# DLAD PART 25 – FOREIGN ACQUISITION

- SUBPART 25.1 – BUY AMERICAN ACT – SUPPLIES

- 25.103 Exceptions.
- 25.104 Nonavailable articles.

- SUBPART 25.8 – OTHER INTERNATIONAL AGREEMENTS AND COORDINATION

- 25.802-71-90 End Use Certificates.

- 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 OTHER STATUTORY RESTRICTIONS ON FOREIGN PURCHASES

- 25.70(90) Restriction on certain components for naval vessels.
- 25.7002 25.7002 Restriction on food, clothing, fabrics, and hand or measuring tools.

- 25.7002-2 Exceptions.
- 25.7002-2-90) Domestic nonavailability validation.

- SUBPART 25.73 – ACQUISITIONS FOR FOREIGN MILITARY SALES

- 25.7302 Guidance.

- 25.7302-90 Foreign military sales (FMS) guidance.
- 25.7307-90 Solicitation provisions and contract clauses.

- SUBPART 25.74 – DEFENSE CONTRACTORS OUTSIDE THE UNITED STATES

- 25.7401 Contracts requiring performance or delivery in a foreign country.

- 25.7401-90 Policy.

- 25.7402 Contractor personnel authorized to accompany U.S. armed forces deployed outside the United States.

- 25.7402-3 Government support.

- SUBPART 25.75 – BALANCE OF PAYMENTS PROGRAM

- 25.7501 Policy.

- SUBPART 25.77 – ACQUISITIONS IN SUPPORT OF OPERATIONS IN IRAQ OR AFGHANISTAN

- 25.7703 Acquisition of products or services other than small arms.

- 25.7703-2 Determination requirements.

- SUBPART 25.78 - ACQUISITIONS IN SUPPORT OF GEOGRAPHIC COMBATANT COMMAND’S THEATER SECURITY COOPERATION EFFORTS

- 25.7801-90 Procurement and contracting support of theater security cooperation efforts.

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

25.802-71(90) End use certificates.

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

25.70(90) Restriction on certain components for naval vessels.

25.7002 Restriction on food, clothing, fabrics, and hand or measuring tools.

25.7002-2 Domestic nonavailability validation.

SUBPART 25.73 – ACQUISITIONS FOR FOREIGN MILITARY SALES

25.7302-90 Foreign military sales (FMS) guidance.

SUBPART 25.74 – DEFENSE CONTRACTORS OUTSIDE THE UNITED STATES

25.7401 Contracts requiring performance or delivery in a foreign country.

25.7401-90 Policy.

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 25.77 – ACQUISITIONS IN SUPPORT OF OPERATIONS IN IRAQ OR AFGHANISTAN

25.7703 Acquisition of products or services other than small arms.

25.7703-2 Determination requirements.

SUBPART 25.78 - ACQUISITIONS IN SUPPORT OF GEOGRAPHIC COMBATANT COMMAND’S THEATER SECURITY COOPERATION EFFORTS

25.7801-90 Procurement and contracting support of theater security cooperation efforts.

SUBPART 25.1 – BUY AMERICAN ACT – SUPPLIES

25.103 Exceptions.

(b)(1)(S-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 a determination and findings (D&F) form.

(b)(i)(C) For contracting offices where the Director, DLA Acquisition (J7) is the HCA, submit waiver requests to DLA HQ, attention: J72.

(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)(S-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 – OTHER INTERNATIONAL AGREEMENTS AND COORDINATION

(Revised August 2, 2011 through PROCLTR 2011-22)

25.802-71-90 End Use Certificates.

The DoD policy for end use certificates (EUCs) is found in DoD Directive, 2040.3, End Use Certificates. (The policy can be found at http://www.dtic.mil/whs/directives/corres/pdf/204003p.pdf. )

(a) End use certificates (EUCs) are written agreements in connection with the transfer of foreign military equipment or technical data to the United States that restrict the use or transfer of that item by the United States. EUCs are divided into three categories, Category I, II, and III, and each category has specific signature approval authorities.

(b) For military service managed items at depot level repairable and supply storage and distribution detachments, the EUC is processed, approved and signed by the appropriate Secretary of Military Department in accordance with DoD Directive 2040.3. Oversight and management responsibilities for the resulting EUC remain with the granting military service.

(c)(1) Contracting officers are encouraged to find an alternate supply source or negotiate an alternate delivery method to avoid the necessity of an EUC. Procedures are available, however, if other alternatives are not feasible and it is in the best interests of the United States to purchase foreign products subject to an EUC.

(2) When requesting an EUC, plan sufficiently in advance to preclude any need for a request to expedite. Processing timelines, especially with coordination external to DLA, expressly limit DLA's ability to expedite EUCs.

(d) Contracting officers should consult with the local Office of Counsel for assistance in determining the appropriate category of the EUC request. EUC requests can vary in their language and format since foreign countries establish their own security requirements, and there can be also be variation in format within a country’s export offices.

(e) For EUC requests from any European country, concurrently contact the DLA-E Office of Counsel, through local counsel, while preparing the EUC request. DLA-E may be able to coordinate with the U.S. Army Europe (USAREUR) on the approach for addressing the contractor’s EUC request. These offices are familiar with export license issues and may be able to assist in gaining an export license for the supplier without the need for a EUC. Concurrently, proceed with the guidance provided in (e), (f), or (g) below for EUC procedures.

(f) Category I EUCs.

(1) Category I EUCs are for items that the United States may use for defense purposes. See paragraph 3.2 of DODD 2040.3 for the definition of “defense purposes”. The United States may make direct use of such Category I EUC items in any part of the world and may transfer these items by means of grant aid, International Military Education and Training (IMET) programs, Foreign Military Sales (FMS), and other security assistance and armaments cooperation authorities. Items are designated as Category I EUCs for security purposes by the foreign government, or based upon nonproliferation agreements to which the U.S. is a party. This category of EUCs may apply to the procurement of missile technology.

(2) The Director, DLA may authorize execution of the individual Category I EUC and then delegate signature to the Component Acquisition Executive. See PGI 25.802-71(90)(e) for processing procedures for Category I EUCs and a template. Contracting officers should provide the request to J7for a signed Category I EUC no less than 30 days before it is needed.

(g) Category II EUCs. Category II EUCs are any EUCs that are not either Category I or III.

(1) The Director, DLA may approve the use of a Category II EUC, after the procedures in DODD 2040.3 paragraph 6.1.2 have been followed, and may authorize the Component Acquisition Executive to sign the individual EUC. These procedures require a minimum of 21 days advance notification to the Office of the Under Secretary of Defense (OUSD)(AT&L) who may coordinate with the U.S. Department of State. Unless DLA is contacted by OUSD(AT&L) with specific instructions during this time frame, concurrence may be assumed after expiration of the 21 day period.

(2) The Director, DLA must determine that notwithstanding any use or transfer limitations, the purchase of the item is in the U.S. national interest. The Director, DLA may authorize execution of the individual Category II EUC and then delegate signature to the Component Acquisition Executive. See DLAD PGI 25.802-71(90)(g) for processing procedures for Category II EUCs and a template. Provide the package requesting approval of a Category II EUC to J7 no less than 60 days before it is needed.

(h) Category III EUCs. Category III EUCs are those that limit the right of the U.S. Government to use the item in any part of the world, or limit the right of the U.S. Government to provide the item to allies engaged with the U.S. in armed conflict with a common enemy.

(1) The military service secretaries and the Directors of Defense Agencies are prohibited from approving EUCs in this category, and only OUSD may grant a waiver to this prohibition.

(2) With this waiver, the agency is then authorized to execute an EUC with the requesting government for the specific acquisition. OUSD will likely require that the agency establish procedures to ensure that any possible re-transfer of the equipment does not occur without obtaining prior approval from the country that requested the EUC.

(3) With the waiver from OUSD, the Director, DLA would then be authorized to approve and sign a Category III EUC for a specific acquisition or can authorize the Component Acquisition Executive to sign the individual EUC.

(4) The waiver is not a class waiver for the item. However, task and delivery orders for that specific acquisition (including multiyear or multiple year contracts) under the resulting EUC would not necessitate a further EUC. DLA activities should specify whether the procurement involves a multi-year contract or task/delivery orders in the package for OSD consideration.

(5) See DLAD PGI 25.802-71(90)(g) for instructions and a waiver template for Category III EUCs. Provide the request to J7 no less than 90 days before it is needed.

(i) All EUC requests or requests for waivers must be sent thru J7 for processing and approval by the Director, DLA. See PGI 25.802-71 (90) for coordination procedures.

(j) J71 will promptly forward copies of signed EUCs of all three categories to OUSD(AT&L).

25.870 Contracting with Canadian contractors.

25.870-1 General.

(e)(S-90) See 15.403-3(a)(4)(S-90) 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.

The Director, DLA Energy, 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

(Revised September 9, 2013)

25.70(90) Restriction on certain components for naval vessels.

(a) Restriction. In accordance with 10 U.S.C. 2534(a), do not purchase the following components of naval vessels, to the extent that they are unique to marine applications, unless manufactured in the United States or Canada:

(1) gyrocompasses,

(2) electronic navigation chart systems,

(3) steering controls,

(4) pumps,

(5) propulsion and machinery control systems, and

(6) totally enclosed lifeboats.

(b) Exceptions. This restriction does not apply to –

(1) Contracts or subcontracts that do not exceed the simplified acquisition threshold, or

(2) Acquisition of spare or repair parts needed to support components for naval vessels produced or manufactured outside the United States.

(c) Implementation.

(1) 10 U.S.C. 2534(h) prohibits the use of a contract clause or certification to implement this restriction.

(2) Implementation of this restriction shall be accomplished through management and oversight techniques that achieve the objective of this restriction without imposing a significant management burden on the Government or contractor.

(d) Waiver. In accordance with the provisions of DFARS 225.7008(b), the Under Secretary of Defense (Acquisition, Technology, and Logistics) has executed an annual waiver of the restrictions of 10 U.S.C 2534 for certain items manufactured in the United Kingdom, including the items listed in paragraph (a) above. This waiver applies to –

(1) Procurements under solicitations issued on or after August 4, 1998; and

(2) Subcontracts and options under contracts entered into prior to August, 4, 1998, under the conditions described in DFARS 225.7008(a)(1)(iv).

(e) Other proposed waivers of this restriction will be processed using the format, content, and procedures prescribed by DLAD PGI 25.7002-2(90)(b) and (c), modified to reflect that the waiver relates to the restriction in 10 U.S. C. 2534(a) and providing detailed factual support for the appropriate basis for waiver in 10 U.S.C. 2534(d). J7 will process waiver requests to the Under Secretary of Defense for Acquisition, Technology and Logistics for approval. (Note: The delegations or waiver authority in DFARS 225.7008 only apply to items specifically covered in DFARS 225.70, and are therefore not applicable to the items included in 25.70(90)(a) above).

25.7002 25.7002 Restriction on food, clothing, fabrics, and hand or measuring tools.

25.7002-2 Exceptions.

(c) 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 for that procurement. The contract file is to be documented accordingly. (See Part 10 and 25.104(b)(S-90)).

25.7002-2-90) Domestic nonavailability validation.

(a) All domestic non-availability determination requests made pursuant to 10 U.S.C. 2533a, also known as the Berry Amendment, shall be forwarded to the DLA SPE for submission to the Director, DLA, for approval. See PGI 25.7002-2 for guidance in requesting a domestics non-availability determination (DNAD).

(b) Requests for DNADs will specify the appropriate period to which the DNAD should apply. Market research will be used to substantiate whether the nonavailability is temporary or permanent. If the nonavailability is temporary, contracting activities will document consideration of alternatives to a DNAD and why these are not adequate, and will submit the DNAD to cover only the temporary period of nonavailability. Otherwise, the DNAD’s time length should be made indefinite until such time as market research establishes there are sufficient domestic sources that can provide the item or a satisfactory alternative as and when needed in satisfactory quality, sufficient quantity, and at U.S. market prices.

(c) Each activity that has been granted a domestic non-availability determination (DNAD) is required to annually report to J72 no later than December 31 of each year: 1) results of market research to find domestic sources that would preclude the continuing need for the DNAD; 2) results of requirement reviews with requiring activities in order to find acceptable substitute items or materials that would not require a DNAD; and 3) results of any additional requirements specified in the DNAD approval.

SUBPART 25.73 – ACQUISITIONS FOR FOREIGN MILITARY SALES

(Updated July 1, 2013 through PROCLTR 2013-57)

25.7302 Guidance.

25.7302-90 Foreign military sales (FMS) guidance.

(a) See PGI 25.7301 concerning an exception to free on board (f.o.b.) origin shipping terms.

25.7307-90 Solicitation provisions and contract clauses.

(a) Use clause 52.247-9034, Point of Contact for Transportation Instructions, in solicitations/contracts with FMS line items.

SUBPART 25.74 – DEFENSE CONTRACTORS OUTSIDE THE UNITED STATES

(Revised July 1, 2013 through PROCLTR 2013-56)

25.7401 Contracts requiring performance or delivery in a foreign country.

25.7401-90 Policy.

(a) When contracting for requirements for delivery to or performance in an area outside the United States, contracting officers shall comply with all current requirements in DFARS and DFARS PGI Subpart 225.74. Delegations for Theater Business Clearance (TBC) have been rescinded. DoD contracting officers are required to use the Joint Contingency Contracting System Platform module (see DFARS PGI 225.7401) to submit TBC requests in the designated TBC countries.

(b) A TBC request should be prepared for modifications, including option exercises. Significant administrative or no cost modifications also require a TBC request, for actions including, but not limited to: adding or reducing people, allowing or changing the number of armed personnel, changing delivery dates, adding or changing products or services in theater.

25.7402 Contractor personnel authorized to accompany U.S. armed forces deployed outside the United States.

25.7402-3 Government support.

(e) See DFARS 225.7402-3 and DFARS PGI 225.7402-3(e) and 225.7402-5 for current requirements for the Synchronized Predeployment and Operational Tracker (SPOT).

SUBPART 25.75 – BALANCE OF PAYMENTS PROGRAM

25.7501 Policy.

(c) The public interest determination shall be made by the Director, DLA Acquisition (J7). Requesting activities shall submit their request in the form of a proposed D&F to DLA HQ, attention: J72. Include the rationale for the determination as well as all relevant facts.

SUBPART 25.77 – ACQUISITIONS IN SUPPORT OF OPERATIONS IN IRAQ OR AFGHANISTAN

(Revised July 1, 2013 through PROCLTR 2013-56)

25.7703 Acquisition of products or services other than small arms.

25.7703-2 Determination requirements.

(b)(2)(ii)(A) For any determination that applies to an individual acquisition with a value of $85.5 million or more or to a class of acquisitions, provide the package requesting CAE approval to DLA HQ J72 at least 10 working days prior to the projected date for issuing the solicitation. This also applies to individual acquisitions below $85.5 million for activities without a supply chain HCA. The DLA competition advocate shall also review the determination. The package shall contain:

(1) Memorandum or staff summary sheet from the supply chain HCA (CCO for activities without a supply chain HCA) requesting approval and reflecting local coordination, including by the servicing Office of Counsel and local competition advocate.

(2) Draft determination and finding, following prescribed format in mandatory DFARS PGI 225.7703-2(c)(iii). See PGI 225.7703-4 Reporting requirement.

SUBPART 25.78 - ACQUISITIONS IN SUPPORT OF GEOGRAPHIC COMBATANT COMMAND’S THEATER SECURITY COOPERATION EFFORTS

(Revised October 18, 2012 through PROCLTR 2013-01)

25.7801-90 Procurement and contracting support of theater security cooperation efforts.

(a) General.

This section provides internal DLA mandatory policy and guidance to all DLA contracting officers who may award a contract purchase orders, or blanket purchase agreements with performance requirements in the Central Command (CENTCOM) theater of operations to a non-U.S. company. The purpose is to ensure that DLA contracts, to be performed in the CENTCOM Theater of Operations, comply with CENTCOM and other DoD policy

(b) Applicability.

All DLA contracting officers who award contracts, purchase orders, or blanket purchase agreements with performance requirements in the CENTCOM Theater of Operations to a non-U.S. company, or to a contractor that may use a non-U.S. company as a subcontractor, shall be subject to the requirements and procedures of this section.

(c) Vendor registration and vetting.

Reference is made to CENTCOM Joint Theater Support Contracting Command (C-JTSCC) acquisition instruction (AI) dated 1 September 2011, paragraph 25.7704-120 Vendor Vetting (Iraq and Afghanistan) (unclassified). See mandatory procedures in PGI 15.7801-90 (c) concerning vendor registration and vetting.