Appendix IV to Part 700 - Memorandum of Understanding on Priorities and Allocations Support Between the U.S. Department of Commerce and the Canadian Department of Supply and Services

A. Purpose

Since 1950, the United States and Canada have been assisting each other on priorities and allocations for programs important to the defense of both nations. Details on the implementation of that assistance were spelled out in the U.S. Defense Priorities System Regulation No. 2 (DPS Reg. 2), Operations of the Priorities and Allocations System between Canada and the United States (15 CFR part 351). The Defense Priorities and Allocations System (DPAS) regulation (15 CFR part 700) supersedes the Defense Materials System and Defense Priorities System regulations (15 CFR parts 330 through 351), including DPS Reg. 2. While the revised regulation addresses the procedures for obtaining priorities and allocations support from the United States and Canada, it does not fully detail the working relationship between the United States and Canada. Accordingly, the following Memorandum of Understanding is set forth between the U.S. Department of Commerce and the Canadian Department of Supply and Services.

B. General

1. The Office of Industrial Resource Administration, U.S. Department of Commerce (DOC), is the United States point of contact for the Canadian government with respect to priorities and allocations.

2. The Supply Information and Data Management Branch, Canadian Department of Supply and Services (DSS), is the Canadian point of contact for the U.S. government with respect to priorities and allocations.

C. Priority Rating Authority

1. DOC will authorize the DSS to use priority ratings, including those for the procurement of controlled materials, in the United States in support of the following programs authorized by the Federal Emergency Management Agency:

D1—Canadian Military Programs D2—Canadian Production and Construction D3—Canadian Atomic Energy Program

2. DOC must receive requests for priority rating authority, by program, at least ninety days in advance of the calendar quarter in which the authorization is required. Requests with respect to controlled materials requirements must be received at least 240 days in advance of the calendar quarter in which authorization is required.

D. DX Authority

DSS may authorize the use of the “DX” rating symbol for procurements in the United States which are in support of U.S. “DX” rated programs.

E. Items Which Will Not Receive Priority Rating Authority

Priority ratings may not be used for procurements in the United States of (1) civilian items for resale in Military Exchanges or the packaging for such items; (2) material purchased from exclusively retail establishments; (3) direct procurement of those Federal Supply Classification classes, groups, or items specified in Attachment A to this Understanding, unless those items are to be used as production material for an authorized program; or (4) procurement of items to be used primarily for administrative purposes, such as for personnel or financial management.

F. Special Priorities Assistance

1. DOC will provide special priorities assistance as needed to Canadian procurements in the United States which are in support of D1, D2, and D3 programs when requests for such assistance are sponsored by DSS.

2. DSS will provide assistance to United States procurements in Canada which are in support of authorized programs when requests for such assistance are sponsored by DOC.

G. Forms and Reports

1. Canadian requests for special priorities assistance from the United States will be submitted to DOC on Form ITA-999, “Request for Special Priorities Assistance”.

2. Requests for priority rating authority will be submitted to DOC on Form DSS-1451-1, “Application for U.S. Priority Rating Covering Importation of Quarterly Requirements of Materials from the United States”, on Form DSS-1451-2, “Application for U.S. Priority Rating Covering Specific Materials”, or other forms as may be established by DSS.

3. DSS will report monthly on the number of rating authorizations and their dollar value against DOC rating authorizations during the previous month.

4. DSS will report, two months following the close of each calendar quarter, the number and quantity of controlled materials allotments issued against DOC authorizations for each program during that quarter.

5. United States requests for assistance from Canada will be submitted to DSS by letter.

H. Compliance

1. DSS will ensure that Canadian Government personnel and Canadian defense contractors are in compliance with the provisions of the DPAS when placing rated orders in the United States, including those for controlled materials.

2. DOC will ensure that U.S. Government personnel and U.S. contractors are in compliance with the provisions of the DPAS when placing rated orders in Canada, including controlled materials.

3. The DSS will inform DOC of any alleged violations of the DPAS of which it may become aware.

I. Training

1. The DSS will develop and implement training programs on the DPAS for appropriate Canadian Government procurement and contract administration personnel and contractor personnel.

2. DOC will develop and implement training programs on the DPAS for appropriate U.S. Government procurement and contract administration personnel and contractor personnel.

3. DSS and DOC training programs shall be coordinated to ensure the conduct of a comprehensive program and to minimize duplication.

J. Effective Date

This Memorandum of Understanding shall take effect August 29, 1984.

Canadian Department of Supply and Services Peter Smith, Assistant Deputy Minister, Operations

Date: June 26, 1984.

U.S. Department of Commerce Walter J. Olson, Deputy Assistant Secretary, Export Administration

Date: June 21, 1984.

Attachment A—Federal Supply Classification Classes, Groups, and Items Not Eligible For Priority Ratings Group 35Services and trade equipment—except: 3510Laundry and dry cleaning equipment 3520Shoe repairing equipment 3530Industrial sewing machines and mobile textile repair shoes 3540Wrapping and packaging machinery 71*Furniture 72*Household and commercial furnishings and appliances—except: 7240Household and commercial utility containers 73*Food preparation and serving equipment—except: 7310Food cooking, baking and serving equipment 7320Kitchen equipment and appliances 7360Sets, kits, and outfits: food preparation and serving 74Office machines, visible record equipment, and data processing equipment** 75*Office supplies and devices 77*Musical instruments, phonographs and home-type radios 78*Recreational and athletic equipment 79Cleaning equipment and supplies 85*Toiletries 87 1Agricultural supplies 89Subsistence 91* 1Fuels, lubricants, oils, and waxes—except: 9135Liquid propellant fuels and oxidizers, chemical base 9150Oils and greases: cutting, lubricating, and hydraulic 9160Miscellaneous waxes, oils and fats 94*Non-metallic crude materials—except: 9420Fibers: vegetable, animal and synthetic 99*Miscellaneous Class 7630Newspapers and periodicals 7660Sheet and book music 8325Fur materials 8425Underwear and nightwear, women's 9610Ores