Developments in Commercial Item Procurement

Recent legal developments include promising indications that Government agencies could increase the use of commercial item acquisitions during the coming year.  In particular, the U.S. Court of Federal Claims decision in Palantir Technologies and several provisions in the National Defense Authorization Act (NDAA) for Fiscal Year 2017 encourage Contracting Officers to utilize commercial item procurement procedures more often and more effectively.  In Palantir Technologies, the court held the contracting agency to the legal requirements for use of commercial items when such items meet the Government’s needs, and the court emphasized the agency’s obligation to conduct sufficient market research when determining whether suitable commercial items are available.  In a similar vein, the NDAA’s provisions dedicated to commercial item acquisition include new and clarifying legislation that will further encourage commercial item procurement, including a mandate for DOD to maintain its Centers of Excellence dedicated to centralized market research, commerciality determinations, and determinations of price reasonableness for commercial items.