DATE: June 27, 2003

SUBJECT: Department of Defense; Federal Acquisition Regulation Class Deviation Regarding Prohibited Sources

SOURCE: Department of Defense Memorandum, dated June 25, 2003 (DAR Tracking Number 2003-O0003)

AGENCIES: Department of Defense (DOD)

ACTION: Federal Acquisition Regulation (FAR) Class Deviation

SYNOPSIS: On June 25, 2003, Director of Defense Procurement Deidre A. Lee issued a memorandum to the directors of defense agencies, the services' deputies for acquisition, the director of the Defense Contract Management Ageny (DCMA), and the Defense Logistics Agency's executive director for acquisition, technology, and supply, to remove Serbia, the Taliban-controlled regions, and Iraq from the list of prohibited sources in FAR 25.701, Restrictions, and FAR 52.225-13, Restrictions on Certain Foreign Purchases.

EFFECTIVE DATE: June 25, 2003.

FOR MORE INFORMATION CONTACT: Amy Williams, 703-602-0328, or by e-mail: amy.williams@osd.mil.

SUPPLEMENTAL INFORMATION: FAR 25.701 and FAR 52.225-13 prohibit the acquisition of supplies or services, even for overseas use, from Cuba, Iran, Iraq, Libya, North Korea, Sudan, Territory of Afghanistan controlled by the Taliban, and Serbia.

Executive Order 13192, Lifting and Modifying Measures with Respect to the Federal Republic of Yugoslavia (Serbia and Montenegro) lifted restrictions on acquisitions from Serbia; Executive Order 13268, Termination of Emergency with Respect to the Taliban and Amendment of Executive Order 13224 of September 23, 2001, lifted restrictions on acquisitions from the regions of Afghanistan formerly controlled by the Taliban; and the general license issued on May 23, 2003, by the Department of the Treasury, entitled "Iraqi Sanctions Regulations," lifted restrictions on acquisitions from Iraq. Until the FAR is revised to reflect the lifting of sanctions against these countries, a FAR class deviation removing these countries from FAR 25.701 and FAR 52.225-13 will be in effect for DOD acquisitions.

The remaining restrictions are enforced and administered by the Office of Foreign Assets Control (OFAC). The deviation to FAR 25.701 refers contracting officers to the OFAC's website at http://www.treas.gov/ofac for more information about the restrictions as well as updates to restrictions imposed after June 2003.

In addition, the prescription in FAR 25.1103, Other Provisions and Clauses, for FAR 52.225-13 currently requires that the clause be included in all solicitations and contracts exceeding the $2,500 micro-purchase threshold, except the threshold is $15,000 for acquisitions by DOD made on or before September 30, 2003, that facilitate the defense against terrorism or biological or chemical attack against the U.S. (see the January 2, 2002, FEDERAL CONTRACTS DISPATCH "Enactment of the National Defense Authorization Act for Fiscal Year 2002", specifically Section 836, Temporary Emergency Procurement Authority to Facilitate the Defense Against Terrorism or Biological or Chemical Attack). However, FAR 25.1103 does not reflect provision of the Homeland Security Act of 2002 (Public Law 107-296), specifically Section 854, Increased Micro-Purchase Threshold for Certain Procurements, that increases the threshold to $7,500 for any agency acquiring supplies or services to facilitate the defense against or recovery from terrorism or nuclear, biological, chemical, or radiological attack. This threshold remains in effect until November 24, 2003.

Because the $15,000 threshold for DOD expires September 30, 2003, but the $7,500 threshold does not expire until November 24, 2003, this FAR class deviation revises FAR 25.1103 to require inclusion of FAR 52.225-13 in solicitations and contracts exceeding $7,500 for the period October 1, 2003, through November 24, 2003.

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

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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