Commercial Item Determinations

CGS has extensive experience related to commercial products and services contracting as well as compliance best practices.  Our firm assists clients with determining when an item meets the definition of “commercial item” and in making and defending this case to the government or the prime contractor. 

The commercial items designation provides many advantages for contractors.  Mainly, the contractor can avoid certified cost or pricing requirements.  As a result, the contractor does not have to provide detailed cost build-ups and justifications, which is often difficult to do.  Instead, the contractor only needs to provide examples of selling the same or similar item to other customers. 

This typically results in better margins for the company as commercial prices are based on what the market will bear rather than what the government will allow for a particular item.  Profit is often a heavily scrutinized area in dealing with the government, particularly when detailed cost data is provided. 

Using our expertise and experience, we help our clients achieve the following related to commercial pricing:

1. Identify Opportunities for Commercial Pricing – One of CGS’ ultimate goals is to lessen the burden for our clients.  One way to do that is to ensure that any items that can qualify as commercial items are treated as such.  CGS can help to identify new opportunities for commercial pricing in both existing and new contracts with the government.
2. Commercial Item (CI) Designation – We have a deep understanding of what products and/or services meet the government’s definition of a “commercial item” under FAR 2.101.  We understand the market research that needs to be performed, and we can provide successful strategies to document and provide assurance to the government.  We also use our proprietary templates to help make the case for the commercial item pricing.
3. Price Reasonableness – As part of the commercial item determination, the buyer (i.e., government or prime contractor) must also determine that the proposed price is fair and reasonable.  CGS had a collection of proprietary templates that we have developed over the years that we can leverage to prepare a detailed analysis that will effectively demonstrate price reasonableness.

We have worked with both large, prime contractors as well as small, subcontractors to identify, document and ultimately justify that an item and/or service does indeed meet the definition of commercial resulting in better margins and less administrative burdens for our clients. 

Please contact us today to learn how we can you to sell your goods and services using the commercial item exemption and pricing.