Commercial Products and Services: Raising the Market Research Bar or Much Ado about Nothing?

8 Pages Posted: 1 Nov 2018

See all articles by Steven L. Schooner

Steven L. Schooner

George Washington University - Law School

Date Written: November 2018


This short piece discusses the Federal Circuit's recent decision in Palantir USG, Inc. v. United States, No. 17-1465 (Fed. Cir. September, 2018), affirming that “the Army failed to determine whether commercial items meet or could be modified to meet the agency’s needs and that, by failing to do so, the Army acted in an arbitrary and capricious manner in violation of 10 U.S.C. § 2377.” The decision appears to tilt the balance towards “commercial products” and “commercial services” (recently redefined in the 2019 NDAA § 836; 41 U.S.C. §§ 103, 103a), in effect, mandating that procuring agencies use Federal Acquisition Regulation (FAR) Part 12 commercial item procedures despite the (very real) possibility that the Government’s needs might not be met by a solution from the commercial marketplace. As the essay notes, such a standard seems inordinately, arguably inappropriately, low.

The most obvious takeaway from Palantir derives from one of the most basic tenets of statutory interpretation: when Congress uses the word “shall,” rather than, for example, “may” or “should,” its direction is mandatory (rather than discretionary). Less obvious, but potentially more important, is the reminder that that contracting agencies get no credit for conducting market research if they do not subsequently consider or rely upon that market research.

Keywords: Commercial purchasing, commercial products and services, market research, government contracts, defense acquisition, Administrative Procedure Act (APA), statutory interpretation; Federal Acquisition Regulation (FAR)

JEL Classification: H42, H57, K12, K23, K41, L14, L33, M15, M38

Suggested Citation

Schooner, Steven L., Commercial Products and Services: Raising the Market Research Bar or Much Ado about Nothing? (November 2018). 32 Nash & Cibinic Report 52 (November 2018), GWU Law School Public Law Research Paper No. 2018-74, GWU Legal Studies Research Paper No. 2018-74, Available at SSRN: or

Steven L. Schooner (Contact Author)

George Washington University - Law School ( email )

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