 41) shall be treated as a commercial product and purchased under procedures established for the procurement of commercial products if either—

(1) the subsystem is intended for a major weapon system that is being purchased, or has been purchased, under procedures established for the procurement of commercial products in accordance with the requirements of subsection (a); or

(2) the contracting officer determines in writing that the subsystem is a commercial product.


(c) Treatment of Components and Spare Parts as Commercial Products.—(1) A component or spare part for a major weapon system (other than a commercially available off-the-shelf item as defined in section 104 of title 41) may be treated as a commercial product for the purposes of section 2306a of this title if either—

(A) the component or spare part is intended for—

(i) a major weapon system that is being purchased, or has been purchased, under procedures established for the procurement of commercial products in accordance with the requirements of subsection (a); or

(ii) a subsystem of a major weapon system that is being purchased, or has been purchased, under procedures established for the procurement of commercial products in accordance with the requirements of subsection (b); or


(B) the contracting officer determines in writing that the component or spare part is a commercial product.


(2) This subsection shall apply only to components and spare parts that are acquired by the Department of Defense through a prime contract or a modification to a prime contract (or through a subcontract under a prime contract or modification to a prime contract on which the prime contractor adds no, or negligible, value).

(d) Information Submitted.—(1) To the extent necessary to determine the reasonableness of the price for items acquired under this section, the contracting officer shall require the offeror to submit—

(A) prices paid for the same or similar commercial products under comparable terms and conditions by both Government and commercial customers;

(B) if the contracting officer determines that the offeror does not have access to and cannot provide sufficient information described in subparagraph (A) to determine the reasonableness of price, information on—

(i) prices for the same or similar items sold under different terms and conditions;

(ii) prices for similar levels of work or effort on related products or services;

(iii) prices for alternative solutions or approaches; and

(iv) other relevant information that can serve as the basis for a price assessment; and


(C) if the contracting officer determines that the information submitted pursuant to subparagraphs (A) and (B) is not sufficient to determine the reasonableness of price, other relevant information regarding the basis for price or cost, including information on labor costs, material costs, and overhead rates.


(2) An offeror may submit information or analysis relating to the value of a commercial product to aid in the determination of the reasonableness of the price of such item. A contracting officer may consider such information or analysis in addition to the information submitted pursuant to paragraphs (1)(A) and (1)(B).

(3) An offeror may not be required to submit information described in paragraph (1)(C) with regard to a commercially available off-the-shelf item and may be required to submit such information with regard to any other item that was developed exclusively at private expense only after the head of the contracting activity determines in writing that the information submitted pursuant to paragraphs (1)(A) and (1)(B) is not sufficient to determine the reasonableness of price.


(e) Delegation.—The authority of the Secretary of Defense to make a determination under subsection (a) may be delegated only to the Deputy Secretary of Defense, without further redelegation.

(f) Major Weapon System Defined.—In this section, the term "major weapon system" means a weapon system acquired pursuant to a major defense acquisition program (as that term is defined in section 2430 of this title).

See 2018 Amendment notes below.

Amendments

2018Pub. L. 115–232, §836(d)(8)(D), substituted "Procurement of a major weapon system as a commercial product: requirement for prior determination by Secretary of Defense and notification to Congress" for "Requirement for determination by Secretary of Defense and notification to Congress before procurement of major weapon systems as commercial items" in section catchline.

Pub. L. 115–232, §836(d)(4)(C), substituted "commercial product" for "commercial item" and "commercial products" for "commercial items" wherever appearing.

Subsec. (a)(1)(A). Pub. L. 115–232, §836(d)(4)(B), struck out ", as defined in section 103 of title 41" before "; and".

Subsec. (b). Pub. L. 115–232, §836(d)(4)(A), substituted "Commercial Products" for "Commercial Items" in heading.

Subsec. (b)(2). Pub. L. 115–232, §836(d)(4)(B), struck out ", as defined in section 103 of title 41" before period.

Subsec. (c). Pub. L. 115–232, §836(d)(4)(A), substituted "Commercial Products" for "Commercial Items" in heading.

Subsec. (c)(1)(B). Pub. L. 115–232, §836(d)(4)(B), struck out ", as defined in section 103 of title 41" before period.

2016—Subsec. (d)(2), (3). Pub. L. 114–328 added par. (2) and redesignated former par. (2) as (3).

2015—Subsec. (a). Pub. L. 114–92, §852(a), inserted "and" at end of par. (1)(B), redesignated par. (3) as (2), and struck out former par. (2) which read as follows: "the offeror has submitted sufficient information to evaluate, through price analysis, the reasonableness of the price for such system; and".

Subsec. (b). Pub. L. 114–92, §852(b)(1), substituted "if either" for "only if" in introductory provisions.

Subsec. (b)(2). Pub. L. 114–92, §852(b)(2), substituted "writing that" for "writing that—", struck out subpar. (A) designation before "the subsystem is a", substituted "title 41." for "title 41; and", and struck out subpar. (B) which read as follows: "the offeror has submitted sufficient information to evaluate, through price analysis, the reasonableness of the price for such subsystem."

Subsec. (c)(1). Pub. L. 114–92, §852(c)(1), substituted "title if either" for "title only if" in introductory provisions.

Subsec. (c)(1)(B). Pub. L. 114–92, §852(c)(2), substituted "writing that" for "writing that—", struck out cl. (i) designation before "the component or", substituted "title 41." for "title 41; and", and struck out cl. (ii) which read as follows: "the offeror has submitted sufficient information to evaluate, through price analysis, the reasonableness of the price for such component or spare part."

Subsec. (d). Pub. L. 114–92, §852(d), amended subsec. (d) generally. Prior to amendment, text read as follows: "To the extent necessary to make a determination under subsection (a)(2), (b)(2), or (c)(1)(B), the contracting officer may request the offeror to submit—

"(1) prices paid for the same or similar commercial items under comparable terms and conditions by both government and commercial customers; and

"(2) if the contracting officer determines that the information described in paragraph (1) is not sufficient to determine the reasonableness of price, other relevant information regarding the basis for price or cost, including information on labor costs, material costs, and overhead rates."

2014—Subsec. (a)(1)(A). Pub. L. 113–291, §1071(a)(7)(A), substituted "section 103 of title 41" for "section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12))".

Subsec. (b). Pub. L. 113–291, §1071(a)(7)(B), substituted "section 104 of title 41" for "section 35(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 431(c))" in introductory provisions.

Subsec. (b)(2)(A). Pub. L. 113–291, §1071(a)(7)(A), substituted "section 103 of title 41" for "section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12))".

Subsec. (c)(1). Pub. L. 113–291, §1071(a)(7)(B), substituted "section 104 of title 41" for "section 35(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 431(c))" in introductory provisions.

Subsec. (c)(1)(B)(i). Pub. L. 113–291, §1071(a)(7)(A), substituted "section 103 of title 41" for "section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12))".

2008—Subsec. (a)(2), (3). Pub. L. 110–181, §815(a)(1)(A), added par. (2) and redesignated former par. (2) as (3).

Subsec. (b). Pub. L. 110–181, §815(a)(1)(B), added subsec. (b) and struck out former subsec. (b). Former text read as follows: "A subsystem or component of a major weapon system shall be treated as a commercial item and purchased under procedures established for the procurement of commercial items if such subsystem or component otherwise meets the requirements (other than requirements under subsection (a)) for treatment as a commercial item."

Subsecs. (c) to (f). Pub. L. 110–181, §815(a)(1)(C), (D), added subsecs. (c) and (d) and redesignated former subsecs. (c) and (d) as (e) and (f), respectively.

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

Effective Date

Pub. L. 109–163, div. A, title VIII, §803(b), Jan. 6, 2006, 119 Stat. 3371, provided that: "The amendments made by subsection (a) [enacting this section] shall take effect on the date of the enactment of this Act [Jan. 6, 2006], and shall apply to contracts entered into on or after such date."

§2380. Commercial item determinations by Department of Defense

(a) In General.—The Secretary of Defense shall—

(1) establish and maintain a centralized capability with necessary expertise and resources to provide assistance to the military departments and Defense Agencies in making commercial item determinations, conducting market research, and performing analysis of price reasonableness for the purposes of procurements by the Department of Defense; and

(2) provide to officials of the Department of Defense access to previous Department of Defense commercial item determinations, market research, and analysis used to determine the reasonableness of price for the purposes of procurements by the Department of Defense.


(b) Items Previously Acquired Using Commercial Item Acquisition Procedures.—

(1) Determinations.—A contract for an item acquired using commercial item acquisition procedures under part 12 of the Federal Acquisition Regulation shall serve as a prior commercial item determination with respect to such item for purposes of this chapter unless the senior procurement executive of the military department or the Department of Defense as designated for purposes of section 1702(c) of title 41 determines in writing that it is no longer appropriate to acquire the item using commercial item acquisition procedures.

(2) Limitation.—(A) Except as provided under subparagraph (B), funds appropriated or otherwise made available to the Department of Defense may not be used for the procurement under part 15 of the Federal Acquisition Regulation of an item that was previously acquired under a contract using commercial item acquisition procedures under part 12 of the Federal Acquisition Regulation.

(B) The limitation under subparagraph (A) does not apply to the procurement of an item that was previously acquired using commercial item acquisition procedures under part 12 of the Federal Acquisition Regulation following—

(i) a written determination by the head of contracting activity pursuant to section 2306a(b)(4)(B) of this title that the use of such procedures was improper; or

(ii) a written determination by the senior procurement executive of the military department or the Department of Defense as designated for purposes of section 1702(c) of title 41 that it is no longer appropriate to acquire the item using such procedures.

(Added Pub. L. 114–92, div. A, title VIII, §851(a)(1), Nov. 25, 2015, 129 Stat. 916; amended Pub. L. 114–328, div. A, title VIII, §873, Dec. 23, 2016, 130 Stat. 2307; Pub. L. 115–91, div. A, title VIII, §848, Dec. 12, 2017, 131 Stat. 1487; Pub. L. 115–232, div. A, title VIII, §836(d)(5), (8)(E), Aug. 13, 2018, 132 Stat. 1868, 1869.)

Amendment of Section

Pub. L. 115–232, div. A, title VIII, §836(d)(5), (8)(E), (h), Aug. 13, 2018, 132 Stat. 1868, 1869, 1874, made amendments to this section, effective Jan. 1, 2020, subject to a savings provision. After Jan. 1, 2020, this section will read as follows:

§2380. Commercial product and commercial service determinations by Department of Defense

(a) In General.—The Secretary of Defense shall—

(1) establish and maintain a centralized capability with necessary expertise and resources to provide assistance to the military departments and Defense Agencies in making commercial product and commercial service determinations, conducting market research, and performing analysis of price reasonableness for the purposes of procurements by the Department of Defense; and

(2) provide to officials of the Department of Defense access to previous Department of Defense commercial product and commercial service determinations, market research, and analysis used to determine the reasonableness of price for the purposes of procurements by the Department of Defense.


(b) Items Previously Acquired Using Commercial Acquisition Procedures.—

(1) Determinations.—A contract for a product or service acquired using commercial acquisition procedures under part 12 of the Federal Acquisition Regulation shall serve as a prior commercial product or service determination with respect to such product or service for purposes of this chapter unless the senior procurement executive of the military department or the Department of Defense as designated for purposes of section 1702(c) of title 41 determines in writing that it is no longer appropriate to acquire the product or service using commercial acquisition procedures.

(2) Limitation.—(A) Except as provided under subparagraph (B), funds appropriated or otherwise made available to the Department of Defense may not be used for the procurement under part 15 of the Federal Acquisition Regulation of a product or service that was previously acquired under a contract using commercial acquisition procedures under part 12 of the Federal Acquisition Regulation.

(B) The limitation under subparagraph (A) does not apply to the procurement of a product or service that was previously acquired using commercial acquisition procedures under part 12 of the Federal Acquisition Regulation following—

(i) a written determination by the head of contracting activity pursuant to section 2306a(b)(4)(B) of this title that the use of such procedures was improper; or

(ii) a written determination by the senior procurement executive of the military department or the Department of Defense as designated for purposes of section 1702(c) of title 41 that it is no longer appropriate to acquire the product or service using such procedures.

See 2018 Amendment notes below.

Amendments

2018Pub. L. 115–232, §836(d)(8)(E), substituted "Commercial product and commercial service" for "Commercial item" in section catchline.

Subsec. (a). Pub. L. 115–232, §836(d)(5)(A), substituted "commercial product and commercial service determinations" for "commercial item determinations" in pars. (1) and (2).

Subsec. (b). Pub. L. 115–232, §836(d)(5)(B)(i)–(iii), in heading, struck out "Item" after "Commercial" and, in text, substituted "a product or service" for "an item" and struck out "item" after "using commercial" wherever appearing.

Subsec. (b)(1). Pub. L. 115–232, §836(d)(5)(B)(iv)–(vi) substituted "prior commercial product or service determination" for "prior commercial item determination", "such product or service" for "such item", and "the product or service" for "the item".

Subsec. (b)(2)(B)(ii). Pub. L. 115–232, §836(d)(5)(B)(vi), substituted "the product or service" for "the item".

2017Pub. L. 115–91 designated existing provisions as subsec. (a), inserted heading, and added subsec. (b).

2016—Pars. (1), (2). Pub. L. 114–328 amended pars. (1) and (2) generally. Prior to amendment, pars. (1) and (2) read as follows:

"(1) establish and maintain a centralized capability with necessary expertise and resources to oversee the making of commercial item determinations for the purposes of procurements by the Department of Defense; and

"(2) provide public access to Department of Defense commercial item determinations for the purposes of procurements by the Department of Defense."

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§2380a. Treatment of certain items as commercial items

(a) Goods and Services Provided by Nontraditional Defense Contractors.—Notwithstanding section 2376(1) of this title, items and services provided by nontraditional defense contractors (as that term is defined in section 2302(9) of this title) may be treated by the head of an agency as commercial items for purposes of this chapter.

(b) Services Provided by Certain Nontraditional Contractors.—Notwithstanding section 2376(1) of this title, services provided by a business unit that is a nontraditional defense contractor (as that term is defined in section 2302(9) of this title) shall be treated as commercial items for purposes of this chapter, to the extent that such services use the same pool of employees as used for commercial customers and are priced using methodology similar to methodology used for commercial pricing.

(Added Pub. L. 114–92, div. A, title VIII, §857(a), Nov. 25, 2015, 129 Stat. 921, §2380A; renumbered §2380a and amended Pub. L. 114–328, div. A, title VIII, §878(a), (b)(1), Dec. 23, 2016, 130 Stat. 2312; Pub. L. 115–232, div. A, title VIII, §836(d)(6), (8)(F), Aug. 13, 2018, 132 Stat. 1868, 1869.)

Amendment of Section

Pub. L. 115–232, div. A, title VIII, §836(d)(6), (8)(F), (h), Aug. 13, 2018, 132 Stat. 1868, 1869, 1874, made amendments to this section, effective Jan. 1, 2020, subject to a savings provision. After Jan. 1, 2020, this section will read as follows:

§2380a. Treatment of certain products and services as commercial products and commercial services

(a) Goods and Services Provided by Nontraditional Defense Contractors.—Notwithstanding section 2376(1) of this title, products and services provided by nontraditional defense contractors (as that term is defined in section 2302(9) of this title) may be treated by the head of an agency as commercial products and commercial services, respectively, for purposes of this chapter.

(b) Services Provided by Certain Nontraditional Contractors.—Notwithstanding section 2376(1) of this title, services provided by a business unit that is a nontraditional defense contractor (as that term is defined in section 2302(9) of this title) shall be treated as commercial services for purposes of this chapter, to the extent that such services use the same pool of employees as used for commercial customers and are priced using methodology similar to methodology used for commercial pricing.

See 2018 Amendment notes below.

Amendments

2018Pub. L. 115–232, §836(d)(8)(F), substituted "products and services as commercial products and commercial services" for "items as commercial items" in section catchline.

Subsec. (a). Pub. L. 115–232, §836(d)(6)(A), substituted "products and" for "items and" and "commercial products and commercial services, respectively," for "commercial items".

Subsec. (b). Pub. L. 115–232, §836(d)(6)(B), substituted "commercial services" for "commercial items".

2016Pub. L. 114–328, §878(b)(1), which directed amendment of "Section 2380A of title 10" by striking out the section catchline and inserting "§2380a. Treatment of certain items as commercial items", was executed by redesignating this section as section 2380a and substituting "Treatment of certain items as commercial items" for "Treatment of goods and services provided by nontraditional defense contractors as commercial items" in section catchline, to reflect the probable intent of Congress.

Pub. L. 114–328, §878(a), designated existing provisions as subsec. (a), inserted heading, and added subsec. (b).

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§2380B. Treatment of commingled items purchased by contractors as commercial items

Notwithstanding 2376(1) of this title, items valued at less than $10,000 that are purchased by a contractor for use in the performance of multiple contracts with the Department of Defense and other parties and are not identifiable to any particular contract shall be treated as a commercial item for purposed of this chapter.

(Added Pub. L. 114–328, div. A, title VIII, §877(a), Dec. 23, 2016, 130 Stat. 2311, §2380B; renumbered §2380b and amended Pub. L. 115–232, div. A, title VIII, §836(d)(7), (8)(G), Aug. 13, 2018, 132 Stat. 1868, 1869.)

Amendment of Section

Pub. L. 115–232, div. A, title VIII, §836(d)(7), (8)(G), (h), Aug. 13, 2018, 132 Stat. 1868, 1869, 1874, made amendments to this section, effective Jan. 1, 2020, subject to a savings provision. After Jan. 1, 2020, this section will read as follows:

§2380b. Treatment of commingled items purchased by contractors as commercial products

Notwithstanding 2376(1) of this title, items valued at less than $10,000 that are purchased by a contractor for use in the performance of multiple contracts with the Department of Defense and other parties and are not identifiable to any particular contract shall be treated as a commercial product for purposed of this chapter.

See 2018 Amendment note below.

Amendments

2018Pub. L. 115–232 renumbered section 2380B of this title as this section and substituted "commercial products" for "commercial items" in section catchline and "commercial product" for "commercial item" in text.

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.