# DLAD PART 25

- SUBPART 25.1 - BUY AMERICAN ACT - SUPPLIES

- 25.103 Exceptions.
- 25.104 Nonavailable Articles

- SUBPART 25.8 - INTERNATIONAL AGREEMENTS AND COORDINATION

- 25.870 Contracting with Canadian contractors.

- 25.870-1 General

- SUBPART 25.9 - CUSTOMS AND DUTIES

- 25.902 Procedures
- 25.903 Exempted supplies.

- SUBPART 25.70 - AUTHORIZATION ACTS, APPROPRIATIONS ACTS, AND

- 25.7002 Restriction on food, clothing, fabrics, and specialty metals.

- 25.7002-2 Exceptions.
- 25.7002-2 (90) Domestic NonavailabilityValidation.
- 25.7002-3 Contract clauses.

- SUBPART 25.73 - ACQUISITIONS FOR FOREIGN MILITARY SALES

- 25.7302-90 Foreign Military Sales (FMS) shipping instructions.

- SUBPART 25.74 - DEFENSE CONTRACTORS OUTSIDE THE UNITED STATES

- 25.7402 Contractor personnel authorized to accompany U.S. Armed Forces deployed outside the United States.

- 25.7402-90 Policy
- 25.7402-4 Contract clauses.

- SUBPART 25.75 - BALANCE OF PAYMENTS PROGRAM

- 25.7501 Policy.

> PART 25

> FOREIGN ACQUISITION

> TABLE OF CONTENTS

> SUBPART 25.1 - BUY AMERICAN ACT - SUPPLIES

> 25.103 Exceptions.

> 25.104 Nonavailable Articles.

> SUBPART 25.8 - INTERNATIONAL AGREEMENTS AND COORDINATION

> 25.870 Contracting with Canadian contractors.

> SUBPART 25.9 - CUSTOMS AND DUTIES

> 25.903 Exempted supplies.

> SUBPART 25.70 - AUTHORIZATION ACTS, APPROPRIATIONS ACTS, AND OTHER STATUTORY RESTRICTIONS ON FOREIGN PURCHASES

> 25.7002 Restriction on food, clothing, fabrics, and specialty metals.

> 25.7002-2 Domestic nonavailability validation

> SUBPART 25.73 - ACQUISITIONS FOR FOREIGN MILITARY SALES

> 25.7302-90 Foreign Military Sales (FMS) shipping instructions.

> SUBPART 25.74 - DEFENSE CONTRACTORS OUTSIDE THE UNITED STATES

> 25.7402 Contractor personnel authorized to accompany U.S. Armed Forces deployed outside the United States

> SUBPART 25.75 - BALANCE OF PAYMENTS PROGRAM

> 25.7501 Policy.

> SUBPART 25.1 - BUY AMERICAN ACT - SUPPLIES

> 25.103 Exceptions.

> (b) (1) (90) The fact that an item to be procured is on the list at FAR 25.104(a) does not eliminate the buying activity’s responsibility to conduct market research appropriate to the circumstances, to include seeking domestic sources, before soliciting offers. (See 10.001(a)(2)(93)).

> (b)(i) Prepare nonavailability determinations in Determination and Findings (D&F) form.

(b)(i)(C) For contracting offices where the Director, Acquisition Management, (J-7) is the HCA, submit waiver requests to HQ DLA, Attn: J-72.

> (b)(ii) For purposes of determining the approval level, do not add option totals to basic award amounts. Prior to exercising an option, however, a new determination of nonavailability (for the option total only) must be made.

25.104 Nonavailable Articles

> (b)(90) If it is determined that an article contained on the list at FAR 25.104(a) is available domestically in sufficient and reasonably available quantities of a satisfactory quality, steps should be taken to propose a revision to the FAR to remove the article from the list. (See FAR 25.104(b)). Document the file with the results of the market research and include a definitive statement concerning the item’s domestic availability. (See 1.201-91 for procedures on amending the FAR or the DFARS.)

> SUBPART 25.8 - INTERNATIONAL AGREEMENTS AND COORDINATION

> 25.870 Contracting with Canadian contractors.

> 25.870-1 General

> (e)(90) See 15.403-3(c)(4)(A)(90)(91) for price analysis and price reasonableness determination requirements for offers from Canadian Commercial Corporation.

> SUBPART 25.9 - CUSTOMS AND DUTIES

25.902 Procedures

Use clause 52.225-9003, Customs Clearance Procedures for U.S. Subsistence in the European Union, in solicitations and contracts when procuring subsistence items originating in the U.S. being delivered to countries within the European Union.

> 25.903 Exempted supplies.

> (1) The Director, DESC, or designee, is authorized to execute duty-free entry certificates for the fuels-related supplies in PGI 225.903(b)(i)(A)(2)

> SUBPART 25.70 - AUTHORIZATION ACTS, APPROPRIATIONS ACTS, AND

> OTHER STATUTORY RESTRICTIONS ON FOREIGN PURCHASES

> 25.7002 Restriction on food, clothing, fabrics, and specialty metals.

> 25.7002-2 Exceptions.

25.7002-2 (90) Domestic NonavailabilityValidation.

> DFARS 225.7002-2(c) contains an exception to the Berry Amendment domestic source restriction for those articles listed at FAR 25.104(a). Before soliciting offers for items covered by the restriction at DFARS 225.7002 that fall under the exception, the buying activity shall verify, through market research, that the article should remain on the list and thus, still be exempt from the Berry Amendment restriction. The contract file is to be documented accordingly. (See 10.001(a)(2)(93) and 25.104(b)(90)).

> (a) All domestic non-availability determination approval requests made pursuant to 10 U.S.C. 2533a, also known as the Berry Amendment, shall be forwarded to the DLA Senior Procurement Executive for submission to the Under Secretary of Defense (Acquisition, Technology & Logistics) for approval. Options not exercised at time of award require a separate non-availability determination. (See DLAD 90.17)
> (b) Each activity that has been granted a domestic non-availability determination (DNAD) is required to annually report 1) results of market research to find domestic sources that would preclude the continuing need for the DNAD; 2) results of specification reviews with requiring activities in order to find acceptable substitute products that would not require a DNAD; and 3) results of any additional requirements specified in the DNAD approval. The first submission is due to J-72 on December 31, 2003.

(91) Berry Amendment Compliance for Specialty Metals.

> On June 1, 2006, the Undersecretary of Defense (AT&L) issued a memorandum authorizing the Department to use the DCMA interim Conditional Acceptance with Payment Withhold procedure for non-compliant specialty metals. (See PGI 25.7003-2(91) for the USD(AT&L) memo and the required DCMA conditional acceptance language.)

(a) Use of the DCMA’s March 10, 2006, instruction on Conditional Acceptance with Payment Withhold is authorized, when justified in accordance with the USD(AT&L) memo and approved by the relevant HCA.

(b) Follow the language provided in DCMA’s instruction in all conditional acceptance documents and attach to the receiving report.

(c) Document the justification for and approval of use of the withhold procedure, and forward a copy of any use of the procedure along with its justification to J-72. DLA HQ will monitor use of the procedure and provide data to OSD as necessary.

(d) Contracting Officers shall first examine feasibility of the existing exceptions for specialty metals, found in DFARS 225.7002-2, and will document in the justification why none were suitable. The justification will also discuss why no alternative compliant parts, if any, are acceptable to the customer, as well as the steps being taken to obtain compliance from the prime contractor.

(e) Consult with legal counsel when preparing to use conditional acceptance with payment withhold.

(f) Consult DCMA for the amount of the payment withhold when the contract is administered by DCMA. For contracts not under DCMA administration, calculate the withhold amount as the cost of the lowest auditable part that contains specialty metals, plus applicable burden and profit. In no event should the withhold amount be solely the cost of the specialty metal used in the part.

(g) Notify the supplier that a Corrective Action Plan (CAP) is expected no later than 180 days from date of withhold. The supplier may choose to submit the CAP at a shipment, contract, program, business sector, or corporate level. Review and submit any CAPs provided at a shipment, contract, or program level to the ACO. Return the CAP to the prime contractor if it does not contain a suitable timeframe for replacement, correction, or rework of parts, if any of these is deemed practicable by the contracting officer in consultation with the customer.

(h) Continually emphasize to suppliers the need to become compliant at the earliest possible date.

(i) If prime contractor claims compliance is not and will never be possible, obtain information from the prime suitable to support a DNAD. Submit any DNAD requests in accordance with DLAD 90.17.

(j) The conditional acceptance with payment withhold procedure is an interim measure. If the contractor does not demonstrate within a reasonable period that it can either provide compliant specialty metal parts or provide data supporting a DNAD, and an existing exception does not apply, do not continue to accept the non-compliant parts.

(k) Use of the DCMA instruction of March 10, 2006 is limited to specialty metals.

> 25.7002-3 Contract clauses.

> (c) Alternate 1 of the clause at 252.225-7014, preference for Domestic Specialty metals, must be used for weapon-systems-coded items procured for one of the enumerated programs.

> SUBPART 25.73 - ACQUISITIONS FOR FOREIGN MILITARY SALES

25.7302-90 Foreign Military Sales (FMS) shipping instructions.

(a) In order to reduce misdirected shipments of FMS materiel, do not place shipping addresses on FMS contracts except as provided in paragraphs (b) and (c) below. Instead, place a notice in the contract requiring the contractor to contact the transportation officer (TO) at the contracting activity that awarded the contract or that placed the order, unless contract administration responsibilities were assigned to an office other than the contracting activity that awarded the contract. Orders and contracts assigned to DCMA for administration shall include a notice to require the contractor to submit a DD Form 1659, Application for U.S. Government Shipping Documentation/Instructions, to the transportation officer at the contract administration office for shipping instructions. Use a clause substantially the same as that provided at 52.225-9002, FMS Shipping Instructions (June 1998).

(b) A shipping address may be placed in FMS contracts if complete shipment is anticipated within 120 days of award.

(c) Contracts contemplating using f.o.b. origin shipping terms may include a firm shipping address.

(d) Additional contract provisions may be appropriate to satisfy unique requirements for requisitions that contain a "Z" or "Y" in card column 46. However, do not list the freight forwarder or embassy addresses in the contract.

(e) By memorandum dated August 10, 2000, the Defense Security Cooperation Agency approved the use of DVD with fast payment procedures as a means to improve support to foreign military sales customers. This approval will allow the inclusion of FMS customer requirements in many contract arrangements and eliminate unnecessary Government source inspections. However, the following considerations may affect the decision to include FMS requirements in DVD contracts:

(i) The ability to include FMS requirements in contracts may still be limited by preservation and packing requirements. Marking requirements must comply with MIL-STD-129 and the Security Assistance Management Manual for FMS requirements. Commercial marking practices do not generally contain all information required by those documents. It is particularly important to clearly mark the requisition number on the packaging.

(ii) Under the terms of the Letters of Offer and Acceptance (LOA) negotiated with foreign governments, title transfers to the foreign government at the contractor’s loading dock. [Note: The LOA language pertaining to title transfer at the contractor’s shipping dock does not require inspection and acceptance at origin or the use of f.o.b. origin shipping terms]. The LOAs also require repair and replacement of items for one year after shipment. Under fast payment procedures, the contractor is responsible for repair and replacement of items for a period of 180 days from the date title to the supplies vests in the Government. For FMS requirements, this would equate to 180 days from the date of shipment. In order to comply with the terms and conditions of the LOA when using fast payment procedures, problems not identified within 180 days of shipment must still be resolved by the Defense Supply Centers.

(iii) Material supplied to fulfill FMS requirements should receive the same level of inspection that is afforded to U.S. Military customers for the same material.

(iv) Direct Vendor Delivery of FMS shipments to freight forwarders may use Fast Payment procedures in accordance with 13.402(90)(2).

> SUBPART 25.74 - DEFENSE CONTRACTORS OUTSIDE THE UNITED STATES

25.7402 Contractor personnel authorized to accompany U.S. Armed Forces deployed outside the United States.

25.7402-90 Policy

(a) When contracting for requirements for delivery to or performance in the CENTCOM AOR, Contracting Officers shall, in addition to complying with existing requirements in DFARS and DFARS PGI Subpart 225.74:

(1) Implement the Synchronized Predeployment and Operational Tracker (SPOT) requirements of DoD Class Deviation 2007-O0010 and/or DFARS 252.225-7040 (Note that both may be applicable depending on the circumstances of a particular contract.) See the OUSD(AT&L)/DPAP memo of January 28, 2008, that mandates contractor data input into SPOT in six timed phases, culminating in the inclusion of all contractors employed on DoD funded contracts being performed in support of contingency operations anywhere in the world. DFARS 225.301-4 also designates SPOT as the appropriate automated system to use for the list of contractor personnel in FAR clause 52.225-19, Contractor Personnel in a Designated Operational Area or Supporting a Diplomatic or Consular Mission Outside the United States. The FAR clause is used when performance is in a contingency area or diplomatic/consular mission other than in the CENTCOM AOR and contractor personnel are not authorized to accompany the force.

(2) Follow the requirements specified in OUSD(AT&L)/DPAP Policy Memo, November 26, 2007, Iraq/Afghanistan Theater Business Clearance (TBC) (applicable to Iraq and Afghanistan only; also, note the exception to the TBC requirement in (f) below.).

(3) If Private Security Contractors (PSC) are authorized for the contract, follow CENTCOM/JCC-I/A requirements relating to PSCs in the JCC-I/A Contracting Officer’s Guide to Special Contract Requirements for Iraq/Afghanistan Theater Business Clearance, November 25, 2007. (see Contracting Officer’s Guide on CENTCOM website) and follow the procedures in DLAD PGI 25.7402-90 (a). After local Office of Counsel review and approval of an awarded contractor’s private security plan, submit the contractor’s private security plan to the DLA HQ Office of General Counsel (DG) for approval; once approved internally, DG will in turn submit the plan to CENTCOM (MNC-I or CJTF-82). See PGI 25.7402-90(a)(3) for procedures to submit updates to previously approved PSC plans.

(4) Contracting Officers shall check the CENTCOM contracting office website for the most current mandatory language before issuing a solicitation.

(b) The CENTCOM/JCC-I/A policies and requirements for SPOT, TBC, and PSC, as supplemented below, shall also be applied to contracts with foreign governments, representatives of foreign governments, or foreign corporations wholly owned by foreign governments, if performance of the contract, even if only delivery, will wholly or partially occur within Iraq or Afghanistan.

(c) The DLA Senior Procurement Executive (SPE) has been delegated authority by JCC-I/A to approve Theater Business Clearances (TBC)s for all DLA contracts for delivery to or performance in Iraq or Afghanistan that do not include a requirement for a PSC (See Delegation of Authority memorandum dated December 24, 2007). The TBC approval procedures specified in OUSD(AT&L)/DPAP Policy Memo, November 26, 2007,, Iraq/Afghanistan Theater Business Clearance, requiring submission of a TBC package to JCC-I/A, are applicable when a contract or subcontract at any level involves a PSC requirement. See DLAD PGI 25.7402-90 (a) for procedures for submission of PSC plans to DLA HQ. The arming requirements, procedures, and references for a PSC can be found in AI 52.6, Arming of Contractors: Iraq/Afghanistan, in the Contracting Officer’s Guide to Special Contract Requirements for Iraq/Afghanistan Theater Business Clearance. The USCENTCOM PSC policy for civilian and contractor arming and delegation of authority for Iraq and Afghanistan is also found in the November 6 and 7, 2007, USCENTCOM messages.. See the mandatory procedures for submission of private security plans at DLAD PGI 25.7402-90 (a)

(d) The SPE shall review and approve any acquisition or modification of an existing contract that includes requirements for performance within or for delivery to Iraq or Afghanistan prior to solicitation or modification to ensure compliance with the OSD, CENTCOM, and JCC-I/A requirements in (a) above. As a reminder, in accordance with the OUSD (AT&L)/DPAP memos of December 20, 2007, and February 26, 2008, contracts subject to TBC review and approval are ones that have contractor personnel in Iraq or Afghanistan; or will deliver material to Iraq or Afghanistan under FOB Destination terms using commercial transportation outside the Defense Transportation System (DTS); or authorize contractor personnel, including subcontractors, to carry weapons in Iraq or Afghanistan. An appropriate level of review by the submitting contracting organization is required commensurate with the dollar value and complexity of the acquisition, as established by DLAD and the Supply Chain’s/Contracting Activity’s solicitation/contract review thresholds for supply and service contracts, to include concurrence of its cognizant Office of Counsel. To obtain HQ J-7 review and approval of the Theater Business Clearance see elements in (1) below that must be addressed for JCC-I/A. Contracting Officers shall submit both the JCC-I/A spreadsheet and the CENTCOM TBC Review Sheet with Tracker as part of the submission package to J-7, with the fourth column of the TBC Review Sheet with Tracker filled in to indicate the location for each mandatory requirement in the supply chain’s solicitation.

(1) Ensure the submitted TBC contains the following elements, in accordance with JCC-I/A and DPAP requirements:

(a) Statement of Work and Terms and Conditions

(b) Acquisition Milestones for Award

(c) Number of contractor’s/subcontractor’s employees projected to support contract

(d) Name of customer/requirement POC, e-mail, phone number

(e) Name of PCO, e-mail, phone number

(2) Of utmost importance is the requirement to coordinate any contractor requests for billeting, dining, Morale, Welfare, and Recreation (MWR), and medical requirements with the location where the contractor is performing the contract. Ensure the entry on the TBC Request Form “Name of FOB Official Who Approved Billeting, Dining, MWR, etc if Authorized” represents a valid approval before submitting the TBC.

(3) TBC submission is required at both the pre-award and post-award stages.

(e) Contract Administration. In accordance with DFARS 242.202(a)(i), contract administration functions remain at DLA for CLASS I (Subsistence) and DESC products/services being provided/performed in Iraq or Afghanistan. For all others, the OUSD (AT&L)/DPAP memo of February 26, 2008, provides JCC-I/A’s instructions for delegating contract administration functions to them for that portion of the contract that will require performance in theater. In most cases, the quality assurance and property management functions will be the only functions that are delegated. Unless otherwise indicated in writing by JCC-I/A, these actions will be further delegated to DCMA-Iraq/Afghanistan. A Sample Delegation Letter, a Contract Administration Tracker, Data Package for Contract Delegation, Sample SF30 for further assignment of contract administration to DCMA if indicated by JCC-I/A, and a matrix version of 42.302(a) can be found in DLAD PGI 25.7402-90(e) and on the CENTCOM website. Previous memos concerning contract administration can also be found in the OUSD/DPAP Memo of October 25, 2007, and the USD Memo of October 19, 2007. See PGI 225.7402-90 (e) for procedures and notification of contract administration delegations.

(f) TBC is not required for commodity contracts that provide for shipment of supplies into either Iraq or Afghanistan through the DTS, although it is applicable if the DLA contractor is responsible for delivery following its receipt of supplies from DTS unless their sole means of delivery uses military convoys escorting commercial shipments in the AOR (as these are considered part of the DTS system). It is also applicable if DLA contractor personnel will perform incidental services related to the supplies within Iraq or Afghanistan.

(g) J-7 will provide JCC-I/A with periodic reports of DLA contracts for which the DLA SPE has approved the TBC, pursuant to the delegation of authority.

(h) Notification. Proper notification of approved TBCs to affected DLA organizations is required as these organizations are liaisons with the Forward Operating Bases (FOBs).

(1) For approved TBCs (either with or without PSC requirements), HQ J-7 will provide the TBC package to JCC-I/A Principal Assistant Responsible for Contracting (PARC) in accordance with the JCC-I/A memorandum of December 24, 2007. HQ J-7 will also provide the approved package to DLA-C and to the cognizant DLA Contingency Support Team (DCST- Kuwait, Iraq, or Afghanistan).

(2) The DCST will be the contracting officer’s liaison with the FOB Commander and will ensure that the requests for billeting, dining, MWR, and medical requirements are provided to the proper FOB points of contact and various approval authorities (Force Refinement Board (FRB), Installation Facilities Utilization Board (IFUB), and any local entities required). Contact points for DCSTs are:

DCST-Afghanistan (DCST-AF) Ops Officer, DSN: 318-431-4125/4694

DCST-Kuwait (DCST-KU) Support Ops NCO, DSN: 318-430-5434

DCST-Iraq (DCST-IZ) Operations Officer, DSN: 318-822-2992

(i) Expedited Requests for TBC

(1) TBC with or without a PSC element. For expedited performance of a TBC in conjunction with an expedited contract action to modify an existing contract or award a new contract, the contracting officer shall certify that all required TBC provisions are contained within the existing or proposed new contract, as applicable, via an e-mail notification to the HQ J-7 Deputy Director. Within 96 hours of the initial notification of the requirement for a TBC on an expedited procurement, the contracting officer shall provide the documentation required for a TBC to HQ J-7. HQ J-7 will review/approve the TBC and provide a copy of the final package to JCC-I/A-PARC, DLA-C (commercial 813-827-3066 or DSN 651-3066) and the cognizant DCST.

25.7402-4 Contract clauses.

(a) See PGI 25.7402-4(a) for guidance on use of the DFARS clause 252.225-7040 and on use of DoD Class Deviation 2007-O0010, Implementation of the Synchronized Predeployment and Operational Tracker (SPOT) to Account for Contractor Personnel Performing in the United States Central Command Area of Responsibility, issued on October 17, 2007. Special procedures and instructions regarding the input into SPOT of the required data on contractor personnel employed on security and translator /linguist service contracts can be found in the DPAP Interim Guidance for the Implementation of the SPOT program, dated September 28, 2007, as well as the clauses contained in the Contracting Officer’s Guide on the CENTCOM contracting office website see September 28, 2007, memo

> SUBPART 25.75 - BALANCE OF PAYMENTS PROGRAM

> 25.7501 Policy.

(c) The public interest determination shall be made by the Director, Acquisition Management, (J-7) Requesting activities shall submit their request in the form of a proposed D&F to HQ DLA, ATTN: J-72. Include the rationale for the determination as well as all relevant facts.