Court wrestles with “commercial item” definition

  |  May 4, 2009

 One of the most helpful acquisition reforms in the 1990s involved “commercial items.” Congress concluded that, since we consumers can go to a hardware store and buy a hammer without the need for a long, detailed specification, why couldn’t the government do that as well? So Congress made it much easier for agencies to acquire something if it could be classified as a commercial item.

A recent CFC decision concluded that the government had properly classified something as a commercial item. The Army National Guard Bureau awarded a contract to Spika Welding and Manufacturing for helicopter maintenance platforms. An unsuccessful vendor, Precision Lift, Inc., filed a protest arguing that the platforms Spika offered were not actually commercial items, because Spika had not actually sold the platforms to the general public prior to the solicitation.

The government’s argument was that the platforms were commercial items
because they had previously been offered for sale to the general public. The court agreed with the government. First, the court considered whether they are of a type that fit the commercial item definition in FAR 2.101: a type customarily used by the general public. The court concluded that they were a standard nonpatented and nonproprietary maintenance platform design that had been in service for several years and are commonly used. As a practical matter, Precision Lift did not challenge this part of the definition.

The court went on to consider the next part of the definition: were the
platforms a type “offered for sale to the general public.” It had trouble with Precision Lift’s interpretation that the word “offer” was synonymous with “offers” in the solicitation context. The court agreed with the government’s interpretation that the platforms were commercial items, because they had previously been offered for sale to the general public. To the court, it was “obvious that Spika has certainly offered their platforms for sale to the general public. The administrative record details various advertising and marketing efforts, and even the original Spika proposal included standard product brochures.”

The court went on to add that “this is not to say that the statute is clear. The definition is broad, unclear, and will be interpreted as setting the ‘commercial item’ standard very low. If the Federal Acquisition Regulations are intended to use the term in a very limited way, its plain language does not communicate that intent.”

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