12.501
Applicability
FAR 12.501 ensures Subpart 12.5 applies to all commercial product and service acquisitions, prohibits pass-through arrangements without value addition, and treats 8(a) subcontractors as primes for compliance.
Overview
FAR 12.501 establishes the applicability of Subpart 12.5 to all contracts and subcontracts, at any tier, for the acquisition of commercial products or commercial services. It clarifies that the subpart's provisions do not allow for the waiver of legal requirements for subcontracts where the prime contractor is merely reselling or distributing another contractor's commercial products or services without adding value. This is to prevent the creation of contractual arrangements designed solely to facilitate government sales. Additionally, it specifies that subcontractors under the 8(a) Program (FAR Subpart 19.8) are considered prime contractors for the purposes of this subpart.
Key Rules
- Applicability to Commercial Acquisitions
- Applies to all contracts and subcontracts for commercial products or services, regardless of tier.
- No Waiver for Pass-Through Arrangements
- Legal provisions cannot be waived for subcontracts where the prime contractor is only reselling or distributing without adding value.
- 8(a) Subcontractor Status
- 8(a) subcontractors are treated as prime contractors under this subpart.
Responsibilities
- Contracting Officers: Ensure correct application of Subpart 12.5 to all relevant contracts and subcontracts, and prevent improper pass-through arrangements.
- Contractors: Must not structure contracts solely for government sales without adding value and must comply with all legal requirements.
- Agencies: Oversee compliance and proper classification of 8(a) subcontractors as primes for this subpart.
Practical Implications
- Ensures that commercial acquisition rules are applied broadly and consistently.
- Prevents abuse of contractual structures for government sales without value addition.
- Clarifies the status of 8(a) program participants, affecting compliance and reporting.