DoD Changes Rules For Foreign Procurement
By Fred Shaheen, Greenberg
Traurig, Tysons Corner Office
View or download the PDF version of this Alert
Of interest to our Defense and Aerospace clients, whether prime contractors
or sub-contractors, is an initiative by the Department of Defense ("DoD")
to amend the Defense Federal Acquisition Regulation Supplement or "DFARS".
The DFARS are the military procurement-specific amplifying procurement rules
to the basic Federal Acquisition Regulations or "FAR". The purpose of the
proposed amendment is to simplify and clarify DoDís policy pertaining to
the acquisition of supplies and services from foreign sources.
The rule proposes revisions to DFARS Part 225, "Foreign Acquisition",
and associated provisions and clauses. The revised rule purports to:
- Streamline procedures for evaluating foreign offers when acquiring
supplies, and adds procedures for evaluating foreign offers in acquisitions
in which the price is not the determining factor.
- Change the definition of "qualifying country end product" to permit
the qualifying country manufacturing the product to use components from
any other qualifying country.
- Lower the required approval levels for determinations of non-availability
under the U.S. "Buy American Act".
- Lower the required approval levels for individual public interest
determinations for acquisition of end products from qualifying countries.
- Provide that the Government will evaluate duty only if it is to be
paid. 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 unit (end
product or component). One duty-free entry clause replaces five existing
- Make use of the clause pertaining to Waiver of United Kingdom Levies
optional for acquisitions not expected to exceed the simplified acquisition
- Eliminate 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.
- Move restrictions on contracting with firms owned or controlled by
the government of a terrorist country or other foreign governments from
Part 209, Contractor Responsibility, to Part 225, Foreign Acquisition.
- Delete obsolete text and clauses relating to outdated appropriations
act restrictions, resulting in the elimination of four clauses.
- Incorporates the DFARS changes proposed under Case 2002-D008, Trade
Agreements Act-Exception for U.S.-Made End Products, published at 67 FR
49278 on July 30, 2002.
DoD is inviting comments to this sweeping proposed new rule. They must
be submitted in writing on or before December 6, 2002 to be considered in
the formation of the final rule.
Please feel free to contact
Fred Shaheen in the Tysons
Corner with questions regarding further clarification on the implications
of this rule or interest in commenting upon it to DoD.
© 2002 Greenberg Traurig
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