FedGovContracts.com

Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: March 31, 2003

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Foreign Acquisition

SOURCE: Federal Register, March 31, 2003, Vol. 68, No. 61, page 15615

AGENCIES: Department of Defense (DOD)

ACTION: Final Rule

SYNOPSIS: DOD is amending DFARS Part 225, Foreign Acquisition, and its corresponding clauses to simplify and clarify the policies pertaining to the acquisition of supplies and services from foreign sources.

EDITOR'S NOTE: For more on the proposed rule, see the October 7, 2002, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Foreign Acquisition."

EFFECTIVE DATE: April 30, 2003.

FOR FURTHER INFORMATION CONTACT: Amy Williams, Defense Acquisition Regulations Council, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; 703-602-0328; or by facsimile: 703-602-0350. Cite "DFARS Case 2002-D009" when referring to this final rule.

SUPPLEMENTAL INFORMATION: Because of the complexity of the Buy American Act and the trade agreements, DOD published on October 7, 2002, a proposal to extensively revise DFARS Part 225 to simplify and clarify the regulations governing the acquisition of supplies and services from foreign sources. The rule proposed to:

• Provide streamlined procedures in DFARS Subpart 225.5, Evaluating Foreign Offers -- Supply Contracts, for evaluating foreign offers when acquiring supplies, and add procedures for evaluating foreign offers in acquisitions in which price is not the determining factor.
  
  
• Change the definition of "qualifying country end product" in DFARS 252.225-7001, Buy American Act and Balance of Payments Program; DFARS 252.225-7021, Trade Agreements; and DFARS 252.225-7036, Buy American Act -- North American Free Trade Agreement Implementation Act -- Balance of Payments Program, to permit the qualifying country manufacturing the product to use components from any other qualifying country.
  
  
• In paragraph (b)(ii) of DFARS 225.103, Exceptions, lower the required approval levels for determinations of nonavailability under the Buy American Act.
  
  
• In paragraph (b) of DFARS 225.872-4, Individual Determinations, lower the required approval levels for individual public interest determinations for acquisition of end products from qualifying countries.
  
  
• In paragraph (1)(i)(B) of DFARS 225.902, Procedures, provide that the government will evaluate duty only if it is to be paid.
  
  
• In paragraph (b) of proposed DFARS 252.225-7013, Duty-Free Entry, state that, except for qualifying country supplies or eligible end products, the contractor will request duty-free entry only on foreign supplies for which the contractor estimates that duty will exceed $200 per shipment into the customs territory of the United States. DFARS 252.225-7013 would replace the five existing duty-free clauses: DFARS 252.225-7003, Information for Duty-Free Entry Evaluation; DFARS 252.225-7008, Supplies to be Accorded Duty-Free Entry; DFARS 252.225-7009, Duty-Free Entry -- Qualifying Country Supplies (End Products and Components); DFARS 252.225-7010, Duty-Free Entry -- Additional Provisions; and DFARS 252.225-7037, Duty-Free Entry - Eligible End Products.
  
  
• Eliminate from DFARS 252.225-7042, Authorization to Perform, the requirement for a contractor to represent that it will comply with all laws, decrees, labor standards, and regulations of the foreign country in which the contract will be performed.
  
  
• Delete obsolete clauses relating to outdated appropriations act restrictions: DFARS 252.225-7017, Prohibition on Award to Companies Owned by the People's Republic of China; DFARS 252.225-7024, Restriction on Acquisition of Night Vision Image Intensifier Tubes and Devices; DFARS 252.225-7026, Reporting of Contract Performance Outside the United States; and DFARS 252.225-7029, Preference for United States or Canadian Air Circuit Breakers.
  
  
• Incorporate the changes proposed on July 30, 2002, to DFARS Part 225 and the corresponding provisions and clauses in DFARS Part 252 to implement the determination of Under Secretary of Defense for Acquisition, Technology, and Logistics E.C. "Pete" Aldridge (USD(AT&L)) that, for procurements subject to the Trade Agreements Act, it would be inconsistent with the public interest to apply the Buy American Act to U.S.-made end products that are substantially transformed in the United States. (EDITOR'S NOTE: The proposed rule was adopted as final without change. For more on the final rule, see the December 20, 2002, FEDERAL CONTRACT DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Trade Agreements Act -- Exception for U.S.-Made End Products.").

Five respondents submitted comments on the proposed rule. Other than minor editorial changes, the proposed rule is adopted as final.

The most significant change between the proposed and final rules is the reinstatement of DFARS 225.170, Acquisition From or Through Other Government Agencies, which require the DFARS Part 225 evaluation procedures to be applied to foreign items on Federal Supply Schedules.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Return to the Dispatches Library.

Return to the Main Page.