DFARS Part 25

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PART 225 FOREIGN ACQUISITION

225.000 Scope of part.
This part also provides policy and procedures for--

225.000-70 Definitions.
As used in this part--

Implementation Act--Balance of Payments Program, instead of the meaning in FAR 25.101.

225.000-71 General guidelines.
To apply the policies and procedures of this part, analyze and evaluate offers of foreign end products generally as follows--

SUBPART 225.1--BUY AMERICAN ACT--SUPPLIES

225.102 Policy.

225.103 Agreements with certain foreign governments.
See 225.872.

225.105 Evaluating offers.
Use the following procedures instead of those in FAR 25.105. These procedures do not apply to acquisitions of information technology end products in Federal Supply Group 70 or 74 that are subject to the Trade Agreements Act.


TABLE 25-1, EVALUATION

Example 1

Example 2
Alternate I: Duty Not Exempted for Nonqualifying Country
Offers:
Nonqualifying Country Offer (including $100 duty)...... $6,000
Domestic Offer......................................... 8,500
Qualifying Country Offer............................... 7,800

Award on Nonqualifying Country Offer. Since the qualifying country offer is lower than the domestic offer, the nonqualifying country offer is evaluated without the factor. Since duty is not being exempted for nonqualifying country offers, the offer is evaluated and award is made at the price inclusive of duty ($6,000).

Alternate II: Duty Exempted:
Nonqualifying Country Offer (including $1,000 duty).... $880,500
Domestic Offer......................................... 950,000
Qualifying Country Offer............................... 880,000

Award on Nonqualifying Country Offer. Again, the qualifying country offer is lower than the domestic offer. The nonqualifying country offer is, therefore, evaluated without the factor. Since duty is being
exempted for nonqualifying country offers, the duty identified by the offeror is subtracted from the offered price, which is evaluated and awarded at $879,500.

Example 3

Nonqualifying Country Offer (including $150 duty)...... $9,600
Qualifying Country Offer............................... 9,500

Award on Qualifying Country Offer. Since no domestic offers are received, the nonqualifying country offer is evaluated without the evaluation factor. Since duty is not being exempted and would be paid by
the Government, the nonqualifying country offer is evaluated inclusive of duty.

Alternate II: Duty Exempted:
Nonqualifying Country Offer (including $1,000 duty).... $880,500
Qualifying Country Offer............................... 880,000

Award on Nonqualifying Country Offer. Since no domestic offers are received, the nonqualifying countryoffer is evaluated without the evaluation factor. Since duty is being exempted, duty is subtracted from the nonqualifying country offer, which is evaluated and awarded at $879,500.

Example 4


TABLE 25-1 (Continued)

225.107 Acquisition from or through other Government agencies.
Contracting activities must apply the evaluation procedures in 225.105 when using Federal supply schedules.

225.108 Excepted articles, materials, and supplies.

225.109 Solicitation provisions and contract clauses.

225.109-70 Additional provisions and clauses.
(a) Use the clause at 252.225-7002, Qualifying Country Sources as Subcontractors, in all solicitations and contracts that include one of the following clauses:

(b) When only domestic end products are acceptable, the solicitation must make a statement to that effect.

SUBPART 225.2--BUY AMERICAN ACT--CONSTRUCTION MATERIALS

225.202 Policy.

SUBPART 225.3--BALANCE OF PAYMENTS PROGRAM

225.302 Policy.

225.303 Procedures.

225.305 Solicitation provision and contract clause.

225.305-70 Additional clause.
In order to allow accurate reporting, by cognizant accounting and disbursing officers, of foreign and domestic expenditures, use the clause at 252.225-7005, Identification of Expenditures in the United States, in all negotiated contracts over $25,000 where--

SUBPART 225.4--TRADE AGREEMENTS

225.401 Definitions.

225.402 Policy.

225.403 Exceptions.

225.403-70 Products subject to the trade agreements acts.
Foreign end products subject to the Trade Agreements Act and NAFTA are those in the following Federalsupply groups (FSG). If a product is not in one of the listed groups, the Trade Agreements Act and NAFTA, do not apply. The definition of Caribbean Basin country end products in FAR 25.401 excludes those end products which are not eligible for duty-free treatment under 19 U.S.C. 2703(b). However, 225.401 expands the definition of Caribbean Basin country end products to include petroleum and any product derived from petroleum. The list of products has been annotated to indicate those products which are eligible for designated and NAFTA countries, but are not presently eligible for Caribbean Basin countries.

225.405 Procedures.

225.408 Solicitation provisions and contract clause.


SUBPART 225.6--CUSTOMS AND DUTIES

225.602 Policy.

225.603 Procedures.

(b) Formal entry and release.
(i) The administrative contracting officer must--
(A) Ensure that prime contractors are aware of and understand any Duty-Free Entry clause requirements. Contractors should understand that failure by them or their subcontractors to include the data required by the clause will result in treatment of the shipment as without benefit of free entry under Section XXII, Chapter 98, Subchapter VIII, Item 9808.00.30 of the Harmonized Tariff Schedule of the United States.
(B) Upon receipt of the required notice of purchase of foreign supplies from the contractor or any tier subcontractor--
(1) Verify the duty-free entitlement of goods entering under the contract; and
(2) Review the prime contract to ensure that performance of the contract requires the foreign supplies (quantity and price) identified in the notice.
(C) Upon receipt of notification from the contractor that it is placing a foreign purchase that was not identified at the time of contract award--

(2) If so, make an equitable adjustment in the contract price, unless the procuring contracting officer waives this adjustment;
(3) Determine the price of the foreign supplies exclusive of duty, and advise the contractor that that amount will be the maximum dollar value of supplies for which duty-free entry

(D) Within 20 days after receiving the notification of purchase of foreign supplies, forward the following information in the format indicated to the Commander, DCMC New York, ATTN:

We have received a contractor notification of the purchase of foreign supplies. I have verified that foreign supplies are required for the performance of the contract. If required, the prime contract price has been or will be adjusted.

Prime Contractor Name and Address:
Prime Contractor CAGE Code:
Prime Contract Number plus Delivery Order Number, if applicable:

Total Dollar Value of the Subcontract for Foreign Supplies:

ACO Code:

(E) If a contract modification results in a change to any data verifying duty-free entitlement previously furnished, forward a revised notification including the changed data to DCMC New York.
(ii) The responsibility for issuing duty-free entry certificates for foreign supplies purchased under a DoD contract or subcontract rests with the Customs Team, DCMDN-GNIC, DCMC New York.

(iii) Upon arrival of foreign supplies at ports of entry, the consignee, generally the contractor or its agent (import broker) for shipments to other than a military installation, will file U.S. Customs Forms 7501, 7501A, or 7506, with the District Director of Customs.
(c) Immediate entry and release.

(i) A DoD immediate delivery application has been approved and is on file at Customs Headquarters.
(ii) The application is for an indefinite period and is good for all Customs districts, areas, and ports.

225.604 Exempted supplies.

225.605 Contract clause.

225.605-70 Additional solicitation provisions and contract clauses.

SUBPART 225.7--RESTRICTIONS ON CERTAIN FOREIGN PURCHASES

225.702 Restrictions.
See 209.104-1(g)(i) for restrictions on contracting with firms owned or controlled by foreign governments that support terrorism. See 209.104-1(g)(ii) for prohibition on award of a DoD contract under a national security program to an entity controlled by a foreign government when access to proscribed information is required to perform the contract.

225.770 Secondary Arab boycott of Israel.

225.770-1 Restriction.
In accordance with 10 U.S.C. 2410i, do not enter into a prime contract with a foreign person, company, or entity unless it has certified that it does not comply with the secondary Arab boycott of Israel.

225.770-2 Procedures.
For contracts awarded to the Canadian Commercial Corporation (CCC), the CCC will submit a certification from its proposed subcontractor with the other required precontractual material (see 225.870).

225.770-3 Exceptions.
The restriction does not apply to--

225.770-4 Waivers.
The Secretary of Defense may waive the restriction on the basis of national security interests. Waiverrequests should be forwarded to the Director of Defense Procurement, OUSD(A&T)DP.

225.770-5 Solicitation provision and contract clause.
Unless an exception applies or a waiver has been granted, use the clause at 252.225-7031, Secondary Arab boycott of Israel, in all solicitations and contracts.

SUBPART 225.8--INTERNATIONAL AGREEMENTS AND COORDINATION

225.801 International agreements.

225.802 Procedures.

225.802-70 Contracts for performance outside the United States and Canada.

225.802-71 End user certificates.
Contracting officers considering the purchase of an item from a foreign source may encounter a request for the signing of a certificate to the effect that the Armed Forces of the United States is the end user of the equipment, and that it will not be transferred to third parties without authorization from the Government of the country selling the item. When encountering this situation, refer to DoD Directive 2040.3, End User Certificates, for guidance.

225.870 Contracting with Canadian contractors.

225.870-1 General.

225.870-2 Solicitation of Canadian contractors.

225.870-3 Submission of offers.

225.870-4 Contracting procedures.

225.870-5 Contract administration.

225.870-6 Termination procedures.

225.870-7 Acceptance of Canadian supplies.

225.870-8 Industrial security.
Industrial security for Canada shall be in accordance with the U.S.-Canada Industrial Security Agreement of March 31, 1952, as amended.

225.871 North Atlantic Treaty Organization (NATO) cooperative projects.

225.871-1 Scope.

225.871-2 Definitions.

225.871-3 General.

225.871-4 Statutory waivers.

225.871-5 Directed subcontracting.

225.871-6 Disposal of property.
Dispose of property that is jointly acquired by the members of a cooperative project under the procedures established in the agreement or in a manner consistent with the terms of the agreement.

225.871-7 Congressional notification.

225.872 Contracting with qualifying country sources.

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.872-1 General.

225.872-2 Applicability.

225.872-3 Solicitation procedures.

225.872-4 Evaluation of offers.

SERVICE OR AGENCY

Exemption of the Buy American Act/Balance of Payments Program

Determination and Findings

225.872-5 Contract administration.

225.872-6 Audit.

225.872-7 Industrial security for qualifying countries.
The required procedures for safeguarding classified defense information necessary for the performance of contracts awarded to qualifying country sources are in the DoD Industrial Security Regulation DoD 5220.22-R (implemented for the Army by AR 380-49; for the Navy by OPNAV Instruction 5540.8L; for the Air Force by AFR 205-4; for the Defense Information Systems Agency by DCA Instruction 240-110-8; and for the Defense Mapping Agency by DMA Instruction 5220.22).

225.872-8 Subcontracting with qualifying country sources.
In reviewing contractor subcontracting procedures, the contracting officer shall ensure that the prime contract does not preclude qualifying country sources from competing for subcontracts, except when restricted by national security interest reasons, mobilization base considerations, or applicable U.S. laws or regulations. (See the clause at 252.225-7002, Qualifying Country Sources as Subcontractors.)

225.873 Waiver of United Kingdom commercial exploitation levies.

225.873-1 Policy.
DoD and the Government of the United Kingdom (U.K.) have agreed to waive U.K. commercial exploitation levies and U.S. nonrecurring cost recoupment charges on a reciprocal basis. In order for U.K. levies to be waived, they must be identified and a waiver must be requested before award of the contract or subcontract under which the levies are charged.

225.873-2 Procedures.

225.873-3 Contract clause.
Use this clause at 252.225-7032, Waiver of United Kingdom Levies, in all solicitations and contracts for supplies--

SUBPART 225.9--ADDITIONAL FOREIGN ACQUISITION CLAUSES

225.970 Clause deviations in overseas contracts.
See 201.402(2) for approval authority for clause deviations in overseas contracts with governments of North Atlantic Treaty Organization (NATO) countries or other allies or with United Nations or NATO organizations.

225.971 Correspondence in English.
Use the clause at 252.225-7041, Correspondence in English, in solicitations and contracts when contract performance will be wholly or in part in a foreign country.

225.972 Authorization to perform.
Use the clause at 252.225-7042, Authorization to Perform, in solicitations and contracts when contract performance will be wholly or in part in a foreign country.

SUBPART 225.70--AUTHORIZATION ACTS, APPROPRIATIONS ACTS, AND
OTHER STATUTORY RESTRICTIONS ON FOREIGN ACQUISITION

225.7000 Scope of subpart.

225.7001 Definitions.
As used in this subpart--

225.7002 Restrictions on food, clothing, fabrics, specialty metals, and hand or measuring tools.

225.7002-1 Restrictions.

225.7002-2 Exceptions.
Acquisitions in the following categories are not subject to the restrictions in 225.7002-1--

225.7002-3 Contract clauses.
Unless an exception is known to apply--

225.7003 Restriction on overseas military construction.
For restriction on award of military construction contracts to be performed in the United States territories and possessions in the Pacific and on Kwajalein Atoll, or in countries bordering the Arabian Gulf, see 236.274(a).

225.7004 Restriction on overseas architect-engineer services.
For restriction on award of architect-engineer contracts to be performed in Japan, in any North Atlantic Treaty Organization member country, or in countries bordering the Arabian Gulf, see 236.602- 70.

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
[*further amended per D.L. 98-010, Effective 22 May 1998]
225.7005 Waiver of certain restrictions.

Where provided for elsewhere in this subpart, the restrictions on certain foreign purchases under 10 U.S.C. 2534(a) may be waived as follows:

[*further amended per D.L. 98-010, Effective 22 May 1998]

(ii) Options for the procurement of items that are exercised after the effective date of the waiver, if the option prices are adjusted for any reason other than the application of the waiver.
(b)] The head of the contracting activity may waive the restriction on a case-by-case basis upon execution of a determination and findings that any of the following applies:

225.7006 Restrictions on construction or repair of vessels in foreign shipyards.
10 U.S.C., Section 7309, restricts constructing or repairing vessels in foreign shipyards.

225.7007 Restriction on acquisition of foreign buses.

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7007-1 Restriction.
In accordance with 10 U.S.C. 2534 [ ], do not acquire a multipassenger motor vehicle (bus) unless it is manufactured in the United States or [Canada].

225.7007-2 Applicability.
Apply this restriction if the buses are purchased, leased, rented, or made available under contracts for transportation services.
[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7007-3 Exceptions.
This restriction does not apply in any of the following circumstances:

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7007-4 Waiver.
The waiver criteria at 225.7005[ ] apply to this restriction.

225.7008 Restriction on research and development.

225.7009 Reserved.

225.7010 Restriction on certain chemical weapons antidote.

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7010-1 Restriction.
In accordance with 10 U.S.C. 2534 and defense industrial mobilization requirements (see Subpart 208.72), do not acquire chemical weapons antidote contained in automatic injectors, or the components for such injectors, unless the [chemical weapons antidote] or component is manufactured in the United States or Canada by a company that--

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7010-2 Exception.
[ T]he restriction of 225.7010-1 does not apply [ ] if [ t]he acquisition is for an amount that does not exceed the simplified acquisition threshold[. ]
[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7010-3 Waiver.
The waiver criteria at 225.7005[ ] apply to this restriction.

225.7011 Restriction on Ballistic Missile Defense research, development, test, and evaluation.

225.7011-1 Definitions.

225.7011-2 Restriction.

225.7011-3 Exceptions.
This prohibition shall not apply--

225.7011-4 Procedures.

225.7011-5 Solicitation provision.
Use the provision at 252.225-7018, Notice of Prohibition of Certain Contracts With Foreign Entities for the Conduct of Ballistic Missile Defense RDT&E, in all competitively negotiated BDM solicitations for research, development, test, and evaluation, unless foreign participation is otherwise excluded.

225.7012 Restriction on anchor and mooring chain.

225.7012-1 Restrictions.

225.7012-2 Waiver.
The restriction in 225.7012-1(a) may be waived by the Secretary of the Department responsible for acquisition, on a case by case basis, where sufficient domestic suppliers are not available to meet DoD requirements on a timely basis and the acquisition is necessary to acquire capability for national security purposes.

225.7012-3 Contract clause.
Use the clause at 252.225-7019, Restriction on Acquisition of Foreign Anchor and Mooring Chain, in all solicitations and contracts--

225.7013 Reserved.

225.7014 Reserved.

225.7015 Restriction on night vision image intensifier tubes and devices.

225.7015-1 Restriction.
In accordance with Pub. L. 101-165 and 101-511, fiscal years 1990 and 1991 funds may not be used to acquire second and third generation night vision image intensifier tubes and devices unless they are manufactured in the United States or Canada.

225.7015-2 Exception.
Second and third generation night vision image intensifier tubes and devices manufactured outside the United States or Canada may be acquired if--

225.7015-3 Contract clause.
Use the clause at 252.225-7024, Restriction on Acquisition of Night Vision Image Intensifier Tubes and Devices, in all solicitations and contracts which--

225.7016 Restriction on air circuit breakers for naval vessels.

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7016-1 Restriction.
In accordance with 10 U.S.C. 2534 [ ], do not acquire air circuit breakers for naval vessels unless they are manufactured in the United States or [Canada].
[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7016-2 Exceptions.
This restriction does not apply if--

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7016-3 Waiver.
The waiver criteria at 225.7005[ ] apply to this restriction.

225.7016-4 Contract clause.
Use the clause at 252.225-7029, Preference for United States or Canadian Air Circuit Breakers, in all solicitations and contracts requiring air circuit breakers for naval vessels, unless--

225.7017 Restriction on carbon, alloy, and armor steel plate.

225.7017-1 Restriction.
In accordance with Section 8111 of Pub. L. 102-172, and similar sections in subsequent appropriations acts, all carbon, alloy, and armor steel plate in Federal stock class 9515 or described by American Society for Testing Materials (ASTM) or American Iron and Steel Institute (AISI) specifications, purchased by the Government or a contractor for use in a government-owned facility controlled (e.g., leased) by DoD, shall be melted or rolled in the United States or Canada.

225.7017-2 Exceptions.
This restriction does not apply to--

225.7017-3 Waiver.
The restriction may be waived by the Secretary of the department responsible for acquisition, on a case-by-case basis by certifying to the House and Senate Committees on Appropriations that--

225.7017-4 Contract clause.
Unless an exception under 225.7017-2 is known to apply or a waiver has been granted in accordance with 225.7017-3, use the clause at 252.225-7030, Restriction on Acquisition of Carbon, Alloy, and Armor Steel Plate, in all solicitations and contracts which--

225.7018 Restriction on four ton dolly jacks.

225.7018-1 Restriction.
In accordance with Section 9108 of Pub. L. 102-396, no fiscal year 1993 funds shall be used to procure four ton dolly jacks manufactured outside the United States.

225.7018-2 Waiver.
The restriction in 225.7018-1 may be waived on a case-by-case basis where the Secretary of the Military Department or the Under Secretary of Defense (Acquisition & Technology) certifies to the Committees on Appropriations of the House and Senate that--

225.7018-3 Contract clause.
Use the clause at 252.225-7033, Restriction on Acquisition of Four Ton Dolly Jacks, in solicitations and contracts that use fiscal year 1993 funds for the acquisition of four ton dolly jacks.

225.7019 Restriction on ball and roller bearings.

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7019-1 Restrictions.

225.7019-2 Exceptions.

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
[*further amended per D.L. 98-010, Effective 22 May 1998]
225.7019-3 Waiver.

[*further amended per D.L. 98-010, Effective 22 May 1998]

(ii) Options for the procurement of items that are exercised after the effective date of the waiver, if the option prices are adjusted for any reason other than the application of the waiver.]

225.7019-4 Contract clause.
Use the clause at 252.225-7016, Restriction on Acquisition of Ball and Roller Bearings, in all solicitations and contracts, unless--

225.7020 Reserved.

225.7021 Restriction on aircraft fuel cells.

225.7021-1 Restriction.
In accordance with Section 8090 of the Fiscal Year 1994 Defense Appropriations Act (Pub. L. 103-139), do not purchase aircraft fuel cells unless they are produced or manufactured in the United States by a domestic-operated entity.

225.7021-2 Waiver.
The restriction in 225.7021-1 may be waived by the Secretary of the department responsible for the acquisition, on a case-by-case basis, by certifying to the House and Senate Committees on Appropriations that--

225.7021-3 Contract clause.
Unless a waiver has been granted in accordance with 225.7021-2, use the clause at 252.225-7038, Restriction on Acquisition of Aircraft Fuel Cells, in all solicitations and contracts which--

225.7022 Restriction on totally enclosed lifeboat survival systems.

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7022-1 Restrictions.

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7022-2 Exceptions.
The restriction in 225.7022-1(b) does not apply if--

[amended per DFARS Case 97-D321, D.L. 98-001, 4 Feb 98]
225.7022-3 Waiver.
The waiver criteria at 225.7005[ ] apply only to the restriction of 225.7022-1(b).

225.7022-4 Contract Clause.
Use the clause at 252.225-7039, Restriction on Acquisition of Totally Enclosed Lifeboat Survival Systems, in all solicitations and contracts which require delivery of totally enclosed lifeboat survival systems.

225.7023 Restriction on supercomputers.

225.7023-1 Restriction.
In accordance with Section 8112 of Pub. L. 100-202, and similar sections in subsequent Defense Appropriations Acts, do not purchase any supercomputer that is not manufactured in the United States.

225.7023-2 Waiver.
The restriction in 225.7023-1 may be waived by the Secretary of Defense on a case-by-case basis, after the Secretary of Defense certifies to the Armed Services and Appropriations Committees of Congress that--

225.7023-3 Contract clause.
Use the clause at 252.225-7011, Restriction on Acquisition of Supercomputers, in solicitations and contracts for the acquisition of supercomputers.

SUBPART 225.71--OTHER RESTRICTIONS ON FOREIGN ACQUISITION

225.7100 Scope of subpart.
This subpart contains foreign product restrictions which are based on policies designed to protect thedefense industrial base.

225.7101 Definitions.
Relevant definitions are in the clause at 252.225-7025, Restriction on Acquisition of Forgings.

225.7102 Forgings.

225.7102-1 Policy.
DoD requirements for the following forging items, whether as end items or components, shall be acquired from domestic sources (as described in the clause at 252.225-7025) to the maximum extent practicable--

225.7102-2 Exceptions.
The policy in 225.7102-1 does not apply to acquisitions--

225.7102-3 Waiver.
Upon request from a prime contractor, the contracting officer may waive the requirement for domestic manufacture of the items covered by the policy in 225.7102-1.

225.7102-4 Contract clause.

225.7103 Polyacrylonitrile (PAN) carbon fiber.

225.7103-1 Policy.
All new major systems must use U.S. or Canadian manufacturers or producers for all PAN carbon fiber requirements.

225.7103-2 Waivers.
Contracting officers may, with the approval of the chief of the contracting office, waive, in whole or in part, the requirement of the clause at 252.225-7022. For example, a waiver may justified if a qualified U.S. or Canadian source cannot meet scheduling requirements.

225.7103-3 Contract clause.
Use the clause at 252.225-7022, Restriction on Acquisition of Polyacrylonitrile (PAN) Carbon Fiber, in all acquisitions for major systems (as defined in FAR Part 2) that are not yet in production (milestone III as defined in DoD 50002.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPS) and Major Automated Information system (MAIS) Acquisition Programs). Also use the clause in contracts for major systems if the clause was used in prior program contracts.

SUBPART 225.72--REPORTING CONTRACT PERFORMANCE OUTSIDE THE
UNITED STATES

225.7200 Scope of subpart.
This subpart prescribes procedures for contractor reporting and DoD monitoring of the volume, type, and nature of contract performance outside the United States, to include subcontracts, purchases, and intracompany transfers. It implements 10 U.S.C. 2410g which requires advance notification of contract performance outside the United States and Canada when the contract could have been performed inside the United States or Canada.

225.7201 Exception.
This subpart does not apply to contracts for commercial items, construction, ores, natural gas, utilities, petroleum products and crudes, timber (logs), or subsistence.

225.7202 Distribution of reports.
The contracting officer shall forward a copy of reports submitted by successful offerors as required by the clause at 252.225-7026, Reporting of Contract Performance Outside the United States, to the Deputy Director of Defense Procurement (Foreign Contracting), OUSD(A&T)DP(FC), Washington, DC 20301-3060. This is necessary to satisfy the requirement of 10 U.S.C. 2410g that the notifications (or copies) be maintained in compiled form for five years after the date of submission.

225.7203 Contract clause.
Except for acquisitions in 225.7201, use the clause at 252.225-7026, Reporting of Contract Performance Outside the United States, in all solicitations and contracts with an estimated or actual value exceeding $500,000, including those modified to exceed $500,000.

SUBPART 225.73--ACQUISITIONS FOR FOREIGN MILITARY SALES

225.7300 Scope of subpart.

225.7301 General.

225.7302 Procedures.
On FMS programs that will require an acquisition, the contracting officer assists the departmental/agency activity responsible for preparing the DoD Offer and Acceptance by--

225.7303 Pricing acquisitions for foreign military sales.
Price FMS contracts using the same principles as are used in pricing other defense contracts. Application of the pricing principles in FAR Parts 15 and 31 to an FMS contract, however, may result in prices that differ from other defense contract prices for the same item due to the considerations in this section.

225.7303-1 Contractor sales to other foreign customers.
If the contractor has made sales of the item required for the foreign military sale to foreign customers under comparable conditions, including quantity and delivery, price the FMS contract in accordance with FAR Part 15.

225.7303-2 Cost of doing business with a foreign government or an international organization.

225.7303-3 Government-to-government agreements.
If a government-to-government agreement between the United States and a foreign government for the sale, coproduction, or cooperative logistic support of a specifically defined weapon system, major enditem, or support item, contains language in conflict with the provisions of this section, the language of the government-to-government agreement prevails.

225.7303-4 Contingent fees.

225.7303-5 Acquisitions wholly paid for from nonrepayable funds.

225.7304 Source selection.

225.7305 Limitation of liability.
The contracting officer must advise the contractor whenever the foreign customer will assume the risk for loss or damage under the appropriate limitation of liability clause(s) (see FAR Subpart 46.8). Consider the costs of necessary insurance, if any, obtained by the contractor to cover the risk of loss or damage in establishing the FMS contract price.

225.7306 Exercise of options for foreign military sales.
Consider changes to cost and profit attributable to pricing differences between U.S. and FMS requirements when exercising an option to satisfy an FMS requirement. Also consider such changes if the option is already identified for FMS, but it is exercised for country B requirements instead of the country A requirements for which it was priced.

225.7307 Offset arrangements.
In accordance with the Presidential policy statement of April 16, 1990, DoD does not encourage, enter into, or commit U.S. firms to FMS offset arrangements. The decision whether to engage in offsets, and the responsibility for negotiating and implementing offset arrangements, resides with the companies involved.

225.7308 Contract clauses.

[Added per DFARS Case 96-D016, D.L. 98-011 , effective 11 June 1998]
[SUBPART 225.74-- ANTITERRORISM/FORCE PROTECTION POLICY FOR DEFENSE CONTRACTORS OUTSIDE THE UNITED STATES

225.7400 Scope of subpart.
This subpart pertains to antiterrorism/force protection policy for contracts that require performance or travel outside the United States.
225.7401 General.
Information and guidance pertaining to DoD antiterrorism/force protection can be obtained from the following offices:

225.7402 Contract clause.
Use the clause at 252.225-7043, Antiterrorism/Force Protection Policy for Defense Contractors Outside the United States, in solicitations and contracts that require performance or travel outside the United States, except for contracts with--

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