DoD IG – Report on Commercial Items and Price Reasonableness

By Craig Stetson

This likely will add to the current controversy re commercial item determinations and related price reasonableness.  The government and contractors are supposed to procure commercial items to the maximum extent practicable pursuant to FAR Part 12 requirements.  However, obtaining the commercial item determination may be a challenge based on recent decisions.  Also, the prices are required to be fair and reasonableness based on some form of price analysis.

What will be interesting is the forthcoming DoD guidance referred to in the report (first para under recommendations).  I am not aware of any ‘percentages’ that are required to support a commercial item determination.  Actually, the ‘percentage’ could be zero as the subject parts only need to be offered for sale, lease or license to the general public in accordance with the FAR Part 2 definition.

The obvious outcome here is existence of adequate documentation to support your procurement decisions.

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