12.503
Applicability of certain laws to Executive agency contracts for the acquisition of commercial products and commercial services
FAR 12.503 exempts or modifies the application of many federal laws for commercial product and service contracts, streamlining compliance and reducing administrative burdens for both agencies and contractors.
Overview
FAR 12.503 outlines which federal laws do not apply, only partially apply, or are modified in their application to Executive agency contracts for the acquisition of commercial products and commercial services. The section is designed to streamline the procurement process for commercial items by exempting these contracts from certain statutory requirements that typically apply to government contracts, thereby reducing administrative burden and promoting efficiency.
Key Rules
- Inapplicable Laws
- Lists specific statutes that do not apply to commercial product and service contracts, such as those related to ROTC access, veterans' employment reporting, minimum response times, personal conflicts of interest, contingent fees, GAO access, certain labor standards, drug-free workplace, payment protections for subcontractors, and change order notices.
- Partially Applicable Laws
- Identifies laws where only certain requirements are waived, such as certifications related to arms control, contract work hours and safety standards, anti-kickback clauses, and most provisions of the Fly America Act (with a noted exception for commercial services).
- Modified Applicability
- Specifies laws whose requirements are modified for commercial contracts, including those related to subcontractor direct sales, truthful cost or pricing data, and cost accounting standards.
Responsibilities
- Contracting Officers: Must ensure that solicitations and contracts for commercial products and services do not include clauses or requirements from the inapplicable or partially applicable statutes, and apply modified requirements as specified.
- Contractors: Should be aware that certain federal compliance obligations do not apply or are reduced for commercial contracts, but must still comply with applicable and modified requirements.
- Agencies: Must oversee that only the appropriate statutory and regulatory requirements are imposed on commercial item acquisitions.
Practical Implications
- This section exists to simplify and expedite the acquisition of commercial products and services by removing unnecessary regulatory burdens.
- Contractors benefit from reduced compliance requirements, but must still be vigilant about which laws and clauses remain applicable or are modified.
- Common pitfalls include mistakenly including or omitting clauses that are not required or are required in a modified form for commercial contracts.