FAR Commercial Items Clause and Market Research Requirements

Sometimes the government’s solicitation for commercial items substantially differs from customary commercial industry practices.  Companies seeking to bid on federal contracts could struggle with meeting the government’s FAR requirements. This can also create problems for bidders and even lead to a pre-award bid protest.

If the federal government procures under the FAR commercial items clause, it should not expect bidders to suddenly change the norm from what is common practice.

This leads to a common dispute in government contract protests that challenge the agency’s market research.

If the federal government procures under the FAR commercial items clause, it should not expect bidders to suddenly change the norm from what is common practice. This leads to a common dispute in government contract protests that challenge the agency’s market research.

Application of FAR Commercial Items Clause and Government’s Market Research Requirement

Procurement regulations make it clear that when planning and soliciting bids in acquisitions for commercial items the Agency has to follow certain requirements. For example, FAR 10.002(b) requires market research by the acquiring agency to address, among other things, customary practices regarding the provision of the commercial item.

GAO decided this very issue in  Northrop Grumman Tech. Servs., Inc., B-406523, June 22, 2012, 2012 CPD ¶ 197 at 14-15. In addition, FAR 12.302(c) bars the tailoring of solicitations for commercial items in a manner inconsistent with customary commercial practice unless a waiver is approved in accordance with agency procedures.

Waiver of the Rule in Bid Protest Cases: The government sometimes has a unique way of conducting its mission. Therefore, procurement contracts may require a waiver to the general rule under the FAR commercial items clause. See information about commercial off the shelf  (COTS items and contracts) items. See information about SDVOSB Service-Disabled Veteran Owned Business & FAR Government Market Research.

Such a waiver must describe the customary commercial practice found in the marketplace, support the need to include a term or condition that is inconsistent with that practice, and include a determination that the use of the customary commercial practice is inconsistent with the needs of the government. See FAR § 12.302(c). See also How A Small Business Won Their GAO Protest of Berry Amendment Restrictive Solicitation Requirements.

Although government contracting agencies have vast latitude and discretion when advertising for commercial products, such discretion is limited to regulations and procurement law. It must conduct FAR market research and comply with waiver exceptions.

Government contractors must still be careful when filing a bid protest. If the Agency does decide to utilize the waiver exception to the FAR commercial clause and document its market research, GAO may be only required to decide whether the Agency’s actions and documentation are reasonable. This will make the protest harder to win.

Speak to an Attorney & Get a Free Initial Consultation

For help with filing a challenge to an Agency’s procurement under COTS Items and the commercial items clause and improper FAR market research allegations, call our bid protest lawyers at 1-866-601-5518.