ACQ120 Fundamentals of International Acquisition
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Lesson 12 - Contracting and International Acquisition
Lesson Introduction
• Non- u.s. Sources and Domestic Preferences
• Reciprocal Defense Procurement Agreements
• Contracting for Foreign M:ilitary Sales (FMS) and
International Cooperative Programs
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Long Description
Henry Ranquist, IA mentor, standing next to a whiteboard showing three bulleted items:
Non-U.S. Sources and Domestic Preferences, Reciprocal Defense Procurement Agreements, and
Contracting for Foreign Military Sales (FMS) and International Cooperative Programs.
CC Text
Henry Ranquist: Welcome to Lesson 12, Contracting and International Acquisition. In this lesson, we’ll
discuss international contracting considerations including procurement from non-U.S. sources, U.S.
domestic preferences, and reciprocal agreements. We will also discuss contracting for Foreign Military
Sales (FMS) and International Cooperative Programs.
ACQ120 Fundamentals of International Acquisition
l esson 12- Contracting and International Acquisition
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lesson Obj ectives
Upon complet ion of t his lesson you will be able t o:
• Identify major U.S. domestic preference legislation that limit DoD's ability to contract with
non-U.S. sources
• Identify the purpose of Reciprocal Defense Procurement Agreements
• Identify the purpose of Government Quality Assurance Agreements
• Describe the role of the contracting officer in Foreign Military Sales ( FMS) contracting
• Describe the process to authorize sole source contracts for FMS
• Describe FMS customer participation in FMS contracting
• Describe major contracting considerations on International Cooperative Programs
• Distinguish offsets from workshare including DoD's position on each
This lesson will t ake approxi m a t ely 90 min utes t o complet e.
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ACQ120 Fundam entals of International Acquisitio n
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Lesson 12 - Contracting and International Acquisition
Contracting with Non-United States Sources Introduction
Most DoD equipment is procured from domestic
sources. However, the DoD also makes use of a
worldwide supplier base.
These are the key considerations for contracting
with non-u.s. sources:
• Globalization has made more equipmen t and
services available from non -U.S. sources
• Non -U. S. sources expec t to compete in a
system where full and open competition is the
standard
• A DoD procurement objective is t o obtain the
best value to the warfighter and the U.S.
taxpayer
• Foreign conb'actor access to the U.S. defense
market is complicated by laws and oolicies
that prevent or discourage use of non-u.s.
products or services
•
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Globalization
Globalization of defense technology and the industrial base as well as U.S. overseas contingency
operations have resulted in the DoD relying more on non-U.S. sources than in the past.
These sources compete for DoD business and play a significant role as prime contractors, subcontractors,
and vendors.
Laws and Policies
DoD has to address several laws and national policies which have been designed to ensure that goods and
services purchased by the government are of U.S. domestic content. While these laws and policies have
their rationales, they also provide challenges to defense procurement personnel seeking to obtain the best
goods and services the world-wide supplier base has to offer.
Learn More
Select the link to learn more about international contracting.
ACQ120 Fundamentals of International Acquisition
lesson 12- Contracting and International Acquisition
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limitations on Non- United States Sources
Select each scene for more information.
Scene 1
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Scene 1 Can you tell me more about the laws and policies that restrict use of foreign sources?
Scene 2 Sure, well foreign contractor access to the U.S. defense market is complicated by many laws and
policies that prevent or discourage DoD use of non-U.S. products. For example, the Buy American Act, the
Berry Amendment restrictions, and the Small Business Act preferences do not always allow non-U.S.
entities to perform U.S. defense work.
Scene 3 Are these the only restrictions on non-U.S. products?
Scene 4 Actually, there are other restrictions such as the national disclosure policy and the U.S. export
control regimes which require specific U.S. Government authorizations before release of certain
information and technology.
Scene 5 Wow, this must create a challenge for DoD acquisition officials who must try to deal with these
laws and policies?
Scene 6 Yes, definitely! DoD acquisition officials have to be cognizant of these laws and policies while at
the same time attempting to foster international contracting opportunities.
Scene 7 Who can I turn to for help in this area?
Scene 8 Well, the primary responsibility for meeting this challenge is the Defense Procurement and
Acquisition Policy (DPAP) Contract Policy and International Contracting (CPIC) Directorate. Suggest you
visit this office's web site as it contains a wealth of information.
ACQ120 Fundam entals of International Acquisitio n
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lesson 1 2 - Contracting and International Acquisition
United States Domestic Preference legislation
u.s. law has encouraged procurement from domestic
sources for many years.
• u.s. sources may not always provide the best
value to the warfighter and U.S. taxpayer
Buy American Act
• Complying with u.s. domestic preference laws
while seeking bes t value solutions to meet
warfigh ter needs can pose challenges to DoD
acquisition workforce personnel
• Addressing the legal restrictions must be
care fully managed
These are examples of domestic preference legislation :
• The Buy American Act {BAA)
• The Berry Amendment
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Did You Know
In many cases, U.S.-only sources might not provide the best value for the warfighter and U.S. tax-payer.
Sometimes the DoD is challenged in dealing with non-U.S. sources because of the Buy America Act and
the Berry Amendment, but sometimes, specific limitations are placed in annual federal appropriations bills
which promote the purchase of certain U.S. goods and restricts certain procurements to U.S. sources.
Although we think of this as a U.S.-unique phenomenon, other countries often have similar restrictions.
ACQ120 Fundamentals of International Acquisition
Lesson 1 2 - Contracting and Inte rnational Acquisition
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Domestic Preference.s Buy American Act
Purpo se
Requirements
Restrictions
The Buy American Act ( BAA) was passed by U.S.
Congress in 1933.
The BAA purpose is to provide preferential treatment for
domestic sources ( for public use) of:
• Unmanufactured articles
• Manufactured goods
• Construction material
The BAA has important:
• Requirements
• Restrictions
• Exceptions
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Learn More
Select the link to learn more about the Buy American Act.
Requirements
The BAA requires the federal government to purchase domestic supplies for use in the United States, if:
• The supply contract exceeds the micro-purchase threshold (currently $3000)
• The supply portion of a contract for services that involves the furnishing of supplies exceeds the
micro-purchase threshold
The geographic location where the mining, production, or manufacture occurs is the key controlling factor
in determining what are considered to be "domestic goods."
The BAA has separate provisions for supply contracts and construction contracts and applies to small
business set-asides.
Restrictions
The BAA restricts the purchase of supplies that are not domestic end products.
The BAA uses a two-part test to define a domestic end product:
1. The article must be manufactured in the United States.
2. The cost of domestic components must exceed 50 percent of the cost of all the components.
Exceptions
Under certain conditions there are allowable exceptions to the restrictions of the BAA for federal and/or
DoD procurements.
• Public Interest
If domestic preference would be inconsistent with the public interest.
•
Non-availability
If articles, materials, or supplies are not mined, produced, or manufactured in the U.S. in sufficient
and reasonable available commercial quantities.
•
Unreasonable Costs
If purchasing the material domestically would burden the government with an unreasonable cost.
•
Resale
If the foreign end products are specifically for commissary resale.
•
Information Technology
If they are commercial items.
Did You Know
Exceptions that allow the purchase of a foreign end product are contained in the Federal Acquisition
Regulation (FAR 25.103) and Defense Federal Acquisition Regulation Supplement (DFARS 225.103).
ACQ120 Fundamentals of Internatio nal Acquisition
Lesson 1 2 - Contracting and International Acquisition
Domestic Preferences Berry Amendment
The Berry Amendment was passed by Congress to
protect U.S. industry and had its origin in the 1941
Appropriations Act.
The Berry Amendment ( 41 U.S.C. 2533a) requires DoD
to give preference to domestically:
• Grown
• Reprocessed
• Reused
• Produced items related to :
o Food
o Textiles ( clothing, threads, fabrics )
o Hand or measuring tools
•
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Learn More
Select the link to learn more about the Berry Amendment.
Restrictions
The Berry Amendment restricts purchase of the articles or items, unless items have been grown,
reprocessed, reused, or produced in the United States.
These article or items are restricted from purchase:
• Food
• Clothing, materials, and components normally associated with clothing (e.g. zippers, steel toes in
boots)
• Tents, tarpaulins, or covers
• Cotton and other natural fiber products
• Woven silk or woven silk blends
• Spun silk yarn for cartridge cloth
• Synthetic fabric or coated synthetic fabric
• Canvas products
• Wool
• Any item of individual equipment (Federal Supply Class 8465) (e.g. parachutes, upholstery on
aircraft seats, cloth filters, seat belts)
Restrictions apply to funds appropriated or otherwise made available to DoD.
However, each of these restrictions are specific and are accompanied by certain exceptions in the DFARS.
There are also special rules for small business and several other restrictions that must be considered.
Funding to Another Agency
The Berry Amendment also applies when DoD provides funding to another agency to buy items.
This means that other federal agencies (including buying activities spending funds on behalf of Foreign
Military Sales (FMS) customers) must also comply with the Berry Amendment.
For example, buying uniform items or hand and measuring tools from the General Services Administration
(GSA).
Did You Know
Violation of the Berry Amendment would generally result in violation of the Anti-Deficiency Act (ADA) (31
U.S.C. 1341).
ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 PR INT 1 HELP
Lesson 1 2 - Contracting and International Acquisition
Other Domestic Preferences
Other domestic preferences include certain
restrictions (as well as exceptions) such as:
• Acquisition of:
o Anchor and mooring chain
o Ball and roller bearings
o Specialty metals
o Supercomputers
• Construction or repair of vessels in foreign
shipyards
• Military construction and overseas architect­
engineer services
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Did You Know
Each of these restrictions has specific language and exceptions and the DFARS describes and delineates
specific solicitation provisions and contract clauses for each type of restriction.
ACQ120 Fundam entals of International Acquisitio n
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Lesson 1 2 - Contracting and International Acquisition
Knowledge Review
Based on the Buy American Act {BAA), for a DoD contract, the cost of
domestic components must exceed what minimum percentage of the
cost of all the components to be considered a domestic end product?
20%
~ 50%
75%
80%
Check Answer
The BAA uses a two-part test to define a domestic end product: The article must be manufactured
in the United Sta tes. The cost o f domestic components must exceed 50 percent of the cos t o f all
the components.
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ACQ120 Fundam entals of International Acquisitio n
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Lesson 1 2 - Contracting and International Acquisition
Knowledge Review
What regulation requires the DoD to give preference to domestically
grown or produced items related to food, textiles, and tools?
Buy American Act
~ Berry Amendment
Goldwater-Nichols Act
Nunn-McCurdy Amendment
Check Answer
The Be rry Am endment requires DoD to give preference to domestically grown, or produced items
related to food, textiles, and hand or measuring tools.
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ACQ120 Fundam entals of International Acquisitio n
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Lesson 12 - Contracting and International Acquisition
Reciprocal Defense Procurement Agreements Introduction
Reciprocal Defense Procurement ( RDP} agreements
were developed to promote sta ndardization of
d efense equipment within NATO.
Congress enacted the Culver -Nunn Amendment to
the FY 1977 Defense Authorization Ac t ( P.L. No. 94·
361} which authorizes the Secretary o f Defense to
waive the Buy American Ac t o f 1933 on the basis of
national in terest.
Based on Culver· Nunn Amendment, the DoD:
• Negotiated and signed RDP Memoranda of
Understandings ( MOUs} wit h many of the
NAT O nations
• Has negotiated similar agreements with other
countries over the years
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CC Text
We just discussed contracting restrictions with non-U.S. sources including the various laws that prevent or
discourage the use of non-U.S. products or services. Let's now discuss how the DoD has attempted to
address some domestic preference restrictions by entering into reciprocal defense procurement
agreements.
ACQ120 Fundamentals of International Acquisition
Lesson 12- Contracting and International Acquisition
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Reciprocal Defense Procurement Agreements
RDP agreements have these key considerations :
• Promotes standardization, rationalization, and interoperability of defense equipment with allies, friendly
foreign nations, and others
• Establishes procurement principles and procedures that provide for transparency in the conduct of
defense procurements
• Enhances access to each country's defense market by removing discriminatory barriers to purchase of
defense supplies and services to the extent mutually beneficial and consistent with:
o National laws and regulations
o International obligations
• Waives application of "buy national" restrictions ( the Buy American Act for the United States ) to the
extent allowable by national laws
• Contractors from signatory countries are given the opportunity to bid on each country's procurement
requirements
• Individual RDP MOUs may contain terms or annexes related to :
o Quality assurance services
o Contract audit services
o Logistics support
o Security of supply
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Did You Know
DPAP/CPIC oversees the negotiation and management of RDP MOUs. The DPAP International Contracting
website contains copies of these international agreements.
Learn More
Select the link to learn more about RDP MOUs and for copies of individual agreements.
ACQ120 Fundamentals of International Acquisition
Lesson 12- Contracting and International Acquisition
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Reciprocal Defense Procurement Agreements Countries
Based on the RDP MOU, each country affords the o ther certain benefits on a reciprocal basis . DoD classifies
RDP MOU partners as " quali fying countries" and the DFARS accords these countries with special treatment.
These are the 23 RDP MOUs currently in forc e. Blanket public interest exceptions to the BAA have been
made by the Secretary o f Defense, however one neutral country required a case-by-case determination.
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Special Treatment
DFARS accords qualifying countries special treatment including:
• Provision for duty-free entry of goods delivered under defense contracts
• Treatment as compliant sources for components that contain specialty metals, for purposes of the
Specialty Metals Restriction (10 U.S.C. 2533b)
• Treatment as domestic items manufactured or produced in the partner country
Blanket Public Interest
The following countries have blanket public interest exceptions to the BAA:
Australia
Belgium
Canada
Czech Republic
Denmark
Egypt
Finland
France
Germany
Greece
Israel
Italy
Luxembourg
Netherlands
Norway
Poland
Portugal
Republic of Korea
Spain
Sweden
Switzerland
Turkey
United Kingdom
Case-by-Case
Austria is the one neutral country that required a case-by-case determination.
ACQ120 Fundam entals of International Acquisitio n
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Contracting with Canadian Sources
canada is a longstanding ally and n eighbor, and the
United States and canada enjoy a robust and
mutually beneficial engagement in defense trade.
Canada has been defined in the DFARS as part of
the North American Defense Industrial Base .
Unless an exception applies, DoD or its components
contract with Canadian contrac tors via
the Canadian Commercial Corooration .
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DFARS
DFARS 225.870, Contracting with Canadian Contractors, defines Canada as part of the North American
Defense Industrial Base.
Canadian Commercial Corporation
Canadian Commercial Corporation is a governmental entity that serves as the prime contractor for
Canadian industry.
ACQ120 Fundamentals of International Acquisition
lesson 12- Contracting and International Acquisition
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Restrictions on Foreign Participation
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Scene 1 Major, did you know that it is not always possible for foreign contractors from countries where the
DoD has a reciprocal procurement MOU to participate in solicitations and negotiations for U.S. contracts?
Scene 2 Really, why is that so?
Scene 3 Well, even though reciprocal procurement agreements waive the Buy American Act domestic
preference restrictions, other restrictions may apply.
Scene 4 Henry, can you tell me more about these restrictions?
Scene 5 Sure, these other restrictions primarily concern access to classified information or controlled
unclassified information not releasable under national disclosure policies or other applicable disclosure
policies. In order to participate or perform as a prime contractor or subcontractor, all information
necessary for their participation must be releasable to the government of their country.
Scene 6 Interesting, has any foreign contractor been prevented from being a prime contractor or
otherwise prohibited from DoD procurements?
Scene 7 Yes, in some cases, foreign contractors may be considered non-qualifying suppliers under Part
209 of the DFARS, thus preventing their participation as a prime contractor. However, the foreign
contractor should be given the opportunity to participate as a subcontractor, provided the required
information is authorized for disclosure to the contractor’s government.
Scene 8 Major, also realize that other provisions of law such as national mobilization or emergency,
sensitive technologies, and small business offsets may prohibit foreign involvement in some DoD
procurements. Another important fact to remember is that this disclosure determination should be made
prior to any solicitation being made available for foreign participation.
ACQ120 Fundam e ntals of International Acquisitio n
RESOURCES 1 Pil lNT 1 HELP
Lesson 1 2 - Contracting and International Acquisition
Knowledge Review
To address domestic preference restrictions while meeting DoD
procurement needs, the DoD enters into what type of written
arrangements with other nations?
NATO Standardiza tion Agreement
I J Foreign Military Sales Cases
NATO Weapons System Partnerships
. / Reciprocal Defense Procurement Agreements
Check Answer
In an attempt to address some domestic preference restrictions while meeting DoD's procurement
needs, the DoD has entered into Reci procal Defense Procu r ement ( RDP) agreements with 23
countries to promote standardization, rationalization, and interoperability of defense equipment with
allies, friendly foreign nations, and others.
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ACQ120 Fundam e ntals of International Acquisitio n
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Lesson 1 2 - Contracting and International Acquisition
Knowledge Review
Procurements from countries where the DoD has concluded a Reciprocal
Defense Procurement Agreement are not subject to the "buy national•
restrictions of the Buy American Act {BAA) .
. / True
I J False
Check Answer
Re ci procal Procurement Agreements were developed to promote standardization of defense
equipment within NATO. The Congress enacted the Culver-Nunn Amendment to the FY 1977 Defense
Authorization Act ( P.L. No. 94- 361 ) which au thorizes the Secretary of Defense to waive the Buy
American Act of 1933 on the basis of national interes t.
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lesson 1 2 - Contracting and International Acquisition
Government Quality Assurance Agreements Introduction
Government Quality Assurance { GQA) Agreements :
• Promote the use of common quality assurance
standards and protocols whereby each
government supports purchases of defense
equipment from its industry by the :
o Other governmen t
o De fense contrac tors performing for the
other government
• Help promote the interoperabili ty and
standardization of conventional defense
equipment used by t he:
o
u.s. Armed
Forces
o Partner's armed forces
• Facilitate cooperation between defense
industries
• GQA Agreements take the form of either:
o A GQA Annex to an RDP MOU that DoD
has with a par tner governmen t
o A stand - alone document
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CC Text
We have just discussed RDP agreements, countries that have entered into these agreements with the
DoD, and the restrictions placed on foreign participation. Now, we’ll discuss Government Quality
Assurance Agreements which can be either a stand-alone document or an annex to a RDP MOU.
ACQ120 Fundamentals of International Acquisition
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Lesson 12 - Contracting and International Acquisition
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Gover nment Quality Assurance Agreements Countries
The DoD has GQA Agreements w ith 19 countries. These countries fa ll into three categories:
• Reciprocal No-Charge Agreements ( authority provided by the Arms Export Control Act (AECA)
• Reciprocal Fee-for-Service Agreements
• Combination No-Charge and Fee-for -Service Agreements
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Reciprocal No-Charge
These countries have Reciprocal No-Charge Agreements:
Belgium
Netherlands
Canada
Norway
Czech Republic
Poland
Denmark
Republic of Korea
France
Spain
Germany
Turkey
Greece
United Kingdom
Italy
Reciprocal Fee-for-Service
These countries have Reciprocal Fee-for-Service Agreements:
• Australia
• Sweden
Combination
These countries have a combination No-Charge and Fee-for-Service Agreements:
• Israel
• Finland
ACQ120 Fundam entals of International Acquisitio n
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Lesson 1 2 - Contracting and International Acquisition
Government Quality Assurance Agreements Administration
DPAP/ CPIC oversees the negotiation and management
of the GQA Agreements.
The Defense Contract Management Agency {DCMA) is
the home of DoD's quality assurance subject matter
experts who work with GQA counterparts all over the
world to:
• Facilitate quality assurance cooperation
• Fulfill DoD and partner nation requirements
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ACQ120 Fundam entals of International Acquisitio n
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Lesson 1 2 - Contracting and International Acquisition
Knowledge Review
How is a Government Quality Assurance agreement documented?
(Select all that apply)
. / A Stand· alone documen t
~ GQA Annex to an RDP MOU
Within the terms of a Foreign Military Sales case
In the international agreement for an International
Cooperative Program
Check Answer
GQA Agreements take the form of either a GQA Ann ex to a n RDP MO U that DoD has with a partner
governmen t or a stand-alone d ocument.
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Lesson 1 2 - Contracting and International Acquisition
Contracting for Foreign Military Sales Introduction
The u.s. Government follows the same r egulations and
policies for procurements under FMS as it does for
procurements for itself including the same acquisition
and contract management procedures.
This means that FMS procurements are conducted in
accordance with the:
• Federal Acquisition Regulation ( FAR)
• Defense Federal Acquisition Regulation
Supplemen t ( DFARS)
T his affords the foreign purchaser the same benefi ts
and prot ection that apply to DoD procurements and is
one of the principal reasons why foreign governments
and international organizations often pre fer to procure
through FMS vice Direct Commercial Sales (DCS).
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We just discussed GQA Agreements and the countries that have entered into these agreements with the
DoD. Let's now discuss contracting in support of Foreign Military Sales and focus on the importance of
early contracting officer participation and opportunities for FMS customer participation in the process
ACQ120 Fundamentals of International Acquisition
l esson 12 - Contracting and International Acquisition
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Guidance on Contracting for Foreign Military Sales
The following are guidances on con tracting as well as a comprehensive understanding of the policies and
procedures for FMS. Select each guidance fo r more information .
Security
Assistance
Management
Manual (SAMM)
Defense Federal Acquisition Regulation
Supplement (DFARS) Subpart 225.7300
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Procedures,
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Learn More
Select the links to learn more about DFARS and SAMM.
DFARS Subpart 225.7300
DFARS Subpart 225.73, “Acquisitions for Foreign Military Sales”, contains policies and procedures for
acquisitions for FMS made through new procurement.
The subpart does not apply to sales made from inventories or stocks, acquisitions for replenishment of
inventories or stocks, or acquisitions made under Cooperative Logistic Supply Support Arrangements
(CLSSAs).
Procedures, Guidance, and Information (PGI)
The DFARS companion resource the Procedures, Guidance, and Information (PGI) provide policies and
procedures that are unique to FMS acquisitions.
Security Assistance Management Manual (SAMM)
SAMM C6.3 Case Execution Acquisition, also provides additional compliance regulations and procedures
that pertain to FMS acquisitions.
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Lesson 12- Contracting and International Acquisition
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Contracting Officer Participation in Foreign Military Sales
Engagement
Role
Support
Contracting Officer participation in FMS programs often begins prior to the LOA. For complex acquisitions,
contracting officers may need to participate in discussions with the customer to ensure that the Letter of
Request ( LOR) requirements and customer expectations are clear and understood.
Based upon the LOR, the contracting officer will assist the Implementing Agency to develop cost and
delivery estimates along with other data necessary to prepare the :
• Price and Availability ( P&A) data
• Letter of Offer and Acceptance ( LOA)
A key role of the contracting officer in the LOA development process is to ensure that the content of the
LOA can be implemented using normal FAR and DFARS procurement and contract management procedures.
If the LOA is accepted, the task of acquiring the respective articles or services will rest with the
contracting officer with support from the program office team.
The contracting officer remains involved throughout the entire FMS process by managing contract
execution and supporting the case manager in case reconciliation actions which ultimately lead to case
closure.
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Engagement
The contracting officer assists the Implementing Agency personnel responsible for preparing the LOA by
working with prospective contractors to:
• Identify (in advance of the LOA) any unusual provisions or deviations
• Advise the contractor if the DoD expands, modifies, or does not accept any requirements proposed
by the contractor
• Identify any logistics support necessary to perform the contract
• For noncompetitive acquisitions over $10,000, asks the prospective contractor for information on:
o Price
o Delivery
o Other relevant factors
Support
The contracting officer works with the Implementing Agency personnel responsible for preparing the LOA
to:
• Assist in preparing P&A data
• Assist in preparation of the LOA
• Identify and explain all unusual contractual requirements or requests for deviations
ACQ120 Fundamentals of International Acquisition
Lesson 12- Contracting and International Acquisition
RESOURCES
Early Contracting Officer Participation
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Long Description
Monica Jackson, IPT member, and Henry Ranquist, IA mentor, sitting at a table discussing the importance
of contracting officer early participation.
CC Text
Monica: Henry, I heard that it is important for a contracting officer begin participating early in the FMS
process. Is this true?
Henry: Yes, Definitely! Early contracting officer involvement will help ensure no false impressions are
made in terms of cost, schedule, and required customer payments.
Monica: Does the contracting officer have any other responsibilities?
Henry: Yes, the contracting officer also makes sure that all FMS customer requirements are accurately
reflected in the ensuing contract.
Monica: So, the contracting officer works really closely with the FMS customer and the contractor?
Henry: Yes, Monica. The contracting officer reviews any customer-generated sole source requests and
determines with the contractor the extent of FMS customer participation in the acquisition.
Monica: Wow, Henry. I really didn't realize how important that it is to have the contracting officer
involved in the early stages of the FMS process and how vital this participation is to setting realistic
customer expectations.
ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 PR INT 1 HELP
Lesson 1 2 - Contracting and International Acquisition
Foreign Military Sales Sole Sourcing
FMS Sole Sou rce Co n tracting
FMS Sole Source Requests
The Competition in Contra cting Act { CICA) requires U.S.
Government agencies to use full a nd ope n competition.
This legisla ted requirement is detailed in Part 6 of the
FAR.
There are circumstances where other than a full and
o p en compe tition approach can be used:
• FAR Subpart 6.3, Other Than Full and Open
Compe tition
• FAR 6.302· 4, international Agreement
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FAR Subpart 6.3
FAR Subpart 6.3 provides policies and procedures for contracting without full and open competition.
FAR 6.302-4
FAR 6.302-4 provides the following:
Full and open competition need not be provided for when precluded by the terms of an international
agreement or a treaty between the United States and a foreign government or international organization,
or the written directions of a foreign government reimbursing the agency for the cost of the acquisition of
the supplies or services for such government.
The FAR states this authority may be used in circumstances such as when a contemplated acquisition is to
be reimbursed by a foreign country that requires that the product be obtained from a particular firm as
specified in official written direction such as a LOA.
FMS Sole Source Requests
The SAMM, C6.3.4 defines the process for DoD consideration of foreign government sole source requests
based on the objective needs of the purchaser.
Sole source requests should be included in the customers Letter of Request (LOR) and the purchaser may
request a specific prime and/or subcontractor source.
When possible, while the LOR is being prepared, the sole source request should be sent to the contracting
officer for information and advice.
The Military Departments (MILDEPs) are delegated the authority to approve or disapprove
Approved sole source requests result in a sole source note being included within the LOA.
The note will:
• Designate the approved sole source (by name)
• Becomes the basis for sole source contracting as authorized by FAR Subpart 6.304-2
Disapprovals are to be coordinated through DSCA.
FMS sole source requests.
Learn More
Select the link to learn more about FMS sole source requests.
Did You Know
Per SAMM C6.3.4.6., the Implementing Agency sends the request for other than full and open competition
and a copy of the implemented LOA document containing the sole source designation to the contracting
office for information and advice with regard to the customer's sole source request.
The intent of this policy to avoid committing to sole source procurement when the contracting activity
advises that the proposed contractor has poor past performance, no relevant experience, is ineligible for
contracts or otherwise represents a high risk.
ACQ120 Fundamentals of International Acquisition
RESOURCES
Lesson 12- Contracting and International Acquisition
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Foreign Military Sales Pricing Administration
Defense Federal Acquisition Regulation Supplement Subpart 225.7303 provides the following considerations
for pricing FMS acquisitions :
• FMS contracts are priced using the same principles used in pricing other defense contracts
• The FAR does allow a contract made under the terms of an LOA to recognize the reasonable and
allocable costs of doing business with a foreign government or an international organization, even
though costs might not be recognized in the same amounts in DoD-only contracts in the following
areas :
o Selling expenses
o Product support and post delivery service expense
o Offset costs
o Other: independent research and development and bid and proposal costs
• Application of the FAR pricing principles may result in prices that differ from other defense contract
prices for the same item due to recognition of these costs
• If the foreign government has conducted a competition resulting in adequate price competition,
submission of cost or pricing data is not required
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Did You Know
Industry’s cost of fulfilling offset agreements related to an FMS program are allowable charges in contracts
made under the terms of an LOA.
Also, offset costs may be aggregated and included in the LOA unit cost, but the Executive Order requiring
a "hands off" policy on offsets precludes use of a separate contract line item for offset costs.
ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 PRINT 1 HELP
Lesson 12 - Contracting and International Acquisition
Offset Relationship and Foreign Military Sales
Offsets in defense trade encompass a r ange of
industrial compensation requirements by foreign
governments as a condition of their purchase of
defense articles and services from non- domestic
sources.
Offsets may include:
Offset Relationships
Untied States Government
• Coproduc tion
• Licensed produc tion
• Subcontractor production
• Technology transfer
• Foreign investment
Offsets are common on both FMS and DCS for major
system acquisitions.
Offsets may be:
FMS Programs Only
• Direct
• Indirect
• Combination o f both
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Long Description
Diagram labeled Offset Relationships. At the top of the diagram a box is labeled, United States
Government extends with a double-sided arrow labeled, LOA to a box labeled, Foreign Government.
Another double-sided arrow labeled, Contract also extends from United States Government to box labeled,
Defense Contractor. Between the box labeled, Foreign Government and the box labeled, Defense
Contractor is a double-sided arrow labeled, Offset. Below the diagram is the label, FMS Programs Only.
Popup Text
Direct
Direct offsets refer to compensation, such as coproduction or subcontracting, directly related to the
system being exported.
Indirect
Indirect offsets apply to compensation unrelated to the exported item, such as foreign investment or
purchases of goods or services.
ACQ120 Fundamentals of International Acquisition
RESOURCES
Lesson 12- Contracting and International Acquisition
Offset Relationship and Foreign Military Sales Discussion
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Long Description
Major Brown and Henry Ranquist sitting across from each other discussing offsets and workshare in
Foreign Military Sales contracting.
CC Text
Major Brown: Henry, I am a little confused about workshare and offsets, they sound very similar.
Henry Ranquist: Since partners in an International Cooperative Program often attempt to ensure
industrial participation for their country's industry, these programs frequently involve discussion of
workshare. DoD seeks best value procurement without guarantees of a specific workshare but if needed
will work to attain equitable worksharing.
Major Brown: I think I understand the workshare concept how about offsets.
Henry Ranquist: Offsets are industrial compensation packages frequently required by the purchasing
country on FMS and DCS programs. The purchasing country requires the manufacturer to provide its
industry either program-related work or some other compensation in exchange for agreement to purchase
their product. In International Cooperative Programs conducted under AECA Section 27 authority, U.S.
industry offset arrangements are not allowed by our law. So offsets are unique to FMS and DCS programs.
Henry Ranquist: Additionally, it is important to note that the offset agreement is between the purchasing
country and the U.S. defense contractor. We are aware that the offset agreement exists but our laws and
policies do not allow government officials to be party to the agreement. In general the U.S. is not in favor
of offset agreements as we view them as protectionist and they distort competition.
Major Brown: What would happen if the United States prohibited offsets?
Henry Ranquist: Great question! If the United States prohibited offsets, U.S. defense companies would
be at a significant disadvantage in the competitive global defense market and this would impede the DoD
preference that countries friendly to the U.S. fill defense requirements with U.S. origin items.
Major Brown: Does the U.S. Government prefer that U.S. defense companies agree to offset
commitments?
Henry Ranquist: We do not encourage or commit U.S. firms to offsets and assumes no obligation to
satisfy or administer the offset requirement or to bear any of the associated costs. The DFARS does allow
at the discretion of the contracting officer a U.S. defense contractor to recover all costs incurred for offset
arrangements with a foreign government or international organization if the LOA is financed wholly with
customer cash or repayable foreign military finance credits.
ACQ120 Fundamentals of International Acquisition
RESOURCES
Lesson 12- Contracting and International Acquisition
1
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Foreign Military Sales Solicitation and Contract Terms
DFARS Subpart 225.730 1 and the PGI provides the following considerations for solicitation and FMS
contract terms :
• FMS requirements can be included in the same contracts used to procure items for the DoD
• Ensure LOA terms and conditions including any country unique requirements are incorporated into the
contract
• For contracts related to BPC programs funded by U.S. Government funds under pseudo LOAs, ensure
that the contract is consistent with the period of funds availability
• Comply with Defense Transportation Regulation requirements
• Require the preparation of a DD 250, Material Inspection and Receiving Report, as the shipment
release document to accompany the shipment for customs clearance
• Prior to contract award, contracting officers shall ensure that:
o A contracting officer's representative is assigned with detailed point of contact information
o Unique country requirements are specified in the contract
o Commodity-unique requirements are specified in the contract
o FMS Transportation Accounting Code is stated in the contract
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Requirements
FMS requirements need to be separately identifiable to industry in order that industry may utilize the
DFARS 225.7303 pricing policy.
Additionally, separation of FMS requirements by CLIN and/or SubCLIN permits separate Accounting
Classification Record Numbers (ACRNs) to be cited thereby directly designating:
• Specific FMS country
• LOA case
• LOA line that is financing the purchase
BPC Programs
Although the U.S. Government funds for BPC programs flow through the FMS trust fund and the actual
lines of accounting appear to be traditional FMS fund citations, BPC funds retain the funds obligation and
expiration limitations that apply to the DoD source appropriation.
The funds obligation and expiration date periods will be contained within the notes of the BPC LOA.
Requirements
Defense Transportation Regulation requirements for:
• Packaging, labeling, and documentation
• A Transportation Plan is required for each LOA containing Classified, sensitive, including
Controlled Cryptographic Items (CCI), or Arms, Ammunition, and Explosives
Customs Clearance
The current Wide Area Workflow (WAWF) receiving report is insufficient for satisfying FMS customs
clearance requirements.
As such, FMS procurements should specify that a DD 250 be prepared to accompany the shipment.
Contact Information
Clearly visible contact information such as:
• Phone number with international dialing protocols
• Physical and mailing address
Requirements
Unique country requirements, for example: additional documentation requirements for use in country
customs clearance (Levy Exemption waiver).
Requirements
Commodity-unique requirements, for example:
• Responsibility for obtaining/paying for/affixing active Radio Frequency Identification tags
• Transportation Control Number construction/usage
ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 PR INT 1 HELP
Lesson 12 - Contracting and International Acquisition
Foreign Military Sales Contracting Considerations
FMS Cu stom er Partid pation
tr= and LOA Co n sisten cy
= n:..::.act
o n.:..__~co.:.
a.::ti:..::..:
:..::
Contract Administr
At the contracting officer's discretion after consultation
with the contractor, FMS customers can participate
with u.s. Government acquisition personnel in
discussions with industry to:
• Develop technical specifications
• Establish delivery schedules
• Identify any special warranty provisions or other
requirements unique to the FMS customer
• Review prices of varying alternatives, quantities,
and options needed to make price-performance
tradeoffs
OFARS Subpart 225.7304 explains factors that may limit
customer participation in other areas, including not
observing or participating in negotiations between the
U.S. Government and the contractor involving cost or
pricing data, unless a deviation is granted.
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Did You Know
In recognition of FMS customer interest in actively participating in FMS acquisitions and that the FMS
program is an instrument of U.S. foreign policy both DSCA and DPAP senior leadership have encouraged
the acquisition community to actively seek opportunities for customer participation in FMS acquisitions.
This participation helps build relationships by fostering better understanding, strengthening alliances,
providing transparency, and building customer confidence and teamwork.
Contract Administration
Contract administration is an integral part of the FMS process and the customer is entitled to this service
as part of the FMS purchase.
In the LOA, the customer is charged a Contract Administration Service (CAS) surcharge fee for FMS
materiel and services delivered through procurement.
Within DoD, DCMA is responsible for contract administration and quality assurance services.
CAS
The CAS fee has three primary components:
• Contract administration
• Quality assurance
• Contract audit
The Defense Contract Audit Agency (DCAA) provides audit and financial advisory services in support of
DoD acquisitions for FMS.
Did You Know
Based on the GQA Agreements, certain CAS component charges are waived for countries with GQA
agreements based on reciprocity as explained in the SAMM.
Learn More
Select the link to learn more about SAMM provisions on the waiver of CAS charges.
Long Description
Pie chart composed of three equal-sized parts labeled: Contract Administration, Quality Assurance, and
Audit and Financial Advisory Services.
Contract and LOA Consistency
During FMS program execution the FMS program or case manager must work closely with the contracting
officer to ensure the LOA and contract maintain consistency.
LOA amendments may require subsequent contracting actions or program execution factors may
necessitate changes to the LOA.
The following are LOA and contract considerations:
• LOA serves as a commitment by the U.S. Government with the foreign purchaser
• Early communication of changes or problems is preferable over last minute surprises
Contracting considerations continue until all contracted supplies and services for the case have been
physically completed and all case financial obligations are fully liquidated or appropriately documented to
support Accelerated Case Closure Procedures.
Commitment
Although the LOA prices, delivery schedule, payment schedule are estimates, they set customer
expectations.
If actual FMS program execution deviates from what was originally planned and stated in the LOA, the
DoD should communicate these changes to the FMS customer and agree on a revised execution plan
which should be documented in an LOA amendment or modification.
Communication
LOA payment schedules must be updated as necessary to reflect revisions to delivery schedules, pricing
updates, contract award dates, and contractor payment milestones.
Accelerated Case Closure Procedures
Timely case closure is a high interest item for DSCA and FMS customers because it frees up funds that
may be spent elsewhere.
FMS cases can be closed by either Accelerated Case Closure Procedures (ACCP) or Non-ACCP Procedures.
Long Description
Two documents labeled Letter of Offer and Acceptance and DoD Contract.
ACQ120 Fundamentals of International Acquisition
RESOURCES
Lesson 12- Contracting and International AcQuisition
Foreign Military Sales Customer Participation Discussion
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Long Description
Henry Ranquist and Major Brown discussing the FMS customer involvement in our management of their
FMS program.
CC Text
Major Brown: Henry why are DPAP and DSCA promoting FMS customer involvement in our management
of their FMS programs? I thought that was my job as the program manager.
Henry Ranquist: It’s a pretty straight forward answer. Many FMS customers have requested an
enhanced role and the competition for foreign business among the global suppliers is intense. It is hoped
that enhanced customer participation will help build relationships by fostering better understanding,
providing transparency, and build customer confidence. This will help keep the U.S. as a supplier of
choice.
Major Brown: I get it Henry. What kind of participation have contracting officers approved on other FMS
programs?
Henry Ranquist: In one of the largest FMS programs in history, the customer asked to review the
statement of work prior to contract award. Note that this was after LOA signature meaning the scope of
work and prices were already established. The acquisition community was skeptical that this would result
in program instability and set a bad precedence but in the end the OSD offices supported the country and
after consultation with the prime contractor the contracting officer approved their request.
Major Brown: I can see what the program office had some concerns over the country’s request. In my
mind this just reinforces the need to ensure that we have a very well defined Letter of Request and have a
thorough discussion with the FMS customer on program content before an LOA is prepared. There is a lot
of cost and schedule risk if this is not done until after LOA signature within the contracting process.
Henry Ranquist: Major, excellent observation. That’s the way I would approach this situation.
ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 PR INT 1 HELP
Lesson 12 - Contracting and International Acquisition
Knowledge Review
Which of the following statements best explains the role of a
contracting officer on an FMS program?
Contracting officer participation begins after signature
of the FMS case
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Contracting Officers should participate with the Implementing
Agency early in the process of developing P&A data or LOA
If the LOA is accepted, the task of acquiring the respective
articles or services will rest on the program team with
support from the contracting officer
The Federal Acquisition Regulation {FAR) prohibits
contracting officer review of proposed foreign government
sole source requests
CheO< Answer
Contracting Offi cers should participate with the Implementing Agency early in the process of
developing Price and Availability {P&A) data or a Letter of Offer and Acceptance {LOA).
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ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 PRINT 1 HELP
Lesson 12 - Contracting and International Acquisition
Knowledge Review
Requests by the foreign customer for a sole source procurement as
p art of a FMS case should be included in what document?
Deviation and Waiver Request
I Letter of Intent
~ Letter of Request
Offset Agreement
Check Answer
Sole so urce r e quests should be included in the customers letter of Request ( LO R) and the
purchaser may request a specific prime and/or subcontrac tor source.
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ACQ120 Fundam e ntals of International Acquisitio n
RESOURCES 1 Pil lNT 1 HELP
Lesson 12 - Contracting and International Acquisition
Knowledge Review
Select the statement that best d escribes FMS customer participation
in FMS contracts?
Customer participation is prohibited by the Defense
Federal Acquisition Regula tion Supplement (DFARS)
Customer participation is supported by the Defense
Securi ty Cooperation Agency {DSCA) bu t not supported
by De fense Procurement and Acquisition Policy {DPAP)
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The exten t o f customer participation is at the
con tracting o fficer's discretion after consultation with
the contractor
The extent of customer participation is determined by
the program manager
Check Answer
At the co nt r llcti ng o ffi cer ' s d iscre tion after co ns ul tatio n with t he contractor , FMS customers
can participate with U.S. Government acquisition personnel in certain activities.
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ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 PR INT 1 HELP
Lesson 1 2 - Contracting and International Acquisition
Contracting for International Cooperative Programs Introduction
Th e international agreement for a n International
Coopera tive Program will:
• Define any contracting responsibilities for the
effort
• Specify which o f these participant's contrac t
laws, regula tions, and procedures to follow
The terms of the FAR and DFARS apply to contrac ts
for cooperative programs where the United Sta tes has
contrac ting responsibilities under the terms of the
interna tional agreement and also contain provisions
applicable where ano ther participant is contracting on
the behalf of the United Stat es .
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Closed Captioning
We just discussed the contracting considerations for Foreign Military Sales such as the importance of the
contracting officer and customer participation in FMS contracts. Let's now discuss contacting for
International Cooperative Programs.
ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 PRINT 1 HELP
lesson 12 - Contracting and International Acquisition
Promoting Competition for International Cooperative Program Contracts
the Be half of t h e
~~~~~iJ<o»nltil
u.s.
A primary g o a l of the United States is to maintain the
maximum competition throughout the life cycle of a
system.
However, on In terna tional Cooperative Programs the FAR
allows other than full and open cooperation when
justified and approved by DPAP .
• Competition in Contracting Act ( CICA) and FAR
6. 302- 4 exceptions
• DPAP reviews j ustifications prov ided in the ~
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Directed Sou r ce Su b contra cting
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Exceptions
The Competition in Contracting Act (CICA) and the FAR 6.302-4 allows for the exceptions to the
requirement for full and open competition when it is precluded by the terms of an international agreement
or a treaty between the United States and a foreign government or international organization.
SSOI
The SSOI is prepared to obtain Request Authority to Develop (RAD) approval which must explain and
justify any envisioned use of other than full and open competitive contracting.
This explanation and justification is reviewed by DPAP as part of the OSD international agreement staffing
process.
Contracting on the Behalf of the U.S.
If there is intent to have another country(ies) contract on behalf of the United States under the terms of
an international agreement
International Agreement
ICP international agreements that permit another country to contract on the U.S.'s behalf may be
established by DoD using Arms Export Control Act (AECA) Section 27 authority., separate approval is
required.
Approval
This approval is outside of the Request Authority to Develop (RAD) and Request Final Approval (RFA)
international agreement staffing process.
A Determination and Finding (D&F) must be prepared for USD(AT&L) approval.
D&F
A D&F must be prepared for USD(AT&L) approval in compliance with the 10 U.S.C. 2350b and as provided
for by DFARS Subpart 225.871-3.)
This D&F may also provide the basis for waiving the U.S. statutory competition requirements in which case
a two-part D&F is prepared:
• Part I
Part I
Part I: Necessary to obtain approval for a foreign country to contract for U.S. requirements.
Requires a USD(AT&L) determination that such contract will significantly further:
Standardization
Rationalization
Interoperability
This approval is required before the other country can award contracts using U.S. Government funds.
• Part II
•
•
•
Part II
Part II (only if applicable): Necessary to obtain USD(AT&L) approval of a waiver to the statutory
requirement that a foreign country award the contract on a competitive basis.
In the absence of such a waiver, the law requires that:
• Contracts will be made on a competitive basis
• U.S. sources will not be precluded from competing under the contract
When another country is contracting on behalf of the United States, it is important that the United States
include language in the international agreement prohibiting the use of a cost-plus-a-percentage-of-cost
type contract.
Contract
Cost-plus-a-percentage-of-cost type contracts are prohibited by U.S. law in 10 U.S.C. 2306(a).
Did You Know
These D&F approvals are staffed for USD(AT&L) approval by the DPAP Contract Policy and International
Contracting (CPIC) directorate.
CPIC can also provide templates that explain the required D&F content.
Long Description
Two groups of documents labeled: Front group of documents labeled Determination and Finding Part I and
back group of documents labeled Determination and Finding Part II.
Directed Source Subcontracting Directed source subcontracting may be required to meet industrial
participation objectives of an International Cooperative Program.
Subcontracting
DFARS Subpart 225.871-5 enables DPAP to authorize the direct placement of subcontracts with particular
subcontractors when specifically addressed in the terms of the international agreement for an
International Cooperative Program.
In some instances, it may not be feasible to name specific subcontractors at the time the agreement is
concluded.
However, the agreement should clearly state the general provisions for work sharing at the prime and
subcontract level.
DPAP approval is obtained through the OSD international agreement staffing process and a separate
approval is not required.
ACQ120 Fundamentals of Internatio nal Acquisition
Lesson 12- Contracting and International Acquisition
RESOURCES
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Preserving the Authority for International Cooperative Program Contracts
Another contracting consideration in International Cooperative Programs is preserving the authority of:
On an International Cooperative Program, source
selection is conducted in accordance with the
procedures of the nation responsible for contracting .
The terms of an international agreement may provide
for the Source Selection Authority { SSA) to be advised
by a multinational steering committee or group.
The SSA's decision must be based on an integrated
assessment of proposals against the source selection
criteria in the solicitation .
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International Agreement
This agreement must clearly recognize the SSA’s sole authority to make the source selection decision.
SSA’s decision
The SSA may use reports and analyses prepared by others, but the source selection decision:
• Represents the SSA's independent judgment
• Must be documented
Contracting Officers
Another contracting consideration in International Cooperative Programs is preserving the authority of:
The contract is key to implementing the terms of the Government-to-Government international
agreement for an International Cooperative Program.
The contracting officer must have the authority to determine the application of:
• Rules
• Regulations
• Policies to a specific contract
The contract must be consistent with the terms of the international agreement
Terms
International agreements normally contain specific terms that must be reflected in contracts related to:
• Rights in technical data
• Disclosure and use information
•
•
•
•
Controlled Unclassified Information (CUI)
Security
Third party sales and transfers
Compliance with the export control laws of the participants
Long Description
Two documents labeled International Agreement and Contract. The words "Terms" between the two
documents with double side arrows.
ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 PRINT 1 HELP
Lesson 12 - Contracting and International Acquisition
Contract Administr ation, Audit, and Quality Assur ance Services for International
Cooperative Progr am Contracts
The international agreement should lev er age and
reference existing:
• RDP MOUs
• GQA agreements
This agreemen t should also de fine the
responsibilities for providing :
• Con tract administra tion
• Auditing
• Quali ty assurance services
Provision of these services should also be factored
into the participant's equitable sh are of program
costs.
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Long Description
In background, pie chart with three equal parts labeled: Contract Administration, Quality Assurance and
Auditing and Financial Advisory Services. In the foreground is a balance scale with labels for each side.
Left scale is labeled, RDP Agreement and right scale is labeled, GQA Agreement.
ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 PR INT 1 HELP
Lesson 1 2 - Contracting and International Acquisition
Role of the Contr ecting Officer in an International Cooper ative Program
Just as in Foreign Military Sales {FMS) acquisitions,
the contracting officer is an important team member
in an International Cooperative Program.
Contracting officers play an important role in:
• Developing the acquisition strategy
• Providing inputs to the :
o SSOI
o In ternational agreement
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Did You Know
Contracting officers should be consulted on matters related to the following:
Competition requirements
Protection of Information
Contracting responsibilities
Workshare and industrial participation
Type of contract (contracting
officer decision)
Rights in technical data
Use of government furnished
property
Contract administration, auditing and quality
assurance services
Source selection
Contract financing
Contractor teaming arrangements
Subcontracting
ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 Pil l NT 1 HELP
lesson 1 2 - Contracting and International Acquisition
Knowledge Review
Which of the following are major contracting considerations for
International Cooperative Programs?
Preserve the authority of the Source Selection
Authority and U.S. Government participation in
offset arrangements
Preserve U.S. Government participation in offset
arrangements and promote competition in contracting
~
Promote competition in contracting and preserve the
authority of the Source Selection Authority
Promote competition in contracting and preserve
leadership in the program
u.s.
Check Answer
Major contracting considerations in International Cooperative Programs are p romoting competition
in contracting and preserving the authority o f the Source Selection Authority (SSA) and
contracting officers.
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ACQ120 Fundam entals of International Acquisitio n
RESOURCES 1 Pil lNT 1 HELP
lesson 12 - Contracting and International Acquisition
Knowledge Review
When another country is contracting on b ehalf of the U.S., what is an
important factor to consider?
Ensure contracts awarded to U.S. firms are sole
source
Ensure diplomatic status is granted for all u.s.
Government personnel working on the program
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Ensure a De termination and Findings {D&F) is approved
before the o ther country awards contracts using u.s.
Government funds
Ensure the FMS case contains approval for sole source
contracting
Check Answer
When another country is cont racti ng o n t h e be hlllf o f t h e United state s, a Determination and
Finding {D&F ) must be approved by USD{ AT&L) be fore contracts using U.S. Governmen t funds are
awarded. This D&F may also provide the basis for waiving the u.s. statutory compe ti tion
requirements.
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ACQ120 Fundamentals of International Acquisition
Lesson 12- Contracting and International Acquisition
RESOURCES 1 PRIMT 1 HELP
l esson Summary
In this lesson you have learned the following key considerations regarding contracting and international
acquisition :
• Most DoD equipment is procured from domestic sources although globalization has made more
equipment and services available from non - U.S. sources
• Non - U.S. sources expect to compete in a system where full and open competition is the standard
• A DoD procurement objective is to obtain the best value to the warfighter and the U.S. taxpayer
• The United States has a number of laws and policies that restrict use of foreign sources such as the
Buy America Act, the Berry Amendment, and other provisions of law
• Reciprocal Defense Procurement agreements promote standardization, rationalization, and
interoperabili ty of defense equipment with allies, friendly foreign nations, and others
• GQA Agreements promote the use of common quality assurance standards and protocols whereby each
government supports purchases of defense equipment from its industry by the other government and
by defense contractors performing for the other government
• FMS contracting considerations, and hence contracting officer participation, begin with preparation of
Price and Availability ( P&A) data and the Letter of Offer and Acceptance ( LOA) and continue through
FMS case closure
• While offsets are permitted in association with FMS programs and U.S. industry can recover its offset
costs in resulting contracts, it is important to note that the offset agreement is between the
purchasing country and the U.S. defense contractor
• During FMS program execution the FMS program or case manager must work closely with the
contracting officer to ensure the LOA and contract maintain consistency
• The international agreement for an I nternational Cooperative Program will define any contracting
responsibilities for the effort and specify which participant's contracting laws, regulations, and
procedures will be used
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ACQ120 Fundam e ntals of International Acquisitio n
RESOURCES 1 PR INT 1 HELP
lesson 1 2 - Contracting and International Acquisition
lesson Completion
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