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Mock 2 questionsThe synopsis required by FAR 5.203 and the issuance of the solicitation can be combined into a
single document. Therefore, it is not necessary to publicize a separate synopsis 15 days before
the issuance of the solicitation.
ANSWER: Authority: FAR 12.603 - ANS-Describe how the synopsis process can be streamlined
when acquiring commercial items?
Firm-fixed-price contracts or fixed-price contracts with economic price adjustment are the norm.
Indefinite-delivery contracts may be used where the prices are established based on a
firm-fixed-price or fixed-price with economic price adjustment. Use of any other contract type is
prohibited. These contract types may be used in conjunction with an award fee and
performance or delivery. DFARS provides some limited exceptions for T&M (labor-hour)
contracts.
FAR 12.207 / DFARS 212.207 - ANS-When acquiring commercial items, what contract type(s)
are normally used? What type(s) are prohibited?
· Non-commercial item government financing:
o Performance-based payments - payment upon objective defined events accomplished
***Preferred method!!!
o Progress payments- Payments based on costs incurred or % complete by the contractor as
work is done. (Customary rates are 80% LB, 90% SB, and 95% SDB; need adequate
accounting system.) Progress payments no more than 80% on UCAs)
o Loan guarantees - Government co-signs for the contractor with private sources and shares
losses
o Advance payments - paid in advance for the purpose of making advances to subcontractors -
(least preferred!) (Requires agency approval, need adequate security, interest may be required,
may be in addition to progress/partial payments)
· Commercial Item financing:
(1) Normally the contractor's responsibility to obtain financing, but in rare circumstances,
government can provide financing if over $100K, the CO determines that it is appropriate to -
ANS-Name the methods of government financing available for commercial item financing and
for non-commercial item financing. Bonus points: give some characteristics of each method.
First, as a PCO, you will review the definition of a "commercial item" in FAR 2.101 to make sure
you fully understand what is required for an item to be determined commercial. Although there
are 8 aspects to the definition, the main consideration is whether the item has been sold or
offered to the general public for purposes other than governmental purposes (or
modifications/evolutions to those items). If it is not clear from reading the definition, you may
,need to interface with the contractor to see why it thinks the item is commercial and have them
provide backup documentation.
Next, since the acquisition is over $1 million, DFARS states that the PCO shall determine in
writing that the commercial definition has been met. This does not apply, however, if the
commercial item will be used to support defense or recovery from CBRN attacks (FAR
12.102(f)). In order to comply with the DFARS guidance, the AFMC MP lists e - ANS-You are
the Contracting Officer for a $5,000,000 acquisition for which the contractor has taken the
position that the product is commercial. You must now determine if you agree with this position.
What documentation would you need to complete for your contract file and what steps would
you take determining if you agree with the contractor's position of commerciality?
Commercial items are exempt from the requirement of certified cost or pricing data. However,
we must still determine reasonableness of the offered price. FAR 15.402 says that we shall
obtain other than certified cost or pricing data as necessary, in the following order of preference:
(1) No additional data from the offeror if price is based on adequate price competition,
(2) Data other than certified cost or pricing data, such as:
(A) Data related to prices, or
(B) Cost data to the extent necessary to determine a fair and reasonable.
Within (2)(A), there is a three step flow of retrieving the data:
First - Determine if information is available within the Government. Examples - prices from other
Government contracts, AFLCMC/PKF historical information, government independent cost
estimates, historical data from other government services or agencies, records within DCAA and
DCMA.
Second - Determine if information is - ANS-You are the Contracting Officer for a commercial
item acquisition. The Program Manager comes to your office and asks you to explain how a
commercial item is supported for reasonableness. You tell the PM that FAR has an order of
preference that involves three steps. Please explain what these three steps are and provide
examples of each step.
Not necessarily. The first thing I would do is caution OSI in jumping to conclusions based on
comparison with a commercial contract. For starters, since you've already awarded this one,
you likely accomplished extensive market research and made the determination that the price
you're paying is both fair and reasonable.
Next, I suspect that if there is a significant difference between the commercial contract and the
Government contract, the terms and conditions might be different. FAR Part 12 says that when
determining price reasonableness of commercial items, we must be aware of customary
commercial terms and conditions when pricing. Therefore, I would challenge OSI to consider all
aspects of the terms and conditions. For instance, is the period of performance for both
contracts the same? Are the deliverables exactly the same? Does one have accelerated
, delivery? Does one include labor whereas the other is parts only - ANS-You are the Contracting
Officer on a large aircraft program. The engine is provided to the Prime Contractor as GFE and
is purchased via a separate contract as a commercial item; engine spare parts (replenishment
spares) are also purchased as commercial items as they also meet the FAR definition of
commerciality. This morning you receive a call from the OSI informing you of an investigation
they are conducting regarding inconsistencies in billing for engine spare parts between your
contract and another commercial contract. OSI tells you that the Government's contract prices
are 5% higher than the "other" commercial customer they are using as a comparison. Do you
have a problem? What should you do?
FAR 12.207; DFARS 212.207
Firm-fixed-price contracts or fixed-price contracts with economic price adjustment are required
for purchasing commercial items. However, if commercial services are being acquired and
certain conditions are met, then a T&M or labor-hour contract may also be used. DFARS Part
212 places additional restrictions on those types of commercial service contracts.
Indefinite-delivery contracts may be used where the prices are established based on a
firm-fixed-price or fixed-price with economic price adjustment. - ANS-When acquiring
commercial items, what contract type(s) are normally used? What type(s) are prohibited?
FAR 2.101 (commercial items definition); FAR 12; FAR 15
Commercial item means:
(1) Any item, other than real property, that is of a type customarily used by the general public or
by non-governmental entities for purposes other than governmental purposes, and-
(i) Has been sold, leased, or licensed to the general public; or
(ii) Has been offered for sale, lease, or license to the general public;
(2) Any item that evolved from an item described in paragraph (1) of this definition through
advances in technology or performance and that is not yet available in the commercial
marketplace, but will be available in the commercial marketplace in time to satisfy the delivery
requirements under a Government solicitation;
(3) Any item that would satisfy a criterion expressed in paragraphs (1) or (2) of this definition,
but for-
(i) Modifications of a type customarily available in the commercial marketplace; or
(ii) Minor modifi - ANS-In response to a sole source solicitation for 150 portable SHF terminals,
Bridges and Daughters, Inc. (BDI) has submitted a proposal in which it has asserted that its
Model TX-4 Omni-Sat is a commercial item. BDI's proposal contains unit pricing information
$85K/unit (for a total price of $12.750M) however, no additional information was provided. In
conducting market research you have been unable to independently determine price
reasonableness from information within the Government or from sources other than BDI.
Discuss how you would determine whether the TX-4 Omni-Sat is a commercial item AND
whether the proposed price of $85K/unit is fair and reasonable.
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