Commercial Item

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Contractors interested in offering federal agencies artificial intelligence (AI) can now glean insight into how agencies are expected to conduct AI acquisitions. On September 24, 2024, the Office of Management and Budget (OMB) issued Memorandum M-24-18, Advancing the Responsible Acquisition of Artificial Intelligence in Government (the Memorandum), providing guidance and directing agencies “to improve their capacity for the responsible acquisition of AI” systems or services, including subcomponents. The Memorandum builds on the White House’s Executive Order 14110, Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, and OMB Memorandum M-24-10, Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence. Taking effect on March 23, 2025, M-24-18 will apply to all solicitations and contract option exercises for AI systems covered under the Memorandum.Continue Reading OMB Issues Guidance to Agencies on Responsible Artificial Intelligence Acquisitions

In Percipient.ai v. United States, the US Court of Appeals for the Federal Circuit may have triggered a legal “Big Bang” moment in government procurement law. The case centered on whether the Federal Acquisition Streamlining Act’s (FASA) “task order bar” could suppress claims alleging violations of 10 U.S.C. § 3453, which mandates a preference for commercial products. The Panel’s interpretation of the Tucker Act’s definition of “interested party” expanded the universe of standing, allowing prospective subcontractors to exert gravitational influence in legal challenges regardless of their role as indirect offerors. At the risk of offending real physicists, from a legal perspective, the Percipient.ai v. United States decision looks to expand a universe of legal scrutiny. Like the cosmic forces that shape galaxies, the Percipient.ai decision may shape the parameters of government contracting jurisdiction and procedural fairness in the procurement process.Continue Reading Big Bang?: The Federal Circuit, Percipient.ai, and Expanding Jurisdiction

A little-heralded change to the statutory definition of “commercial item” has now made its way to a proposed FAR rule, which will open up regulatory relief to a whole new class of government contractors – companies, both domestic and foreign, that regularly sell products developed at private expense to friendly foreign governments. With the December 12, 2017, passage of Section 847 of the National Defense Authorization Act of 2018, Pub. L. 115-91 (“2018 NDAA”), the statutory set of definitions for the term “commercial items” was amended. See 41 U.S.C. § 103. More specifically, Section 103(8), addressing “nondevelopmental items,” was broadened as follows:
Continue Reading New Proposed FAR Rule Makes Way for Broadening Commercial Item Status to Products Developed Exclusively for and Sold to Friendly Foreign Governments