On January 31, 2023, U.S. Department of Defense (DoD) issued a final rule to amend the DFARS to bifurcate the definition of “commercial item” into separate definitions for “commercial product” and “commercial service.” The new definitions implement Section 836 of the NDAA for FY 2019. DoD indicated that the final rule “provides clarity for the acquisition workforce by replacing all instances of ‘commercial item’ with ‘commercial product’ and/or ‘commercial service’, as appropriate…”

The January 31st DFARS final rule follows a November 4, 2021 final rule that amended the Federal Acquisition Regulation (“FAR”) 2.101 definition of commercial item. Amendments to the DFARS that are specified in the January 31st final rule reference the amended FAR 2.101 definitions of commercial product and commercial service. The November 4, 2021 final rule addressed concerns that the singular definition (i.e., commercial item) created inconsistent policy interpretations and confusion when identifying certain commercial products and services. It is also notable that the November 4, 2021 final rule stated that the new definitions will not expand or shrink the number of products or services the government may acquire using FAR Part 12 acquisition procedures.

The January 31st final rule can be found here.

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