12.504
Applicability of certain laws to subcontracts for the acquisition of commercial products and commercial services
FAR 12.504 exempts or modifies many federal laws for subcontracts involving commercial products and services, reducing compliance burdens for contractors.
Overview
FAR 12.504 outlines which federal laws do not apply, or are modified in their application, to subcontracts for the acquisition of commercial products and commercial services. The section provides a list of statutes that are either inapplicable or have modified applicability to subcontracts at any tier, streamlining compliance requirements for commercial acquisitions. This helps reduce the regulatory burden on contractors and subcontractors when dealing with commercial items, aligning with the FAR’s goal of making commercial acquisitions more efficient and accessible.
Key Rules
- Inapplicable Laws
- Several statutes, such as those related to transportation by sea, labor surplus areas, proprietary data, contingent fees, examination of records, minimum response times, technical data rights, drug-free workplace, and payment protections, do not apply to subcontracts for commercial products or services (with some exceptions noted).
- Contract Work Hours and Safety Standards
- The requirements for certificates and clauses under this statute do not apply to subcontracts for commercial products, services, or components.
- Modified Applicability
- Certain laws, including those on limiting subcontractor direct sales, truthful cost or pricing data, and cost accounting standards, have modified applicability to these subcontracts.
Responsibilities
- Contracting Officers: Must ensure only applicable laws and clauses are flowed down to subcontracts for commercial products/services.
- Contractors: Should verify which laws and clauses apply to their subcontracts and avoid unnecessary flow-downs.
- Agencies: Oversee compliance and ensure streamlined acquisition processes for commercial items.
Practical Implications
- This section exists to reduce unnecessary regulatory requirements for commercial subcontracts, promoting efficiency and commercial best practices.
- Contractors must carefully review which laws are inapplicable or modified to avoid over-complying or misapplying clauses.
- Common pitfalls include mistakenly flowing down inapplicable clauses or failing to recognize exceptions and modifications.