# 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.

- 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 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

- 25.7301 General.

- 25.7307-90 Contract clause.

- 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

- 25.7702-90 Procurement from Expanded Northern Distribution Network Countries.

- 25.7703 Enhanced authority to acquire products or services from Afghanistan.

- 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

(Revised December 13, 2013 through PROCLTR 2014-40)

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 Exceptions.

SUBPART 25.73 – ACQUISITIONS FOR FOREIGN MILITARY SALES

25.7301 General.

25.7307-90 Contract clause.

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

25.7702-90 Procurement from Expanded Northern Distribution Network Countries.

25.7703 Enhanced authority to acquire products or services from Afghanistan.

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)(i) Prepare nonavailability determinations in a determination and findings (D&F) form.

(b)(1)(i)(C) For contracting offices where the Director, DLA Acquisition (J7) is the HCA, submit waiver requests to DLA HQ, attention: J72.

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

25.802-71-90 End Use Certificates.

(a) 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.)

(b) For Military Service managed items at Depot Level Repairable (DLR) and Supply Storage and Distribution (SS&D) 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) 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 25.802-71-90(d)-(g).

(d) Category I EUCs. The Director, DLA may authorize and sign a Category I EUC or authorize the Category I EUC and then delegate signature to the Component Acquisition Executive to sign the individual EUC. Contracting officers should provide the request to J7 for a signed Category I EUC no less than 30 days before it is needed.

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

(1) The Director, DLA must determine that, notwithstanding any use of transfer limitations, the purchase of the item is in the U.S. national interest. 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. Provide the package requesting approval of a Category II EUC to J7 no less than 60 days before it is needed.

(2) Category II EUCs require a minimum of 21 days advance notification to the Office of the Under Secretary of Defense (OUSD)(AT&L), which may coordinate with the U.S. Department of State. OUSD(AT&L) will notify DLA Acquisition J72 of any further action required before final authorization of the EUC. Otherwise, concurrence can be assumed after expiration of the 21-day period. After the 21-day period or receipt of concurrence by OUSD(AT&L), whichever comes first, the Director, DLA may authorize and sign the “Declaration of End Use” or authorize execution of the individual EUC and then delegate signature to the Component Acquisition Executive.

(f) Category III EUCs.

(1) It is mandatory that contracting offices discuss how these restrictions on possible transfer will be met in the memorandum to DLA Acquisition J72 requesting the waiver and in the Executive Summary.

(i) If required and necessary, the contracting office may prescribe mandatory labeling, training of customers, and/or certifications from requiring activities that would make a prior approval requirement highly visible to the customer.

(ii) If DLA cannot ensure that there is a process in place, OUSD may not approve the waiver and/or the Director, DLA may not authorize the EUC.

(iii) Once the waiver is approved, DLA Acquisition J72 will prepare the Category III EUC for approval by the Director, DLA, who may sign or direct the Component Acquisition Executive to sign the individual EUC.

(2) The Military Service Secretaries and the Directors of Defense Agencies are prohibited from approving EUCs in this category. Only OUSD may grant a waiver to this prohibition, authorizing the Director, DLA to issue the Category III EUC.

(3) The approved waiver from OUSD(AT&L) authorizes the agency to execute an EUC with the requesting government for the specific acquisition. The Director, DLA can 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 multi-year or multiple year contracts) under the resulting EUC would not necessitate a further EUC. DLA contracting offices should specify whether the procurement involves a multi-year contract or task/delivery orders in the package for OSD consideration.

(g) Requests to DLA Acquisition (J7) for EUCs shall show coordination through appropriate contracting office command levels to include supply/demand planning, Office of Counsel, HCA or equivalent, and shall be signed by the Commander or Director.

(1) Requests for Category I or Category II EUC authorization or for a waiver for Category III will include:

(i) Memorandum to J7 requesting authorization of the Category I or Category II EUC or a memorandum requesting a Category III waiver from the OUSD;

(ii) Executive summary;

(iii) Draft request for Category I or II EUC authorization for Director, DLA to approve; or

(iv) Draft request for Category III waiver for Director, DLA to approve.

(2) J72 will process EUC requests or waivers and coordinate within DLA, to include J3, DG, and J71. J71 will provide copies of signed EUCs in any of the categories to the appropriate office within OUSD.

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 DFARS PGI 225.903(b)(i)(A)(2).

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

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) Proposed waivers of this restriction will be processed using the format, content, and procedures prescribed for domestic nonavailability determinations under the Berry Amendment, modified to reflect that the waiver relates to the restriction in 10 U.S.C. 2534(d). DLA Acquisition (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 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 contracting office 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.

(b) Procedural guidance.

(1) The Director, DLA is authorized to make a domestic nonavilability determination (DNAD) that will allow purchase of a covered. Specialty metals are subject to a separate domestic sourcing restriction contained in 10 U.S.C. 2533b, and nonavailability determinations for specialty metals require USD(AT&L) approval.

(2) When a contracting office has a requirement for an item covered by the Berry Amendment for which no exception exists, it cannot be bought unless a DNAD is approved. Formal DNAD requests must be submitted to DLA Acquisition J72. Contracting offices must first route DNADs through local coordination and review channels. J7 will review the DNAD request, obtain appropriate coordination, and, if appropriate, forward it to the Director, DLA for approval. The contracting office should submit the entire DNAD package, including the completed Service certifications (see DFARS 225.7002-2(b)(2)(ii)), at least two months before it is needed. Also, if the domestic non-availability is anticipated to be permanent and no alternatives are possible, the contracting office should separately prepare a corresponding FAR case for a permanent waiver request to add the item to FAR 25.104, Nonavailable Articles, and include reference to that case in the determination and finding document, and the report and recommendation of the contracting office. As described in more detail below, a DNAD package consists of the following documents: report and recommendation of the contracting office Commander or Director; letters to the requiring activities with alternatives; executive summary; determination and findings;; written, certified responses from the requiring activities; written, certified responses from the requiring activities; and warstopper analysis.

(3) Report and recommendation of the contracting office Commander or Director. This document should be signed by the Commander or Director of the contracting office (or individual acting in that capacity). The report and recommendation will be prefaced by an executive summary of the facts and recommendation. The report shall (in reasonable detail):

(i) Identify the articles or items (or class of items, if applicable) being procured and their domestic availability status.

(ii) Explain whether any Berry Amendment exceptions are applicable and, if they are, explain why they are not adequate to support the requirement.

(iii) Identify the total quantity (including readiness quantities) to be procured and length of time the waiver is needed (e.g., period of contract performance).

(iv) Specify if the DNAD is to be retroactive and, if it is, provide the factual basis and the timeframe for retroactive application.

(v) Address the DEPSECDEF requirement in DFARS 225.7002-2(b)(2) that the contracting office analyze alternatives not requiring a Berry Amendment waiver, and the customers’ certified written responses that domestic alternatives are not a satisfactory substitute for the requirement.

(vi) Clearly specify any limiting criteria for use of the requested DNAD, such as restricted to a particular contracting program, weapon system, time period, or other condition. DNAD determinations should generally not be limited to a particular garment or item so as to preclude use in a similar garment or item, if the market research and nature of the requirement demonstrate that the nonavailable item or material can reasonably be determined nonavailable for similar garments or items.

(vii) Describe the supply and procurement situation; the contractor’s commercial practices; any special or unusual circumstances; results of market research conducted and constraints, if any; the reasonable conclusions drawn; and exchanges between Engineering Support Activities (ESAs) and customers concerning the possible existence of alternative items that do not require a Berry Amendment waiver. Attach copies of market research related documents and any other records, and letters from contractors that explain why they are unable to either obtain the product domestically or identify the source of their product or components (more relevant for prime vendor procurements), as appropriate.

(viii) Discuss potential political ramifications, Congressional involvement, morale issues, small business concerns, mission failure, troop support issues, etc., as appropriate. The discussion must include a procurement impact statement that describes the outcome if the DNAD is not approved.

(ix) Include a finding that the analysis of alternatives and customer’s certification that no alternatives are satisfactory is reasonable and acceptable based on the contracting office’s knowledge of the item and market research.

(x) The contracting office’s letter to the requiring activity (and all other branches of the Military Services that use the item) that (1) advises that the required item requires a waiver to the Berry Amendment; and (2) describes alternatives that do not require a waiver under the Berry Amendment.

(xi) The requiring activity’s written response (and written responses from other branches of the Military Services that use that item, as applicable), certifying that the proposed alternatives and any other known alternatives not requiring a Berry Amendment waiver are unacceptable and explaining why they are unacceptable. The responses must be signed by an individual with the authority to approve use of an alternate item for the Military Service(s).

(4) Warstopper analysis. Prior to submitting the DNAD request, ensure an analysis was conducted on the item to determine if the item is a candidate for a Warstopper investment that would result in obtaining domestic availability. Include with the package, even if it did not receive further approval from Acquisition J74 to proceed as a Warstopper project, a clear statement that the item has or does not have wartime demand or Military Service identified war reserve material requirements and a statement by the Chief of the Industrial Base group that the item has or does not have a reasonable opportunity to implement an industrial base measure that meets the requirements found in the Industrial Capability Program – Warstopper Program Management issuance, program description and approval document. The requestor of the DNAD shall also conduct follow-on discussions with J74 concerning the feasibility of a warstopper project that could serve to limit the duration of the DNAD’s use.

(5) The contracting office will include coordination by the HCA or equivalent and Chief Counsel with the package. Upon receipt of the Commander’s report and recommendation, DLA Acquisition J72 will assemble the DNAD package for DLA Senior Procurement Executive’s (SPE) submission to the Director, DLA. DLA Acquisition J72 will staff the DNAD package for coordination with DLA Acquisition Policy Division (J71), Acquisition Programs and Industrial Capabilities Division (J74), DLA Office of Small Business Programs (DB), and DLA Office of General Counsel (DLA-DG), and process for SPE signature to transmit it to the Director, DLA.

(6) Once the SPE signs the DNAD package, it will be forwarded to the Director, DLA. The Director, DLA will approve or disapprove the DNAD request and advise the DLA SPE of the decision. The SPE will then advise the contracting office of the decision. J71 will provide a copy of each approved DNAD to USD(AT&L) within 10 days of receiving the determination.

(7) Each contracting office that has been granted a domestic non-availability determination (DNAD) is required to annually report to DLA Acquisition 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.

(c) Minimizing Berry Amendment or specialty metals violations.

(1) DLA contractors are becoming aware of the increased attention and visibility that the Berry Amendment domestic source restrictions are receiving, and of the restrictions imposed by this statute, and the DFARS implementing guidance. This heightened awareness has resulted in a number of contractors notifying DLA of their violation of this statute and requesting DLA grant a “waiver.”

(2) Identification of potential violations after contract award.

(i) Once aware of a violation, DLA is presented with the challenge of not accepting the non-conforming end item(s) pending waiver consideration in order to ensure no Anti-Deficiency Act (ADA) violation occurs. This not only can result in delayed delivery to the customer, it also may place the contractor in an untenable financial position.

(ii) To minimize the impact, the affected contracting office must quickly analyze the market to verify that no domestic source is available and prepare a DNAD. In this situation, contracting officers must ensure that any DNAD requested is for the minimum time frame needed (but not exceeding the maximum reasonable time period needed) for a contractor or industry to become compliant, if it found that the contractor was unaware of the requirement, but once made aware, can comply with a domestic source within a suitable start-up period.

(3) The following preaward steps should serve to minimize potential Berry Amendment or specialty metals violations after contract award. While the potential use of the suggestions below may depend on the size and complexity of the procurement, the suggestions provide a guide for use.

(i) Pre-proposal conference. If a Berry Amendment or specialty metal covered item is to be procured and a pre-proposal conference held, the domestic source restrictions should be highlighted to the attendees. This highlights the importance to the attendees, and allows for the correction of misunderstandings (e.g., different from the Buy American Act).

(ii) Full text clause inclusion. The Berry Amendment is implemented by DFARS clause 252.225-7012 (252.225-7008/7009/7010 for specialty metals are separate restrictions from Berry) and 252.225-7015 for hand or measuring tools. Many contracting offices incorporate these clauses by reference which requires the contractor to actively research the content of the clause. While it is the responsibility of the contractor to adequately understand all solicitation requirements, including the contents of 252.225-7008/7009/7010/7012/7015, the statutory background of the clause, the heightened attention compliance with the clause is receiving, and the significant difficulties non-compliance presents makes the clause an ideal candidate for full text inclusion in the solicitation.

(iii) Plain language. The development and inclusion in solicitations of “plain language” that spells out the Berry Amendment and other domestic source restrictions is a consideration. However, such language must be used with caution and must have DLA Acquisition J7approval. Subtle changes in the wording of the domestic source restrictions could be legally and contractually misinterpreted by the contractor, causing conflict with the exact requirements of the clauses at DFARS 252.225-7012/7014/7015. Any such “plain language” wording would need to have significant legal review to confirm that nothing in the developed wording modifies the requirements of the clauses. Additionally, the “plain language” should only address the part of the Berry Amendment or domestic sourcing restriction that applies to the commodity being solicited.

(iv) Mandatory discussion Item. When negotiated procurements are conducted for Berry Amendment covered items, domestic source restrictions as identified in DFARS 252.225-7012/7014/7015 should be a mandatory discussion item with the contractor. Contractors should be asked to confirm their understanding of the requirement in the documentation submitted with their final proposal revisions or other submitted documentation.

(v) Preaward surveys. If a preaward survey is required in accordance with FAR 9.106, the contracting office should consider requesting the survey to also confirm the prospective contractor’s ability to trace the origin of materials incorporated into the end product being acquired.

(vi) Evaluation factor. The contracting office can consider whether use of an evaluation factor that determines the contractor’s ability to verify the source of materials is appropriate. Additionally, such a factor should be used judiciously, considering the complexity of the manufacturing process and size of the procurement so as not to unduly burden less “at risk” procurements.

(vii) Additional considerations. The development or use of a formal contractor certification verifying compliance with the requirements of the Berry Amendment is not authorized (see FAR 1.107). If, however, there is any reason to doubt an offeror’s compliance with Berry Amendment requirements during the source selection process, the contracting officer must take steps to verify the offeror’s ability and willingness to comply, including making inquiry to the offeror and following up to ensure that offeror responses are adequate to support compliance.

(d) Post award actions relative to the domestic source restrictions of the Berry Amendment or specialty metals restriction fall into two general categories: (1) actions that may be taken to ensure continued contractor compliance during contract performance; and (2) action that should be taken once a potential violation is detected. Although it is clearly the performing contractor’s responsibility to ensure full compliance with all contract requirements, including the domestic sourcing restrictions specified in DFARS 252.225-7012/7014/7015, DLA can take reasonable steps, where appropriate, to validate the contractor’s continuing compliance. Such actions may reduce the potential for violations during performance. Violations detected during performance could result in Government non-acceptance of materials, delaying support to the warfighter, and non-payment to the contractor for the non-conforming items.

(e) Potential actions to ensure continued contractor compliance include:

(1) Domestic sourcing restrictions, especially Berry Amendment and specialty metal compliance should be a discussion item at post award conferences.

(2) The Defense Contract Management Agency (DMCA) is delegated responsibility to review, approve or disapprove, and maintain surveillance of the contractor’s purchasing system per FAR 42.302(a)(50). The contracting offices should consider requesting additional on-going DCMA emphasis of the contractor purchasing system’s ability to implement domestic source restrictions, and continuing verification of such through random records audits, etc.

(3) Prime vendor (PV) contracts present a unique challenge due to the multitude of parts and supplies that are frequently involved. The opportunity for domestic sourcing violations, particularly Berry Amendment violations, is even greater because of the commerciality of the products provided under these contracts. Contracting offices should consider developing contract provisions that require the PV contractor to periodically assess their suppliers’ compliance with Berry Amendment and other applicable domestic source restrictions. The nature and extent of the provisions would depend upon the particulars (i.e., number of items under contract, length of period of performance, extent that supplies to be provided are subject to Berry Amendment restrictions, etc.). Potential alternatives include periodic (e.g., quarterly) review of a certain percentage of total items under contract. The review could be as straightforward as the PV contractor sending the suppliers a standardized sheet explaining the restrictions of the Berry Amendment and other domestic sourcing restrictions and requiring the supplier to notify the prime contractor of any potential violation. The supplier could also be required to acknowledge receipt of the document by signing and returning it to the prime.

(f) Actions taken after contractor notification of a potential Berry Amendment or specialty metals violation:

(1) Verification. Ensure the item in question is subject to the restrictions of the Berry Amendment or other domestic sourcing restriction. Direct the contractor to positively determine the origin of the item in question.

(2) Suspend Government acceptance. The Government, in accordance with FAR 46.407, should not accept items that have non-domestic content in violation of the Berry Amendment or specialty metals restriction. Continued Government acceptance without the required DNAD could create an ADA violation under the Berry Amendment. The contracting office should consider the issuance of a stop work order pending resolution of the violation. Allowing the contractor to continue performance after notification of the violation could subject the Government to additional claimed contract costs and further exacerbate the violation.

(3) Suspend payment. The contracting office should ensure the Defense Finance and Accounting Service (DFAS) does not issue payment for non-conforming products nor make any new unauthorized progress payments pending resolution.

(4) Market research. Determine whether the item in question has a domestic source available.

(5) Substitute Product. For those items where it is subsequently determined a domestic source is not available, contracting offices should coordinate the potential use of an alternate item with the technical specification office of primary responsibility.

SUBPART 25.73 – ACQUISITIONS FOR FOREIGN MILITARY SALES

25.7301 General.

(S-90) Definitions.

“Implementing Agency” means the U.S. Military Service that is managing the FMS case. It is identified by the letter used in the first position of the requisition document number. An FMS document number will look something like these: BATA54-3028-A001 or DCNA5V-3065-0002 or PTWB54-3014-0099. The implementing agencies are B-Army: the U.S. Army Security Assistance Center (USASAC) at New Cumberland, PA; D-Air Force: Air Force Security Assistance Center Directorate (AFSACD) at Wright Patterson AFB, OH; P-Navy/K-Marine Corps: NAVSUP Weapon Systems Support (WSS) at Philadelphia, PA.

“Purchaser” means the FMS customer.

(c)(iv)(A) Shipping terms for any contract of foreign military sales (FMS) material shall be as free on board (f.o.b.) origin. (Refer to DFARS PGI 225.7301(c)(iv).) These shipping terms ensure that cargo is recognized as U.S. Government property when shipped. With appropriate consideration obtained, existing contracts that contain f.o.b. destination terms for FMS shipments may be modified to f.o.b. origin as needed to facilitate an FMS shipment.

(B) An exception granted to DLA by the Defense Security Cooperation Agency (DSCA) allows medical equipment and medical systems that the contracting officer has determined require manufacturer installation to be shipped as f.o.b. destination. The Principal Director, Strategy, Defense Security Cooperation Agency, granted an exception to DLA for these items by memorandum, Subject: Response to Request for Standard Deviation from the Free on Board (f.o.b.) Requirement, dated April 13, 2010. J7 has granted a class deviation, FARS DEV 2013-08, to implement the DSCA exception. This exception is the only current exception in DLA to the f.o.b. origin policy for FMS shipments.

(c)(vi) All FMS contracts must include the MILSTRIP document number, supplemental address, and national stock number (NSN) for each contract line item number (CLIN).

(c)(vii)(A) In order to reduce misdirected shipments of FMS materiel, the contracting officer shall ensure that shipping addresses are not in FMS contracts. Instead, place a notice in the contract requiring the contractor to contact the applicable administering agency for shipping instructions, either by contacting the Supply Chain Transportation Office Helpdesk at DLA Distribution for DLA-administered contracts or DCMA Transportation for DCMA-administered contracts as outlined in clause 52.247-9034, Point of Contact for Transportation Instructions. Contracts will not contain both DLA and DCMA as a Point of Contact for shipping instructions.

(B) Additional contract provisions may be appropriate to satisfy unique requirements for requisitions that contain a "Z" or "Y" and/or verification from the product specialist. However, do not list the freight forwarder or embassy addresses in the contract. Unique shipment requirements will be contained in the Transportation Plan as outlined in the Department of Defense (DOD) Manual 5100.38-M, Security Assistance Management Manual, Chapter C7.13.

(C) DLA Acquisition personnel are advised that under the terms of the Letter of Offer and Acceptance (LOA) negotiated with foreign governments, title transfers to the foreign government at the contractor’s loading dock, except for the exception in (c)(iv)(B).

(D) Inspection and acceptance procedures for FMS.

(1) DLA Acquisition personnel are advised that since all FMS orders will be shipped f.o.b. origin, except for those in (c)(iv)(B), acceptance and inspection shall also be performed at origin. Inspection and acceptance is at destination for (c)(iv)(B). The contracting officer may authorize a Certificate of Conformance (CoC) from the supplier for FMS orders as being in the best interest of the Government. (See 46.390 and 46.392 regarding certificates of conformance.) Certificates of Conformance, when authorized by the contracting officer, shall be required of suppliers for each FMS line item being shipped. The CoC is included with the inspection receiving report and accompanies the shipment.

(2) See also 46.601-91 and the prescribed clause, 52.246-9020, Distribution of Material Inspection and Receiving Report, to be included as applicable in the contract.

(i) The clause requires the contractor to include hard copies of the Department of Defense (DD) Form 250, Wide Area Work Flow Receipt and Acceptance (WAWF-RA) Receiving Report in the exterior and interior shipping documentation for each package being shipped.

(ii) Alert suppliers of this requirement, as FMS orders without the hard copy shipping documentation are frequently delayed or detained.

(iii) For suppliers who qualify for DCMA’s Alternate Release Procedures (ARP) or other risk-based surveillance procedures, acceptance will be accomplished by the electronic signature of the DCMA quality assurance representative on the electronic DD 250 form found in Wide Area Work Flow.

(iv) For suppliers who do not qualify for ARP or other risk-based surveillance procedures, DCMA will perform inspection/acceptance manually, if needed.

(E) Acquisitions procured offshore (procurements awarded to outside contiguous United States (OCONUS) suppliers).

(1) DLA acquisition personnel, in accordance with the Security Assistance Management Manual, C.3.3.4.3 and C.7.19, must notify the implementing agency of any material procured offshore within three weeks after source identification. The implementing agency (see definition), which can be identified by the letter used in the first position of the requisition document number, is the U.S. Military Service that is managing the FMS case. The FMS cell in any of the contracting offices can provide contact information for the implementing agencies. Points of contact can also be found in the Defense Transportation Regulation, Part II, Cargo Movement, Appendix E, Table E-1: http://www.transcom.mil/dtr/part-ii/dtr_part_ii_app_e.pdf. If the LOA permits, the purchaser may, for logistics reasons, request that the procurement be made from a contiguous United States (CONUS) source; the implementing agency will notify DLA of the purchaser’s decision.

(2) Notice of Availability (NOA). If the procurement is made from an offshore vendor, the contract administrator must send a Notice of Availability, DD 1348-5, to the appropriate notice of availability address listed in the Military Assistance Program Address Directory (MAPAD). (See https://www.transactionservices.dla.mil/daashome/mapad.asp.) Based on the Notice of Availability, the purchaser or its freight forwarder may direct movement of the materiel to an offshore facility in the same region as the materiel’s origin or to the freight forwarder’s facility in the CONUS. The purchaser is responsible for the cost of the movement to the CONUS freight forwarder, all export and/or import licenses, and customs clearance requirements imposed by the materiel’s country of origin and the United States Government.

25.7307-90 Contract clause.

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

SUBPART 25.74 – DEFENSE CONTRACTORS OUTSIDE THE UNITED STATES

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.

(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, and 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 contracting offices shall submit their request in the form of a proposed D&F to DLA Acquisition 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

25.7702-90 Procurement from Expanded Northern Distribution Network Countries.

(a) General. This section provides DLA policy concerning procurement of supplies and services from certain Northern Distribution Network (NDN) countries (“expanded NDN countries”) that are not included in the special acquisition authorities authorized by Section 841 of the National Defense Authorization Act, 2013 (P.L. 112-239). These expanded NDN countries include Estonia, Latvia, and Lithuania, as well as other non-section 841 countries that may be added to the NDN.

(b) Procurement policies. Contracting officers responsible for requirements supporting operations in Afghanistan, including requirements indirectly supporting operations, such as transportation, fuel, and other items or services for use in the CENTCOM AOR outside of Afghanistan, shall:

(1) Include an evaluation factor relating to use of expanded NDN country sources in solicitations for such requirements; the contracting officer may waive use of the evaluation factor when market research substantiates that the requirement being solicited is not available from expanded NDN country sources; and

(2) When practicable, request existing contractors to use expanded NDN country sources in providing supplies or services and, if appropriate, require existing contractors to use expanded NDN country sources in providing supplies or services. It is appropriate to require use of expanded NDN country sources if the limitations and guidance in (c) are satisfied and the contractor will agree to use these sources without change to the contract price, or the negotiated change to the contract price can be determined fair and reasonable.

(c) Limitations and guidance.

(1) Afghan, Central Asian States, Pakistan, and South Caucasus sources subject to Section 841, as implemented in DFARS Subpart 225.77 and OSD Deviation 2013-O0007, have priority over expanded NDN country sources.

(2) Prices of expanded NDN country products and services must be determined fair and reasonable, including when procured through existing DLA contractors. Contracting officers are authorized to consider the benefits accruing to the U.S. Government from using expanded NDN country sources, including goodwill and potentially lower transportation costs in these countries, in making the fair and reasonable price determination. Contracting officers are also authorized to consider the overall cost to the Government associated with procuring the supplies and services from other sources, such as transportation costs, whether or not included in the contract price. Contracting officers are authorized to waive contract requirements for competitive subcontract-level sourcing if necessary to allow the prime contractor to source from expanded NDN country sources.

(3) Estonia, Latvia, and Lithuania are designated countries for purposes of Trade Agreements Act compliance. If additional countries are subsequently added to the expanded NDN countries, contracting officers will need to determine their Trade Agreements Act status when the Trade Agreements Act is applicable to the requirement.

25.7703 Enhanced authority to acquire products or services from Afghanistan.

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 Acquisition 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 contracting offices without an HCA. The DLA Competition Advocate shall also review the determination. The package shall contain:

(1) Memorandum or staff summary sheet from the HCA (or CCO for contracting offices without an 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

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 order, or blanket purchase agreement 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 the most recent version of the CENTCOM Joint Theater Support Contracting Command (C-JTSCC) acquisition instruction (AI) on Vendor Vetting (Iraq and Afghanistan) (unclassified).

(1) The contracting officer shall ensure that all solicitations and resulting contracts with performance requirements in the CENTCOM Theater of Operations shall include written notice that all non-U.S. offerors, and all proposed non-U.S. subcontractors, must be registered online at the Joint Contingency Contracting System (JCCS) website in order to be eligible for award.

(i) Contracting officers issuing a solicitation for contracts with performance requirements in the CENTCOM theater of operations must register for an account in JCCS and must complete system training requirements prior to release of the solicitation. Instructions for account registration and training can be found online at http://www.jccs.gov.

(ii) Prior to the award of any contract with a performance requirement in the CENTCOM theater of operations to a non-U.S .company, the contracting officer shall use the information obtained from JCCS to assist in conducting a responsibility determination of the company in accordance with FAR Part 9.

(A) In accordance with FAR 9.104-4, the contracting officer may directly determine a prospective subcontractor’s responsibility. DLA contracting officers shall use the information obtained from JCCS to assist in conducting a responsibility determination for all non-U.S. subcontractors being proposed by prime contractors in responses to solicitations with performance requirements in the CENTCOM theater of operations.

(B) Information from JCCS shall be used to assist the contracting officer in determining whether a contractor meets the general standards outlined for responsibility found in FAR 9.104-1, and shall not be used to establish undisclosed evaluation award criteria.

(2) The contracting officer should proceed to award the contract when he/she is able to make a determination that a prospective contractor is presently responsible and information received from JCCS supports such a determination (i.e., C2X approved). Information received from JCCS to support the award determination shall be included in the official contract file with the contracting officer’s determination of responsibility.

(3) The contracting officer shall withhold award of a contract to a prospective contractor and coordinate with DLA Acquisition J72 when information from JCCS does not support a finding that a prospective contractor is presently responsible or when a prospective contractor, or its subcontractor, has not registered in JCCS (i.e., not sent to C2X, C2X rejected, or sent to C2X). When communicating on this matter, extreme care shall be taken not to discuss specific details over non-secure means.

(4) If the contracting officer determines the need to pursue additional vetting, then the following steps will be taken:

(i) Request for expedited vetting:

(A) After ensuring all required vendor data has been entered into JCCS, the contracting officer will immediately alert their assigned DLA Acquisition J72 analyst and DLA DI (NiPR email: diacounterintelligence@dla.mil) before forwarding requests for expedited vetting. The assigned DLA Acquisition J72 analyst, after consulting with DLA HQ DI, will instruct the contracting officer on how to submit the request (specific email addresses) and recommend an appropriate security classification in accordance with Department of Defense Instruction (DODI) 5200.01.

(B) The request includes either initially urgent requests or normal requests that become urgent. A request is considered urgent when the customer informs the contracting officer in writing that a delay will cause severe operational impacts outweighing the risk of awarding to a potential rejected contractor.

(C) Once the request is received, the DLA Acquisition J72 analyst and DLA DI representative will consult with the Senior Contracting Office – Afghanistan (SCO-A) vetting representative to ascertain the criticality of the requirement.

(1) If all concur, the DLA Acquisition J72 analyst will forward the request to the Director, DLA Acquisition (J7) for coordination before officially submitting to the SCO-A vetting representative.

(2) If not, then the DLA Acquisition J72 analyst and DLA DI representative will contact the contracting officer to discuss and determine whether additional information is needed and/or the request cannot be forwarded to SCO-A at the present time.

(D) Request for re-vetting or re-assessment:

(1) In the event the apparently successful offeror or contracting officers become aware of any contractors or subcontractors on existing contracts that have been vetted and are given “rejected” eligibility, the contracting officer will immediately contact their assigned DLA Acquisition J72 analyst. Being careful not to disclose sensitive or classified information, the contracting officer will convey the facts he/she would like to discuss (e.g., “a C2X rejected vendor associated with [provide solicitation number or name of acquisition]”). The DLA Acquisition J72 analyst will set-up and schedule a secure means to communicate with the contracting officer and gather additional information.

(2) The assigned DLA Acquisition J72 analyst will contact DLA DI and the SCO-A vetting representative to confirm the apparently successful offeror is rejected. If time permits, the DLA Acquisition J72 analyst or DI may request U.S. CENTCOM re-assess the rejected vendor. Re-assessments normally take at least 90 days to complete.

(3) Once the rejection is confirmed, the assigned DLA Acquisition J72 analyst will coordinate with the contracting officer, DLA DI, General Counsel, and other concerned offices as required, to schedule a secure conference to discuss the matter.

(4) The contracting officer will file the request(s) in the official contract file.

(5) The contracting officer will have the following information ready to discuss as a minimum:

(i) Executive overview of the program and acquisition;

(ii) Brief history of the competition; and

(iii) The desired outcome, for example, either pursuing an exception to policy or awarding to the next apparently successful offeror with a C2X approved rating, along with justification supporting the position.

(6) The contracting officer will carry out the action decided at the meeting with the assistance, as needed, of DLA Acquisition J72 analysts and DLA DI, and document the file accordingly, to include documentation of requests.

(5) Applicable clauses.

(i) The following clauses are to be incorporated into solicitations and contracts with an estimated value of more than $100,000 that are being, or will be, performed in the U.S. Central Command Theater of Operations. This requirement applies to all such contracts that will be awarded on or before December 31, 2014.

(A) DFARS 252.225-7993, Prohibition on Contracting with the Enemy in the United States Central Command Theater of Operations (DEVIATION 2012-O0005) (JAN 2012).

(B) DFARS 252.225-7994, Additional Access to Contractor and Subcontractor Records in the United States Central Command Theater of Operations (DEVIATION 2012-O0005) (JAN 2012).

(6) Reporting requirements.

(i) Sections 841(e) and 842(b) of the fiscal year (FY) 2012 National Defense Authorization Act (NDAA) require the Secretary of Defense to submit a report of the use of these authorities each year, no later than March 1, in calendar years 2013, 2014, and 2015. Department of Defense (DoD) components shall submit their information to Defense Procurement and Acquisition Policy (DPAP) for a departmental report.

(A) DLA Acquisition J71 will consolidate the reporting information for submission by J7 to DPAP.

(B) Each contracting office shall submit the following information to DLA Acquisition J71 by January 15, in calendar years 2013, 2014, and 2015. Once all responses are received, J7 will submit a consolidated enterprise response not later than February 1 in calendar years 2013, 2014, and 2015.

(ii) Reporting period and due dates: Reports are to be submitted to DPAP covering each of the periods:

(A) January 1, 2012 - December 31, 2012 - due to DPAP not later than January 31, 2013.

(B) January 1, 2013 - December 31, 2013 - due to DPAP not later than January 31, 2014.

(C) January 1, 2014 - December 31, 2014 - due to DPAP not later than January 31, 2015.

(iii) The reports will contain the following information:

(A) Section 841: The number of instances in which this authority was exercised to restrict, terminate, or void contracts, grants and cooperative agreements, and the basis for the actions taken for each instance.

(B) Section 842: The number of instances in which this authority was exercised to examine records. The basis for the action taken for each instance and a summary of the results of any examination of records so undertaken.

(iv) Reporting format: Reports are to be submitted to DLA Acquisition J71 as a Microsoft Word document and contain the following:

(A) The reporting period.

(B) Instances in which the authority was exercised during reporting period with the following information:

(1) Contract number and value of each instance;

(2) Description of action taken for each instance; and

(3) Results of action taken for each instance.

(v) DLA Acquisition J71 will consolidate the information into a single report and add the official cover letter to be signed by the Director, DLA Acquisition.