TITLE IV - ACQUISITIONS OF COMMERCIAL ITEMS

Section 401 - Additional Incentive for Use of Performance-Based Contracting for Services.

This section amends section 41 of the Office of Federal Procurement Policy Act (41 U.S.C. 41 to add a new subsection that would provide that a performance-based service contract or task order may be treated as a contract for a commercial item if it defines tasks to be performed in measurable, mission related terms, identifies specific products or outputs and the source provides similar services to the public under similar terms to those offered the Government. This authorizes the use of special simplified procedures provided in the Federal Acquisition Regulation for commercial items if the performance-based contract or task order is valued at $5,000,000 or less and applies to those contracts the current waivers of requirements and certifications applicable to contracts for commercial items. Finally, this section requires the administrator for Federal Procurement Policy to establish a center of excellence for service contracting to assist the acquisition community in identifying best practices in service contracting.

Section 402 - Authorization of Additional Commercial Contract Types.

This section provides that section 8002(d) of the Federal Acquisition Streamlining Act of 1994 (Public Law 103-355; 41 U.S.C. 264 note) be amended to provide that the Federal Acquisition Regulation (FAR) include a provision such that time-and-material and labor-hour contracts can be used for commercial services that are commonly sold to the general public through such contracts. Time-and-material and labor-hour contracts are treated in the current Part 16 of the FAR as a separate contract type, as are fixed-price contracts and cost-reimbursement contracts. While section 8002(d) provides that the FAR is to prohibit the use of cost-type contracts for commercial items, there is no comparable prohibition applicable to time-and-material and labor-hour contracts. Section 402 makes clear that, under the appropriate circumstances, time-and-material and labor-hour contracts should be specifically authorized by the FAR for commercial services.

Section 403 - Clarification of Commercial Services Definition.

The section amends section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403 (12)) to clarify the definition of commercial item to place commercial services on an equal level with supplies in Federal acquisitions.