The DoD Just Declared War on Non-Commercial Contracts! **New Rule Forces Program Managers to Prove There’s No Commercial Alternative**
BLUF: implementation process that mandates review and approval for non-commercial procurements valued at or above the Simplified Acquisition Threshold (SAT). Before releasing solicitations for non-commercial solutions, program managers and contracting officers must submit a Request for Approval (RFA). This RFA must include a rationale for pursuing a non-commercial solution and a market research report demonstrating efforts to find commercial options. An internal review and approval process is required, with a designated approval authority (the Senior Procurement Executive or their delegate) providing written approval or denial. The approval authority must assess the sufficiency of market research within 30 days. This process effectively creates a hurdle for non-commercial procurements, pushing acquisition teams to prioritize and thoroughly justify deviations from commercial solutions.
Key Themes:
The central theme of this guidance is the DoD's commitment to aligning with EO 14271, which mandates the "procure[ment of] commercially available products and services, including those that can be modified to fill agencies’ needs, to the maximum extent practicable." This represents a significant push towards leveraging commercial market innovations to meet DoD requirements while ensuring cost-effectiveness. A crucial underlying principle is the need for continuous market research to identify suitable commercial solutions. The guidance emphasizes the collaborative effort required from "Requiring activities, program managers, and contracting officers must work together to identify commercial solutions to fulfill DoD mission requirements." This highlights the shared responsibility in exploring and validating commercial options.
The guidance also acknowledges the continued necessity of using non-commercial products and services for certain unique warfighting missions. However, it strongly discourages misrepresenting non-commercial items as commercial solely to bypass established procedures. The document explicitly states, "in redoubling our willingness to identify and use of commercially available products and services it should not be about casting truly non-commercial products or services as “commercial” for the purpose of misapplying policies and procedures unique to the acquisition of commercial products and commercial services."
To manage and oversee the procurement of non-commercial solutions, the guidance establishes a formal review and approval process for non-commercial procurements valued at or above the Simplified Acquisition Threshold (SAT). This process requires thorough justification and documentation.
Most Important Facts:
Executive Order 14271: Issued on April 15, 2025, this EO is the driving force behind the new guidance, mandating the maximum practicable use of commercial solutions.
Increased Emphasis on Competition Advocates: The guidance reiterates the existing role of Competition Advocates in challenging restrictive requirements but emphasizes the need to "redouble our efforts to establish requirements in a way that avoids inadvertently disqualifying commercial solutions."
Market Research is Essential: The guidance stresses the importance of "continuous market research" to stay informed about commercial innovations.
Collaborative Approach: Identifying and using commercial solutions requires cooperation among "Requiring activities, program managers, and contracting officers."
Approval Process for Non-Commercial Procurements: A formal Request for Approval (RFA) process is established for non-commercial procurements at or above the SAT. This is a critical procedural change outlined in Section 5 of the attachment.
Delegation of Approval Authority: The Senior Procurement Executive (SPE) is the designated approval authority, but this authority can be delegated in writing to General Officers, Flag Officers, or members of the Senior Executive Service with the necessary acquisition expertise. The delegation can be "on a by-procurement basis or for all procurements in a given agency."
Review of Pending Actions (Section 4): By June 15, 2025, contracting officers must review pending FAR actions (solicitations, notices, etc.) for non-commercial products or services at or above the SAT. An application requesting approval to proceed with non-commercial procurement must be submitted for each relevant action.
Contents of the RFA: The RFA for non-commercial procurements must include:
A description of the proposed procurement.
Rationale for pursuing a Government-unique, custom-developed, or otherwise non-commercial product or service.
A detailed market research report, including price analysis, justifying the decision.
Exclusions from RFA Requirement: Catalogued items for spare and repair parts in support of fielded weapon systems may be excluded if military-unique requirements were previously documented in the provisioning process.
DCMA Commercial Item Group (CIG) Support: Program managers and contracting officers are encouraged to seek assistance from the DCMA CIG for market research and price analysis.
Internal Review Process: Agencies must establish an internal review and approval process for all non-commercial procurements. The approval authority provides written approval or denial.
Timing of RFA Review: The non-commercial procurement review should generally occur "no later than at the point in time when an acquisition strategy is presented for approval."
Individual or Class RFAs: RFAs can be developed on an individual basis or as a "class RFA" for similar procurements with essentially identical justification. Class RFAs require a specified expiration date.
Approval Authority Review Timeframe: Within 30 days of receiving an RFA, the approval authority must assess the RFA, including market research and price analysis, and provide recommendations. They may also seek input from OMB if necessary.
Reporting Requirements: DoD SPEs must submit an agency report to DPCAP by July 25, 2025, and annually thereafter, detailing their efforts to shift towards commercial products and services, key successes/challenges, and procurement data related to non-commercial submissions (approved, denied, revised to commercial). Appendix 1 provides the reporting template. Appendix 2 offers an optional data template for tracking RFAs.
Implications:
This guidance marks a significant shift in the DoD's procurement strategy, prioritizing commercial solutions. It places a greater burden on program managers and contracting officers to research and justify the need for non-commercial items thoroughly. The formal RFA process and reporting requirements aim to increase transparency and accountability in non-commercial procurements. The emphasis on collaboration and leveraging resources, such as the DCMA CIG, is crucial for successful implementation. Overall, the guidance aims to promote efficiency and cost-effectiveness by leveraging commercially available technologies and services wherever possible, while also acknowledging the need for custom solutions tailored to specific military requirements.
