The Revolutionary Federal Acquisition Regulation (FAR) Overhaul (RFO) continues, with rewrites to FAR Parts 4, 8, 12, and 40 issued August 14, 2025. For our previous alerts on the RFO, see here and here. This alert focuses on the FAR Part 12 rewrite: Acquisition of Commercial Products and Commercial Services. Commercial acquisitions look to be a priority for the federal government, and the Part 12 rewrite provides guidance to streamline commercial procurements while also lessening compliance requirements for contractors.
Federal law requires the federal government acquire commercial products and commercial services to the maximum extent practicable. 10 U.S.C. § 3453(b). Although the law is not new, experience has shown the federal government may not always buy commercial products and services even when they are available. Notably, no fewer than three Executive Orders this year have directed federal agencies to maximize commercial procedures for their procurements. See Executive Order 14271, Ensuring Commercial, Cost-Effective Solutions in Federal Contracts (Apr. 15, 2025); Executive Order 14265, Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base (Apr. 15, 2025); Executive Order 14275, Restoring Common Sense to Federal Procurement (Apr. 18, 2025). The FAR Part 12 rewrite furthers this direction, as it states that agencies “must acquire commercial products and services” when they are available. Contractors therefore should understand if what they sell is in fact commercial.
What Is a Commercial Product or Commercial Service?
FAR 2.101 defines commercial products and services, and the Part 12 rewrite does not change those definitions (other than including construction within the definition of services). Generally, commercial products are products “of a type customarily used by” and that have been sold or offered for sale to the general public. They include products with minor modifications to meet federal government requirements. Importantly, commercially-available-off-the-shelf, or COTS, products are still a subset of commercial products. In other words, all COTS products are commercial, but not all commercial products are COTS. Commercial services generally are services “of a type offered and sold competitively in substantial quantities in the commercial marketplace based on established catalog” prices.
What’s New in FAR Part 12?
Overall, the rewrite cut almost a third of the original Part 12’s text and significantly changed its structure. It is now organized according to the acquisition timeline, with sections for pre-solicitation, solicitation/evaluation/award, and post-award guidance. It also added the simplified acquisition procedures previously found in FAR Part 13, making clearer to government agencies when to simplify commercial products and services purchases. Moreover, it deleted the clauses at FAR 52.212-3 and FAR 52.212-5, thus eliminating a substantial number of provisions and clauses contractors have had to review and ensure compliance with.
Streamlining Commercial Acquisitions
The FAR Part 12 rewrite notes it seeks to streamline commercial acquisitions. To do so, the rewrite directs all commercial acquisitions to use mandatory sources identified in FAR Part 8, such as governmentwide acquisition contracts and the GSA schedule. (For contractors not on the GSA schedule, now may be appropriate to consider if applying is a prudent business strategy.) If no mandatory source is available, the value of the procurement determines which procedures to use.
For acquisitions valued over $7.5 million, agencies are to issue request for proposals, use past performance as an evaluation criterion, and offer debriefings to unsuccessful offerors.
For acquisitions valued less than $7.5 million agencies are now to use the simplified acquisition procedures which had previously been in FAR Part 13. Prior to the rewrite, agencies often relied on more complex acquisition processes for smaller-dollar commercial purchases. As a result of the rewrite, agencies will now issue a request for quotations and place a purchase order (PO) in response to a vendor’s non-binding quotation. Thus, no contract exists unless and until the vendor accepts the government’s PO.
Additionally, agencies can directly solicit three sources, and are not required to have evaluation plans, score quotations, or establish a competitive range before communicating with quoters or soliciting revised quotations. Agencies also now can, based on the exercise of “good business judgement,” accept untimely submitted quotations, and offer explanations rather than a debriefing to unsuccessful offerors.
While commercial procurements over $7.5 million may follow a “traditional” procurement process, the simplified acquisition procedures, now more clearly applicable to commercial procurements less than $7.5 million, should reduce timelines, paperwork, and other administrative burdens contractors may have experienced previously.
No More FAR 52.212-3 and FAR 52.212-5
Two additional changes that should further reduce administrative burdens for all commercial procurements regardless of value are the deletion of 52.212-3 and 52.212-5. FAR 52.212-3 set forth more than 20 representations and certifications offerors had to make if they had not completed annual representations and certifications at www.sam.gov. FAR 52.212-5 listed more than 60 potential clauses that implemented federal law or policy to be included in commercial procurements. The rewrite recognized these “foundational ‘master’ clauses” are no longer necessary since the applicable references in them duplicate other requirements. Contractors’ reviews of their commercial contracts with the federal government should therefore be less time-consuming.
No More Clauses Than Necessary
The FAR Part 12 rewrite also establishes clear requirements as to which provisions and clauses are to be included in commercial contracts—and which are not. In addition to FAR 52.212-4, which lists such common commercial terms as payment, limitation of liability, delays, warranties, and invoicing, the rewrite added new Tables 12-2, 12-3, and 12-4 to identify the universe of potential provisions and clauses for commercial acquisitions. This is important because commercial contracts have been known from time to time to include dozens of clauses that had no commercial application. Contractors had to review pages of arguably inapplicable text and make decisions on what risk to accept or what to push back on. Not only does the new FAR Part 12 set out fewer potential provisions and clauses in tables, but it also added the explicit instruction to the government to “not include other provisions or clauses in solicitation[s] or contract[s] for commercial products or commercial services” without an approved deviation. This instruction should provide a welcome change and should result in shorter commercial contracts.
An Observation About Commercial Computer Software Licenses
The rewrite at FAR 12.107 does not substantively change the original language at FAR 12.212 for commercial software purchases, for which the government “must” acquire “commercial licenses customarily provided to the public to the extent such licenses are consistent with Federal law and otherwise satisfy the Government’s needs.” Software vendors should not assume that their commercial computer software license agreement becomes part of the contract automatically. Instead, they should remind their government buyer to incorporate the license agreement in accordance with the FAR. While the license agreement may need to be modified so as not to violate federal law (commonly through a government addendum), software vendors still should be able to have most of their preferred terms included. Without incorporating the license agreement, however, software vendors may be awarded contracts subject to the government’s terms only.
Another Practitioner Album
Finally, a Practitioner Album consists of a high-level summary of the changes to FAR Part 12, a line out version of the original Part 12, and several smart “accelerators.” The accelerators include a video presentation from the U.S. Department of Homeland Security’s Procurement Innovation Lab about the changes, and includes a use case of an actual commercial procurement under $7.5 million the presenters believe could have been done more efficiently under the rewritten Part 12. Contractors may be able to leverage some of this content to help streamline their sales of commercial products and services. Another accelerator discusses the benefits of commercial acquisition procedures, as well as how to ensure an acquisition is “truly commercial,” particularly when modifications of or customization to a commercial product is required. Lastly, an Internal Revenue Service use case shows how commercial acquisitions can be used to procure technology development services.
The FAR Part 12 rewrite appears to be significant with the potential to make contractors’ commercial sales to the government more efficient while also reducing their compliance burdens. In light of the statutory preference for commercial acquisitions and multiple executive orders emphasizing the same, contractors would be well-served to ensure their products and services are commercial so as to benefit from the improved FAR Part 12.
