00-4387. Foreign Acquisition

AGENCY:

National Aeronautics and Space Administration (NASA).

ACTION:

Final rule.

SUMMARY:

This final rule conforms the NASA FAR Supplement (NFS) to Federal Acquisition regulations on Foreign Acquisition, finalized in Federal Acquisition Circular (FAC) 97-15. It also refines internal agency coordination procedures.

EFFECTIVE DATE:

February 25, 2000.

FOR FURTHER INFORMATION CONTACT:

Patrick Flynn, NASA, Office of Procurement, Contract Management Division (Code HK), [phone], e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

A. Background

This final rule conforms the NASA FAR Supplement to Item No. II of FAC 97-15, which became final on December 27, 1999, and enters into effect on February 25, 2000. Internal coordination procedures have been clarified, but no substantive changes have been made to NASA policy.

B. Regulatory Flexibility Act

NASA certifies that this final rule will not have a significant economic impact on a substantial number of small business entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) because it does not impose any new requirements.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the NFS do not impose any recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 1806, 1825, 1852, and 1853

• Government procurement

Tom Luedtke,

Associate Administrator for Procurement.

Accordingly, 48 CFR Parts 1806, 1825, 1852, and 1853 are amended as follows:

1. The authority citation for 48 CFR Parts 1806, 1825, 1852, and 1852 continues to read as follows:

Authority: 42 U.S.C. 2473(c)(1).

PART 1806—COMPETITIVE REQUIREMENTS

2. In section 1806.303-1, revise paragraph (d) to read as follows:

1806.303-1

Requirements.

* * * * *

(d) The contracting officer shall send a copy of each approved justification or D&F that cites the authority of FAR 6.302-3(a)(2)(i) or FAR 6.302-7 to NASA Headquarters, Office of Procurement (Code HK), unless one of the exceptions at FAR 25.403 applies to the acquisition. The transmittal shall indicate that the justification is being furnished under FAR 6.303-1(d).

PART 1825—FOREIGN ACQUISITION

3. Revise Part 1825 to read as follows:

PART 1825 FOREIGN ACQUISITION

1825.003

Definitions.

1825.003-70

NASA definitions.

Subpart 1825.1 Buy American Act—Supplies

1825.103

Exceptions.

Subpart 1825.4 Trade Agreements

1825.400

Scope of subpart.

Subpart 1825.9 Customs and Duties

1825.901

Policy.

1825.903

Exempted supplies.

Subpart 1825.10 Additional Foreign Acquisition Regulations

1825.1001

Waiver of right to examination of records.

1825.1002

Use of foreign currency.

Subpart 1825.11 Solicitation Provisions and Contract Clauses

1825.1101

Acquisition of supplies.

1825.1103

Other provisions and clauses.

1825.1103-70

Export control.

Subpart 1825.70 Foreign Contract and International Agreement Clearances

1825.7000

Scope of subpart.

1825.7001

Definition.

1825.7002

Foreign Contracts.

1825.7003

International Agreements.

1825.003

Definitions.

1825.003-70

NASA definitions.

“Canadian end product”, for an item with an estimated value of $25,000 or less, means an unmanufactured end product mined or produced in Canada or an end product manufactured in Canada, if the cost of its components mined, produced, or manufactured in Canada or the United States exceeds 50 percent of the cost of all its components. The cost of components includes transportation costs to the place of incorporation into the end product. For an end product with an estimated value in excess of $25,000, the definition at FAR 25.003 applies.

Subpart 1825.1— Buy American Act—Supplies

1825.103

Exceptions.

(a)(i) The procurement officer must send proposed public interest determinations to the Associate Administrator for Procurement (Code HS) for approval.

(ii) The Associate Administrator for Procurement has determined that it is inconsistent with the public interest to apply restrictions of the Buy American Act to Canadian end products with estimated values of $25,000 or less as defined in 1825.003-70. Accordingly, contracting officers must evaluate all offers for such Canadian end products on a parity with offers for domestic end products, except that applicable duty (whether or not a duty free entry certificate may be issued) must be included in evaluating offers for Canadian end products.

Subpart 1825.4—Trade Agreements

1825.400

Scope of subpart.

(b) The Buy American Act and the Balance of Payments Program apply to all acquisitions of Japanese end products or services in excess of $2,500.

Subpart 1825.9—Customs and Duties

1825.901

Policy.

NASA has statutory authority to exempt certain articles from import duties, including articles that will be launched into space, spare parts for such articles, ground support equipment, and unique equipment used in connection with an international program or launch service agreement. This authority is fully described in 14 CFR part 1217.

1825.903

Exempted supplies.

(a) Through delegation from the Associate Administrator for Procurement, Procurement Officers are authorized to certify duty free entry for articles imported into the United States, if those articles are procured by NASA or by other U.S. Government agencies, or by U.S. Government contractors or subcontractors when title to the articles is or will be vested in the U.S. Government in accordance with the terms of the contract or subcontract. Procurement officers shall complete Customs Form 7501, Entry Summary (available from your nearest Service Port (http://www.customs.ustreas.gov/​location/​ports/​index.htm) or from (https://extranet.hq.nasa.gov/​nef/​user/​form_​search.cfm)) and the certification set forth in 14 CFR 1217.104(a) or 1217.104(c) (http://www.access.gpo.gov/​nara/​cfr/​cfr-retrieve.html#page1). All duty-free certificates must be coordinated with the center Chief Counsel. Procurement officers must maintain a record of each certification and make this record available for periodic review by NASA Headquarters and the U.S. Customs Service.

Subpart 1825.10—Additional Foreign Acquisition Regulations

1825.1001

Waiver of right to examination of records.

(b) The Administrator is the approval authority for waivers. The contracting officer must submit the waiver request, consisting of the determination and findings prescribed in FAR 25.1001(b) and any relevant supporting information, to the Headquarters Office of Procurement (Code HS).

1825.1002

Use of foreign currency.

(a) The NASA Headquarters Comptroller (Code B) is the designated official for making the determination of the feasibility of using excess or near-excess currency.

Subpart 1825.11—Solicitation Provisions and Contract Clauses

1825.1101

Acquisition of supplies.

(e) The contracting officer must add paragraph (k) as set forth in 1852.225-8, Duty-Free Entry of Space Articles, in solicitations and contracts when the supplies that will be accorded duty-free entry are identifiable before award. Insert the supplies determined in accordance with FAR subpart 25.9 and 1825.903.

1825.1103

Other provisions and clauses.

1825.1103-70

Export control.

(a) Background. (1) NASA contractors and subcontractors are subject to U.S. export control laws and regulations, including the International Traffic in Arms Regulations (ITAR), 22 CFR parts 120 through 130, and the Export Administration Regulations (EAR), 15 CFR parts 730 through 799. The contractor is responsible for obtaining the appropriate licenses or other approvals from the Department of State or the Department of Commerce when it exports hardware, technical data, or software, or provides technical assistance to a foreign destination or “foreign person”, as defined in 22 CFR 120.16, and there are no applicable or available exemptions/exceptions to the ITAR/EAR, respectively. A person who is lawfully admitted for permanent residence in the United States is not a “foreign person”. (See 22 CFR 120.16 and 15 CFR 734.2(b)(2)(ii).)

(2) The exemption at 22 CFR 125.4(b)(3) of the ITAR provides that a contractor may export technical data without a license if the contract between the agency and the exporter provides for the export of the data. The clause at 1852.225-70, Alternate I, provides contractual authority for the exemption, but the exemption is available only after the contracting officer, or designated representative, provides written authorization or direction enabling its use. It is NASA policy that the exemption at 22 CFR 125.4(b)(3) may only be used when technical data (including software) is exchanged with a NASA foreign partner pursuant to the terms of an international agreement in furtherance of an international collaborative effort. The contracting officer must obtain the approval of the Center Export Administrator before granting the contractor the authority to use this exemption.

(b) Contract clause. Insert the clause at 1852.225-70, Export Licenses, in all solicitations and contracts, except in contracts with foreign entities. Insert the clause with its Alternate I when the NASA project office indicates that technical data (including software) is to be exchanged by the contractor with a NASA foreign partner pursuant to an international agreement.

Subpart 1825.70—Foreign Contract and International Agreement Clearances

1825.7000

Scope of subpart.

This subpart prescribes policy and procedures for pre-award clearance of foreign contracts, and for coordination of international agreements that contemplate award of contracts using appropriated funds.

1825.7001

Definition.

Foreign contract acquisition, as used in this subpart, means the acquisition by negotiation of supplies or services, including construction and research and development when the work is to be performed outside the United States, its possessions, and Puerto Rico by a foreign government or instrumentality thereof or by a foreign private contractor. The term does not include—

(a) Negotiation of contracts with domestic concerns involving work to be performed outside the United States, its possessions, and Puerto Rico; or

(b) Contracts with the Canadian Commercial Corporation.

1825.7002

Foreign contracts.

(a) Policy. Following the procedure in paragraph (b) of this section, the Acquisition Team must coordinate with Headquarters before initiating any foreign contract acquisition if the acquisition is valued above $100,000 or involves export control issues. An acquisition involves export control issues if it entails—

(1) Importing or exporting goods or technical data from or to a country listed in 22 CFR 126.1(a) or 126.1(d) (Subchapter M, the International Traffic in Arms Regulations) (http://www.pmdtc.org/​itar2.htm);​;

(2) Importing or exporting Defense Articles or Defense Services on the United States Munitions List at 22 CFR part 121 which would require NASA to obtain a license from the State Department's Office of Defense Trade Controls;

(3) Exporting goods or technical data on the Commerce Control List at 15 CFR part 774 and that require NASA to obtain either a Special or an Individual Validated License;

(4) Importing and/or exporting goods or technical data from or to an entity listed in 15 CFR part 740, Supplement 1, Country Group D; or

(5) Exporting and/or importing of goods, technology, or services to or from any entity subject to transaction control, embargo, or sanctions pursuant to 31 CFR Chapter V.

(b) Procedure.

(1) The Headquarters or field installation technical office requiring a foreign contract acquisition meeting any of the criteria listed in paragraph (a) of this section must submit the following information to the Headquarters Office of External Relations (Code I) through the contracting officer and the Headquarters Office of Procurement (Code HS)—

(i) The name of the foreign entity, the country or countries involved, and the purpose of the contract;

(ii) The Space Act agreement(s) involved, if any;

(iii) A description of the goods or technical data requiring prior written approval or the issuance of the license for their import or export from the Departments of Commerce, State, or Treasury; and

(iv) The reason why the acquisition is being placed with a foreign entity.

(2) All coordination required between NASA and the Departments of Commerce, State, and Treasury regarding foreign contract acquisitions shall be accomplished through the Headquarters Office of External Relations (Code I).

(3) The lead-time for obtaining an export license is 60 to 90 days. Requests for Headquarters clearance should be initiated as early as possible.

1825.7003

International agreements.

Office of Procurement (Code HS) concurrence is required for all Memoranda of Understanding with foreign entities and for other types of international agreements which contemplate the procurement of goods or services using U.S. appropriated funds. No Code H concurrence is required for agreements which are done solely on a cooperative basis.

PART 1852—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Add section 1852.225-8 to read as follows:

1852.225-8

Duty-free entry of space articles.

As prescribed in 1825.1101(e), add the following paragraph (k) to the basic clause at FAR 52.225-8:

(k) The following supplies will be given duty-free entry:

[Insert the supplies that are to be accorded duty-free entry.]

(End of addition)

5. Amend the introductory text of section 1852.225-70 and Alternate I to section 1852.225-70 by deleting “1825.970-2” and adding “1825.1103-70(b)” in its place.

1852.225-71 and 1852.225-7

[Removed]

6. Remove sections 1852.225-71 and 1852.225-73.

PART 1853—FORMS

7. Add Section 1853.225 to read as follows:

1853.225

Foreign Acquisition (Customs Form 7501).

Customs Form 7501, Entry Summary. Prescribed in 1825.903 and 14 CFR 1217.104.