41 U.S.C. § 3307 — Preference for commercial products and

Page 96 TITLE 41—PUBLIC CONTRACTS § 3307 requirements, would be adversely impacted if telecommuting is allowed and documents in writing the basis for the determination. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3752; Pub. L. 115–232, div. A, title VIII, §§ 836(b)(9), 876, Aug. 13, 2018, 132 Stat. 1861, 1907.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3306(a)–(e) .. 41:253a. June 30, 1949, ch. 288, title III, § 303A, as added Pub. L. 98–369, title VII, § 2711(a)(2), July 18, 1984, 98 Stat. 1178; Pub. L. 103–355, title I, §§ 1061(a), (b), 1062, title IV, § 4402(b), Oct. 13, 1994, 108 Stat. 3266, 3267, 3348; Pub. L. 104–106, title XLII, § 4202(b)(2), Feb. 10, 1996, 110 Stat. 653. 3306(f) ........ 41:253a note. Pub. L. 108–136, title XIV, § 1428, Nov. 24, 2003, 117 Stat. 1670. In subsection (f)(2), the words ‘‘Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulatory Council shall amend’’ are omitted as obsolete. Editorial Notes AMENDMENTS 2018—Subsec. (b). Pub. L. 115–232, § 836(b)(9), sub- stituted ‘‘commercial products or commercial services’’ for ‘‘commercial items’’ in introductory provisions. Subsec. (c)(1)(B), (C). Pub. L. 115–232, § 876(1), inserted ‘‘except as provided in paragraph (3),’’ after subpar. des- ignation. Subsec. (c)(3), (4). Pub. L. 115–232, § 876(2), added pars. (3) and (4). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2018 AMENDMENT Amendment by section 836(b)(9) of Pub. L. 115–232 ef- fective 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. § 3307. Preference for commercial products and commercial services (a) RELATIONSHIP OF PROVISIONS OF LAW TO PROCUREMENT OF COMMERCIAL PRODUCTS AND COMMERCIAL SERVICES.— (1) THIS DIVISION.—Unless otherwise specifi- cally provided, all other provisions in this di- vision also apply to the procurement of com- mercial products and commercial services. (2) LAWS LISTED IN FEDERAL ACQUISITION REG- ULATION.—A contract for the procurement of a commercial product or commercial service en- tered into by the head of an executive agency is not subject to a law properly listed in the Federal Acquisition Regulation pursuant to section 1906 of this title. (b) PREFERENCE.—The head of each executive agency shall ensure that, to the maximum ex- tent practicable— (1) requirements of the executive 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) those requirements are defined so that commercial services or commercial products or, to the extent that commercial products suitable to meet the executive agency’s needs are not available, nondevelopmental items other than commercial products may be pro- cured to fulfill those requirements; and (3) offerors of commercial services, commer- cial products, and nondevelopmental items other than commercial products are provided an opportunity to compete in any procure- ment to fill those requirements. (c) IMPLEMENTATION.—The head of each execu- tive agency shall ensure that procurement offi- cials in that executive agency, to the maximum extent practicable— (1) acquire commercial services or commer- cial products or nondevelopmental items other than commercial products to meet the needs of the executive agency; (2) require that prime contractors and sub- contractors at all levels under contracts of the executive agency incorporate commercial services or commercial products or non- developmental items other than commercial products as components of items supplied to the executive 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 executive 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 executive agency’s needs are not available, nondevelopmental items other than commercial products in response to the executive agency solicitations; (5) revise the executive agency’s procure- ment 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 com- mercial services; and (6) require training of appropriate personnel in the acquisition of commercial products and commercial services. (d) MARKET RESEARCH.— (1) WHEN TO BE USED.—The head of an execu- tive agency shall conduct market research ap- propriate to the circumstances— (A) before developing new specifications for a procurement by that executive agency; and (B) before soliciting bids or proposals for a contract in excess of the simplified acquisi- tion threshold. (2) USE OF RESULTS.—The head of an execu- tive agency shall use the results of market re- search to determine whether commercial serv- ices or commercial products or, to the extent that commercial products suitable to meet the executive agency’s needs are not available, nondevelopmental items other than commer- cial products are available that— (A) meet the executive agency’s require- ments; Page 97 TITLE 41—PUBLIC CONTRACTS § 3307 (B) could be modified to meet the execu- tive agency’s requirements; or (C) could meet the executive agency’s re- quirements if those requirements were modi- fied to a reasonable extent. (3) ONLY MINIMUM INFORMATION REQUIRED TO BE SUBMITTED.—In conducting market re- search, the head of an executive agency should not require potential sources to submit more than the minimum information that is nec- essary to make the determinations required in paragraph (2). (4) DOCUMENTATION.—The head of the agency shall document the results of market research in a manner appropriate to the size and com- plexity of the acquisition. (e) REGULATIONS.— (1) IN GENERAL.—The Federal Acquisition Regulation shall provide regulations to imple- ment this section, sections 102, 103, 103a, 104, 105, and 110 of this title, and chapter 247 of title 10. (2) CONTRACT CLAUSES.— (A) DEFINITION.—In this paragraph, the term ‘‘subcontract’’ includes a transfer of commercial products or commercial services between divisions, subsidiaries, or affiliates of a contractor or subcontractor. (B) LIST OF CLAUSES TO BE INCLUDED.—The regulations prescribed under paragraph (1) shall contain a list of contract clauses to be included in contracts for the acquisition of end items that are commercial products. To the maximum extent practicable, the list shall include only those contract clauses that are— (i) required to implement provisions of law or executive orders applicable to ac- quisitions of commercial products, com- mercial components, or commercial serv- ices; or (ii) determined to be consistent with standard commercial practice. (C) REQUIREMENTS OF PRIME CONTRACTOR.— The regulations shall provide that the Fed- eral Government shall not require a prime contractor to apply to any of its divisions, subsidiaries, affiliates, subcontractors, or suppliers that are furnishing commercial products or commercial services any con- tract clause except those that are— (i) required to implement provisions of law or executive orders applicable to sub- contractors furnishing commercial prod- ucts, commercial components, or commer- cial services; or (ii) determined to be consistent with standard commercial practice. (D) CLAUSES THAT MAY BE USED IN A CON- TRACT.—To the maximum extent prac- ticable, only the contract clauses listed pur- suant to subparagraph (B) may be used in a contract, and only the contract clauses re- ferred to in subparagraph (C) may be re- quired to be used in a subcontract, for the acquisition of commercial products, com- mercial components, or commercial services by or for an executive agency. (E) WAIVER OF CONTRACT CLAUSES.—The Federal Acquisition Regulation shall provide standards and procedures for waiving the use of contract clauses required pursuant to sub- paragraph (B), other than those required by law, including standards for determining the cases in which a waiver is appropriate. (3) MARKET ACCEPTANCE.— (A) REQUIREMENT OF OFFERORS.—The Fed- eral Acquisition Regulation shall provide that under appropriate conditions the head of an executive agency may require offerors to demonstrate that the items offered— (i) have achieved commercial market ac- ceptance or been satisfactorily supplied to an executive agency under current or re- cent contracts for the same or similar re- quirements; and (ii) otherwise meet the item description, specifications, or other criteria prescribed in the public notice and solicitation relat- ing to the contract. (B) REGULATION TO PROVIDE GUIDANCE ON CRITERIA.—The Federal Acquisition Regula- tion shall provide guidance to ensure that the criteria for determining commercial market acceptance include the consideration of— (i) the minimum needs of the executive agency concerned; and (ii) the entire relevant commercial mar- ket, including small businesses. (4) PROVISIONS RELATING TO TYPES OF CON- TRACTS.— (A) TYPES OF CONTRACTS THAT MAY BE USED.—The Federal Acquisition Regulation shall include, for acquisitions of commercial products or commercial services— (i) a requirement that firm, fixed price contracts or fixed price with economic price adjustment contracts be used to the maximum extent practicable; (ii) a prohibition on use of cost type con- tracts; and (iii) subject to subparagraph (B), author- ity for use of a time-and-materials or labor-hour contract for the procurement of commercial services that are commonly sold to the general public through those contracts and are purchased by the pro- curing agency on a competitive basis. (B) WHEN TIME-AND-MATERIALS OR LABOR- HOUR CONTRACT MAY BE USED.—A time-and- materials or labor-hour contract may be used pursuant to the authority referred to in subparagraph (A)(iii)— (i) only for a procurement of commercial services in a category of commercial serv- ices described in subparagraph (C); and (ii) only if the contracting officer for the procurement— (I) executes a determination and find- ings that no other contract type is suit- able; (II) includes in the contract a ceiling price that the contractor exceeds at its own risk; and (III) authorizes a subsequent change in the ceiling price only on a determina- tion, documented in the contract file, that it is in the best interest of the pro- Page 98 TITLE 41—PUBLIC CONTRACTS § 3307 curing agency to change the ceiling price. (C) CATEGORIES OF COMMERCIAL SERVICES.— The categories of commercial services re- ferred to in subparagraph (B) are as follows: (i) Commercial services procured for sup- port of a commercial product, as described in section 103a(1) of this title. (ii) Any other category of commercial services that the Administrator for Fed- eral Procurement Policy designates in the Federal Acquisition Regulation for the purposes of this subparagraph on the basis that— (I) the commercial services in the cat- egory are of a type of commercial serv- ices that are commonly sold to the gen- eral public through use of time-and-ma- terials or labor-hour contracts; and (II) it would be in the best interests of the Federal Government to authorize use of time-and-materials or labor-hour con- tracts for purchases of the commercial services in the category. (5) CONTRACT QUALITY REQUIREMENTS.—Regu- lations prescribed under paragraph (1) shall in- clude provisions that— (A) allow, to the maximum extent prac- ticable, a contractor under a commercial products acquisition to use the existing quality assurance system of the contractor as a substitute for compliance with an other- wise applicable requirement for the Federal Government to inspect or test the commer- cial products before the contractor’s tender of those products for acceptance by the Fed- eral Government; (B) require that, to the maximum extent practicable, the executive agency take ad- vantage of warranties (including extended warranties) offered by offerors of commer- cial products and use those warranties for the repair and replacement of commercial products; and (C) set forth guidance regarding the use of past performance of commercial products and sources as a factor in contract award de- cisions. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3754; Pub. L. 115–232, div. A, title VIII, § 836(b)(10)(A), (B)(i), Aug. 13, 2018, 132 Stat. 1861–1863; Pub. L. 116–92, div. A, title VIII, § 818(b), Dec. 20, 2019, 133 Stat. 1488; Pub. L. 117–81, div. A, title XVII, § 1702(h)(13), Dec. 27, 2021, 135 Stat. 2158.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3307(a) ........ 41:264. June 30, 1949, ch. 288, title III, §§ 314, 314B, as added Pub. L. 103–355, title VIII, §§ 8201, 8203, Oct. 13, 1994, 108 Stat. 3394. 3307(b) ........ 41:264b(a). 3307(c) ........ 41:264b(b). 3307(d) ........ 41:264b(c). 3307(e) ........ 41:264 note. Pub. L. 103–355, title VIII, § 8002, Oct. 13, 1994, 108 Stat. 3386; Pub. L. 108–136, title XIV, 1432, Nov. 24, 2003, 117 Stat. 1672. Subsection (a)(1) is substituted for 41 U.S.C. 264(a) for clarity. In subsection (e), the text of section 8002(f) of the Federal Acquisition Streamlining Act of 1994 (Public Law 103–355, 41 U.S.C. 264 note) is omitted as obsolete. In subsection (e)(2)(B)(i) and (C)(i), the words ‘‘as the case may be’’ are omitted as unnecessary. Editorial Notes AMENDMENTS 2021—Subsec. (e)(1). Pub. L. 117–81 substituted ‘‘chap- ter 247’’ for ‘‘chapter 140’’. 2019—Subsec. (d)(4). Pub. L. 116–92 added par. (4). 2018—Pub. L. 115–232, § 836(b)(10)(B)(i), substituted ‘‘Preference for commercial products and commercial services’’ for ‘‘Preference for commercial items’’ in sec- tion catchline. Subsec. (a). Pub. L. 115–232, § 836(b)(10)(A)(i)(I), sub- stituted ‘‘Commercial Products and Commercial Serv- ices’’ for ‘‘Commercial Items’’ in heading. Subsec. (a)(1). Pub. L. 115–232, § 836(b)(10)(A)(i)(II), substituted ‘‘commercial products and commercial services’’ for ‘‘commercial items’’. Subsec. (a)(2). Pub. L. 115–232, § 836(b)(10)(A)(i)(III), substituted ‘‘a commercial product or commercial serv- ice’’ for ‘‘a commercial item’’. Subsec. (b)(2). Pub. L. 115–232, § 836(b)(10)(A)(ii)(I), substituted ‘‘commercial services or commercial prod- ucts or, to the extent that commercial products suit- able to meet the executive agency’s needs are not available, nondevelopmental items other than commer- cial products’’ for ‘‘commercial items or, to the extent that commercial items suitable to meet the executive agency’s needs are not available, nondevelopmental items other than commercial items’’. Subsec. (b)(3). Pub. L. 115–232, § 836(b)(10)(A)(ii)(II), substituted ‘‘commercial services, commercial prod- ucts, and nondevelopmental items other than commer- cial products’’ for ‘‘commercial items and nondevelop- mental items other than commercial items’’. Subsec. (c)(1), (2). Pub. L. 115–232, § 836(b)(10)(A)(iii)(I), substituted ‘‘commercial services or commercial prod- ucts or nondevelopmental items other than commercial products’’ for ‘‘commercial items or nondevelopmental items other than commercial items’’. Subsec. (c)(3), (4). Pub. L. 115–232, § 836(b)(10)(A)(iii)(II), substituted ‘‘commercial services or commercial products or, to the extent that commer- cial products suitable to meet the executive 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 executive agency’s needs are not available, non- developmental items other than commercial items’’. Subsec. (c)(5), (6). Pub. L. 115–232, § 836(b)(10)(A)(iii)(III), substituted ‘‘commercial prod- ucts and commercial services’’ for ‘‘commercial items’’. Subsec. (d)(2). Pub. L. 115–232, § 836(b)(10)(A)(iv), in in- troductory provisions, substituted ‘‘commercial serv- ices or commercial products or, to the extent that com- mercial products suitable to meet the executive agen- cy’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 executive agency’s needs are not available, nondevelopmental items other than commercial items’’. Subsec. (e)(1). Pub. L. 115–232, § 836(b)(10)(A)(v)(I), in- serted ‘‘103a, 104,’’ after ‘‘sections 102, 103,’’. Subsec. (e)(2)(A). Pub. L. 115–232, § 836(b)(10)(A)(v)(II), substituted ‘‘commercial products or commercial serv- ices’’ for ‘‘commercial items’’. Subsec. (e)(2)(B). Pub. L. 115–232, § 836(b)(10)(A)(v)(III), (IV), in introductory provisions, substituted ‘‘end items that are commercial products’’ for ‘‘commercial end items’’ and, in cl. (i), substituted ‘‘commercial prod- ucts, commercial components, or commercial services’’ for ‘‘commercial items or commercial components’’. Subsec. (e)(2)(C). Pub. L. 115–232, § 836(b)(10)(A)(v)(IV), (V), in introductory provisions, substituted ‘‘commer- Page 99 TITLE 41—PUBLIC CONTRACTS § 3309 cial products or commercial services’’ for ‘‘commercial items’’ and, in cl. (i), substituted ‘‘commercial prod- ucts, commercial components, or commercial services’’ for ‘‘commercial items or commercial components’’. Subsec. (e)(2)(D). Pub. L. 115–232, § 836(b)(10)(A)(v)(IV), substituted ‘‘commercial products, commercial compo- nents, or commercial services’’ for ‘‘commercial items or commercial components’’. Subsec. (e)(4)(A). Pub. L. 115–232, § 836(b)(10)(A)(v)(VI), substituted ‘‘commercial products or commercial serv- ices’’ for ‘‘commercial items’’ in introductory provi- sions. Subsec. (e)(4)(C)(i). Pub. L. 115–232, § 836(b)(10)(A)(v)(VII), substituted ‘‘commercial product, as described in section 103a(1)’’ for ‘‘commercial item, as described in section 103(5)’’. Subsec. (e)(5). Pub. L. 115–232, § 836(b)(10)(A)(v)(VIII), substituted ‘‘products’’ for ‘‘items’’ wherever appear- ing. Statutory Notes and Related Subsidiaries 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 Amend- ment; Savings Provision note under section 453b of Title 6, Domestic Security. § 3308. Planning for future competition in con- tracts for major systems (a) DEVELOPMENT CONTRACT.— (1) DETERMINING WHETHER PROPOSALS ARE NECESSARY.—In preparing a solicitation for the award of a development contract for a major system, the head of an agency shall consider requiring in the solicitation that an offeror in- clude in its offer proposals described in para- graph (2). In determining whether to require the proposals, the head of the agency shall consider the purposes for which the system is being procured and the technology necessary to meet the system’s required capabilities. If the proposals are required, the head of the agency shall consider them in evaluating the offeror’s price. (2) CONTENTS OF PROPOSALS.—The proposals that the head of an agency is to consider re- quiring in a solicitation for the award of a de- velopment contract are the following: (A) Proposals to incorporate in the design of the major system items that are currently available within the supply system of the Federal agency responsible for the major system, available elsewhere in the national supply system, or commercially available from more than one source. (B) With respect to items that are likely to be required in substantial quantities dur- ing the system’s service life, proposals to in- corporate in the design of the major system items that the Federal Government will be able to acquire competitively in the future. (b) PRODUCTION CONTRACT.— (1) DETERMINING WHETHER PROPOSALS ARE NECESSARY.—In preparing a solicitation for the award of a production contract for a major system, the head of an agency shall consider requiring in the solicitation that an offeror in- clude in its offer proposals described in para- graph (2). In determining whether to require the proposals, the head of the agency shall consider the purposes for which the system is being procured and the technology necessary to meet the system’s required capabilities. If the proposals are required, the head of the agency shall consider them in evaluating the offeror’s price. (2) CONTENT OF PROPOSALS.—The proposals that the head of an agency is to consider re- quiring in a solicitation for the award of a pro- duction contract are proposals identifying op- portunities to ensure that the Federal Govern- ment will be able to obtain on a competitive basis items procured in connection with the system that are likely to be reprocured in sub- stantial quantities during the service life of the system. Proposals submitted in response to this requirement may include the following: (A) Proposals to provide to the Federal Government the right to use technical data to be provided under the contract for com- petitive reprocurement of the item, together with the cost to the Federal Government of acquiring the data and the right to use the data. (B) Proposals for the qualification or de- velopment of multiple sources of supply for the item. (c) CONSIDERATION OF FACTORS AS OBJECTIVES IN NEGOTIATIONS.—If the head of an agency is making a noncompetitive award of a develop- ment contract or a production contract for a major system, the factors specified in sub- sections (a) and (b) to be considered in evalu- ating an offer for a contract may be considered as objectives in negotiating the contract to be awarded. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3758.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3308 ............ 41:253b(j). June 30, 1949, ch. 288, title III, § 303B(j), formerly § 303B(f), as added Pub. L. 98–577, title II, § 201(a), Oct. 30, 1984, 98 Stat. 3068; redesignated as § 303B(g), Pub. L. 103–355, title I, § 1064(1), Oct. 13, 1994, 108 Stat. 3268; redesignated as § 303B(j), Pub. L. 104–106, title XLI, § 4104(b)(2), Feb. 10, 1996, 110 Stat. 645. § 3309. Design-build selection procedures (a) AUTHORIZATION.—Unless the traditional ac- quisition approach of design-bid-build estab- lished under sections 1101 to 1104 of title 40 or another acquisition procedure authorized by law is used, the head of an executive agency shall use the two-phase selection procedures author- ized in this section for entering into a contract for the design and construction of a public build- ing, facility, or work when a determination is made under subsection (b) that the procedures are appropriate for use. (b) CRITERIA FOR USE.—A contracting officer shall make a determination whether two-phase selection procedures are appropriate for use for entering into a contract for the design and con- struction of a public building, facility, or work when— (1) the contracting officer anticipates that 3 or more offers will be received for the con- tract;