FAR 12.213—Other commercial practices.
Plain-English Summary
FAR 12.213 explains how contracting officers should handle commercial-item acquisitions when the standard commercial terms in FAR Part 12 do not fully fit the market. It addresses the common commercial practice of buyers and sellers each proposing their own terms and conditions, the fact that the Part 12 clauses are intended to balance those interests, and the role of market research in identifying other commercial practices that may be more suitable for a particular acquisition. The section gives contracting officers discretion to incorporate those other practices into the solicitation and contract when doing so will help reach a business arrangement satisfactory to both parties. At the same time, it limits that discretion by requiring that any added practice not be prohibited by law or Executive order. In practice, this provision is a reminder that commercial acquisitions should reflect real market norms where appropriate, rather than forcing a one-size-fits-all government approach.
Key Rules
Commercial terms are negotiated from both sides
The section recognizes that in the commercial marketplace, buyers and sellers often propose terms and conditions from their own perspectives. FAR Part 12 terms are designed to balance those interests rather than mirror only government preferences.
Part 12 terms are generally suitable
The prescribed commercial-item terms and conditions are intended to work for a broad range of acquisitions. Contracting officers should start with those terms as the default framework for commercial buys.
Market research may justify alternatives
If market research shows that other commercial practices are common or appropriate for the item being acquired, the contracting officer should consider using them. The point is to align the contract with actual market practice when that improves the acquisition.
Use alternatives only if appropriate
Any other commercial practice should be incorporated only when the contracting officer determines it is appropriate to achieve a business arrangement satisfactory to both parties. This is a judgment call, not an automatic requirement.
No conflict with law or Executive order
Even if a commercial practice is common in the marketplace, it cannot be used if it is otherwise prohibited by statute or Executive order. Legal compliance remains a hard limit on the contracting officer’s discretion.
Responsibilities
Contracting Officer
Conduct market research, identify relevant commercial practices, and decide whether incorporating those practices into the solicitation and contract is appropriate. Ensure any selected practice supports a satisfactory business arrangement and does not conflict with law or Executive order.
Agency
Support acquisition planning and market research so the contracting officer can understand commercial norms for the item or service being acquired. Ensure internal policies and approvals do not override the flexibility allowed by Part 12 without a valid legal or policy basis.
Contractor/Seller
Propose commercial terms and conditions that reflect its marketplace practices and business model. Provide information during market research or negotiations that helps the government understand customary commercial terms for the item.
Buyer/Customer Activity
Communicate operational needs and any special performance or risk concerns so the contracting officer can judge whether standard Part 12 terms or other commercial practices better fit the acquisition.
Practical Implications
This section gives contracting officers flexibility, but only after real market research shows that a different commercial practice makes sense for the specific acquisition.
A common pitfall is assuming all commercial practices are acceptable simply because they are common in the private sector; legal and Executive order restrictions still control.
Another risk is over-customizing the solicitation and contract, which can undermine the commercial-item approach and create unnecessary negotiation or compliance burden.
Contractors should be prepared to explain why their standard terms are commercially customary and how they support a workable deal for both sides.
In day-to-day use, the section encourages a practical, market-based negotiation approach: start with Part 12, compare it to actual industry practice, and adopt alternatives only when they improve the acquisition and remain legally permissible.
Official Regulatory Text
It is a common practice in the commercial marketplace for both the buyer and seller to propose terms and conditions written from their particular perspectives. The terms and conditions prescribed in this part seek to balance the interests of both the buyer and seller. These terms and conditions are generally appropriate for use in a wide range of acquisitions. However, market research may indicate other commercial practices that are appropriate for the acquisition of the particular item. These practices should be considered for incorporation into the solicitation and contract if the contracting officer determines them appropriate in concluding a business arrangement satisfactory to both parties and not otherwise precluded by law or Executive order.