12.504 Applicability of certain laws to subcontracts for the acquisition of commercial products and commercial services
Source: FAR 12.504 on acquisition.gov
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.
(a) The following laws are not applicable to subcontracts at any tier for the acquisition of commercial products or commercial services at any tier:
(1) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section2631&num=0&edition=prelim" target="_blank">10 U.S.C. 2631, Transportation of Supplies by Sea (except for the types of subcontracts listed at 47.504(d)).
(2) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section644(d)&num=0&edition=prelim" target="_blank">15 U.S.C. 644(d), Requirements relative to labor surplus areas under the Small Business Act (see subpart 19.2).
(3) [Reserved]
(4) http://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title41-chapter65&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0MC1jaGFwdGVyMzctZnJvbnQ%3D%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim" target="_blank">41 U.S.C. chapter 65, Contracts for Materials, Supplies, Articles, and Equipment Exceeding $10,000 (see subpart 22.6).
(5) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section4703&num=0&edition=prelim" target="_blank">41 U.S.C. 4703, Validation of Proprietary Data restrictions (see subpart 27.4).
(6) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section3901(b)&num=0&edition=prelim" target="_blank">41 U.S.C. 3901(b) and https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section3321&num=0&edition=prelim" target="_blank">10 U.S.C. 3321(b), Contingent Fees (see subpart 3.4).
(7) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section4706(d)&num=0&edition=prelim" target="_blank">41 U.S.C. 4706(d) and https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section3841&num=0&edition=prelim" target="_blank">10 U.S.C. 3841(d), Examination of Records of Contractor, when a subcontractor is not required to provide certified cost or pricing data (see 15.209(b)), unless using funds appropriated or otherwise made available by the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5).
(8) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section1708(e)(3)&num=0&edition=prelim" target="_blank">41 U.S.C. 1708(e)(3), Minimum Response Time for Offers (see subpart 5.2).
(9) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section2302&num=0&edition=prelim" target="_blank">41 U.S.C. 2302, Rights in Technical Data (see subpart 27.4).
(10) http://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title41-chapter81&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0MC1jaGFwdGVyMzctZnJvbnQ%3D%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim" target="_blank">41 U.S.C. chapter 81, Drug-Free Workplace Act (see subpart 26.5).
(11) 46 U.S.C.App.1241(b), Transportation in American Vessels of Government Personnel and Certain Cargo (see subpart 47.5) (except for the types of subcontracts listed at 47.504(d)).
(12) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section40118&num=0&edition=prelim" target="_blank">49 U.S.C. 40118, Fly American provisions (see subpart 47.4).
(13) Section 806(a)(3) of Pub. L. 102-190, as amended by Sections 2091 and 8105 of Pub. L. 103-355 (https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section4601&num=0&edition=prelim" target="_blank">10 U.S.C. 4601 note prec.), Payment Protections for Subcontractors and Suppliers (see 28.106-6).
(b) The requirements for a certificate and clause under the Contract Work Hours and Safety Standards statute, http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title40-section37&num=0&edition=prelim" target="_blank">40 U.S.C. 37, (see subpart 22.3) are not applicable to subcontracts at any tier for the acquisition of commercial products or commercial services or commercial components.
(c) The applicability of the following laws has been modified in regard to subcontracts at any tier for the acquisition of commercial products or commercial services:
(1) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section4704&num=0&edition=prelim" target="_blank">41 U.S.C. 4704 and https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section4655&num=0&edition=prelim" target="_blank">10 U.S.C. 4655, Prohibition on Limiting Subcontractor Direct Sales to the United States (see subpart 3.5).
(2) http://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title41-chapter35&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0MC1jaGFwdGVyMzctZnJvbnQ%3D%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim" target="_blank">41 U.S.C. chapter 35, and http://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title10-chapter271&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0MC1jaGFwdGVyMzctZnJvbnQ%3D%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim" target="_blank">10 U.S.C. chapter 271, Truthful Cost or Pricing Data (see subpart 15.4).
(3) http://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title41-chapter15&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0MC1jaGFwdGVyMzctZnJvbnQ%3D%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim" target="_blank">41 U.S.C. chapter 15, Cost Accounting Standards (48 CFR Chapter 99) (see 12.214).