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Get “FAR” Sighted
In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
Join us in this complimentary webinars series as we uncover
each Part of The FAR (Federal Acquisition Regulations) so you can
better understand the rules of the (federal contracting) game.
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
The FAR, or Federal Acquisition Regulation
is the official rule book for how the Federal
Government purchases. It sets uniform
policies and procedures for the federal
acquisition and procurement process.
Webinars are complimentary and recorded.
NOTE: Recordings are posted to our website and YouTube channel.
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
The National Veteran Small Coalition (NVSBC)
is the largest non-profit trade association in the
country representing veteran and service-disabled
veteran-owned small business in the federal
marketplace as prime and subcontractors. NVSBC
provides networking, match-making, coaching, and
training opportunities for members.
Please visit: www.nvsbc.org
PARTNER:
Get “FAR” Sighted In 2020
Sponsors:
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
About Us:
Washington DC Based
Professional Services For Federal Contractors
- GSA Schedule
- SBA 8(a) Certification
- Proposal Writing & Pricing
- Contract Admin
Clients: Products / Professional Services / Software
Reach
Federal Government
Contractors
&
Federal Government
Advertise With Us
19,600+ Subscribers!!
hello@jenniferschaus.com
Hot Topics
In Government Contracting
Virtual Conference – Tuesday, JUNE 23 (8am-1pm)
Session 1 - CMMC Cybersecurity Status - Legal Roundtable
Session 2 - SBA New Regulations - What Does It Mean For Small Business?
Session 3 - Federal Marketing And Business Development Q4 Push - Roundtable
Session 4 - Federal Pricing & Compliance
Session 5 - GWAC and MAC Overview - Who Is Buying What?
Session 6 - COVID-Contracting - Legal Landscape, Opportunities & OTA's
ATTENDEE REGISTRATION: https://register.gotowebinar.com/register/2262848113711115533
SPONSOR REGISTRATION: https://hottopics06232020.eventbrite.com
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
About Our Speaker:
David Dempsey
Dempsey Fontana, PLLC
ddempsey@deftlaw.com
www.deftlaw.com
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
FAR PART 25
Foreign Acquisition
Link:
https://acquisition.gov/content/part-25-foreign-acquisition
June 5, 2020
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
Foreign Acquisitions
► Buy American Act (41 U.SC. 8301-8306):
▪ Ex. Ord. No. 13788 Buy American and Hire American (Apr. 18, 2017)
→ M-17-27 OMB/Commerce Memo guidance (June 30, 2017)
▪ Ex. Ord. No. 13858 Strengthening Buy-American Preferences for Infrastructure Projects (Jan. 31, 2019)
▪ Ex. Ord. No. 13881 Maximizing Use of American-Made Goods, Products, and Materials (Jul. 15, 2019)
→ No FAR Council implementation to date for any of the above
● Preference that supply items and construction materials used in the US be produced in the US
▪ location and >50% cost of domestic components (no “component test” for COTS products)
→ FAR 52.225-1 BAA Supplies (if micro-purchase threshold exceeded: $3,500 / 2,000 / 2,500)
→ FAR 52.225-9 BAA Construction Materials
→ FAR 52.225-18, Place of Manufacture (end product is assembled out of components, or
otherwise made/processed from raw materials into the finished product – but not
disassembly then reassembly)
▪ cost reasonableness of evaluated price: Add 6% + duty to foreign offer if large business is low or 12% + duty if small
business is low – if “foreign offer” still lower domestic offer “unreasonable” (FAR 25.105, 25.204)
● See generally FAR 25.002 “Applicability” chart (supplies, construction, services and inside/outside US)
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
Foreign Acquisitions
FAR Part 25 has 11 sections and 26 clauses
►Buy American Act
►Trade Agreements Act
► Recovery Act
► Performance Outside the U.S.
► Other (e.g., Sudan, Iran, Duty, place of manufacture)
DFARS Part 225 has 18 sections and 51 clauses
►Buy American Act and Balance of Payments Program
►Trade Agreements Act
►Appropriation Act Prohibitions
►Afghanistan
►Private Security
►Export Controls
►Other (e.g., Duty Free Entry, Israeli Secondary Boycott)
HSAR (1); DOSAR (2); NFS (2); DEARS (2); GSAM/R (0); VAAR (0); TAR (0)
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
FOREIGN ACQUISITIONS
► Trade Agreements Act (19 U.S.C. 2501-2577):
● Trade Agreements Act supersedes the Buy American Act
● Prohibition against purchases from non-signatory countries to the WTO GPA or an FTA
▪ definitions: Caribbean Basin country, designated country, FTA country, least developed country, WTO
GPA country, designated country end product, U.S.-made end product, eligible product, eligible offer, foreign
offer, foreign end product
▪ a TAA “end product” is “substantially transformed” in the designated country
→ “article that consists in whole or in part of materials from another country, has been
substantially transformed in Israel into a new and different article of commerce with a name,
character, or use distinct from that of the article or articles from which it was transformed.”
▪ “substantial transformation” test versus “cost of components” test
● Eligibility determined by dollar thresholds issued every 2 years by the USTR for supply, construction and services
FAR 25.402 (chart) (84 Fed. Reg. 70615, Dec. 23, 2019 announced most recent thresholds for 2020 and 2021)
AND
No exceptions apply in US implementation
→ USG has excepted: product groups (see DFARS 225.401-70), small business set-asides, statutory
restrictions, weapons and national defense equipment)
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
FOREIGN ACQUISITIONS
Trade Agreements Act (cont.)
▪ dollar thresholds differ per the relevant agreement (see FAR 25.402(b))
→ Example: Supply contract estimated to exceed $182,000 threshold (including options)
WTO GPA country source not eligible to offer ($182,000 threshold)
Australia FTA country source is eligible ($83,099 threshold)
Canada FTA country source is eligible ($25,000 threshold)
Korea FTA country source is eligible ($100,000 threshold)
Morocco, Oman, Peru, Panama not eligible ($182,000 threshold)
▪ Excluded services (see FAR 25.401(b) and Table therein):
overseas military support services
dredging
transportation service (unless incidental to a supply contract)
R&D
M&O contracts of USG or USG-dedicated facilities (e.g. FFRDCs)
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
FOREIGN ACQUISITIONS
Trade Agreements Act (cont.)
▪ FAR 25.408(a): If the WTO GPA or a FTA applies (dollar threshold is met and no exclusions), contracting officer puts the following in the
synopses: “One or more of the items under this acquisition is subject to [the World Trade Organization Government Procurement
Agreement and] Free Trade Agreements.” See FAR 5.207(c)(14)
▪ FAR 5.203(h) Receipt of offers: no less than 40 days unless agency forecasts for the item are published (then can go to 10 days)
▪ FAR 25.5 Evaluating Foreign Offers:
→ FAR 25.501: CO relies on offeror’s end product certification; eliminate prohibited sources, evaluate each line item
→ FAR 25.502(a)(3): use the evaluated price in the best value decision
→ FAR 25.502(b)(1): if WTO GPA applies evaluate US end products and designated country end products)
→ FAR 25.503: if RFP specifies award on groups of items or offer is restricted to a group of CLINS:
identify lowest evaluated cost on line item basis
→ FAR 25.504: evaluation examples explaining BAA and TAA scenarios
See also, FAR 25.1101 (a)-(d) which advises contracting officer what clauses to use depending of estimated value of the acquisition
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
FOREIGN ACQUISITIONS
FAR 25.3 - Contracts Performed Outside the United States
▪ FAR 25.301 Contractor personnel in a designated operational area or supporting a diplomatic or consular mission outside the
United States
→ Contractor is outside the US in a designated operational area for: contingency, humanitarian or peacekeeping
operation or supporting a diplomatic or consular mission (FAR 25.301-1)
→ Contracting officer must assess if government support is available and needed; seeks to specify any support
provided in the RFP and the contract (FAR 25.301-2)
→ weapons policy for the contract per the combatant commander or the chief of mission under FAR 52.225-19,
Contractor Personnel in a Designated Operational Area or Supporting a Diplomatic or Consular Mission
outside the United States
▪ FAR 25.302 Contractors performing private security functions outside the United States (in an “area of combat operations”
designated by SecDef or area of “significant military operations” per FAR 25.302-2 and -3)
→ guard services and required to carry weapons per FAR 52.225-26 which incorporates 32 C.F.R. Part 159 titled
“Private Security Contractors Operating in Contingency Operations”
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
FOREIGN ACQUISITIONS
FAR 25.6 - American Recovery and Reinvestment Act - Buy American Statute -
Construction Materials
▪ FAR 25.601 Definitions:
→ Domestic construction material means the following:
(1) An unmanufactured construction material mined or produced in the United States. (The Buy American statute
applies.)
(2) A manufactured construction material that is manufactured in the United States and, if the construction material
consists wholly or predominantly of iron or steel, the iron or steel was produced in the United States. (Section 1605
of the Recovery Act applies.)
▪ Section 1605 of the Recovery Act
→ Focused on construction projects: all construction material must contain US produced iron or steel and all
manufactured material must be produced or manufactured in the U.S.
▪ Section 1605 employed a 25% evaluation factor for manufactured construction material and a 6% evaluation factor for
unmanufactured construction material
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
FOREIGN ACQUISITIONS
FAR 25.7 - Prohibited Sources
▪ Enforces economic sanctions imposed by the Office of Foreign Assets Control (OFAC)
▪ FAR 25.700
The Sudan Accountability and Divestment Act of 2007 (Pub. L. 110-174)
The Iran Sanctions (4 public laws) (insert FAR 52.225-25 in all solicitations)
→ FAR 25.701 Unless authorized by OFAC, any transaction with Cuba, Iran, Sudan
see List of Specially Designated Nationals and Blocked Persons at
http://www.treas.gov/offices/enforcement/ofac/sdn (as of June 2, 2020 the List was 1,409 pages)
FAR 25.8 - Other International Agreements and Coordination
→ Contracting officers must determine the existence of any international agreements / treaties
→ Treaties and other international agreements are listed by year at https://www.state.gov/tias/
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
FOREIGN ACQUISITIONS
FAR 25.9 - Customs and Duties
▪ FAR 25.902: “Unless the agency obtains an exemption those shipments [to the USG from foreign countries] are also subject
to duty.”
` → Duty-free entry possible per FAR 52.225-8 if the contractor notifies the CO that duty on imported items to be
delivered as end products or component contract performance may exceed $15,000
→ duty then subcontracted from the price as a credit under FAR 31.201-5 in the invoice
FAR 25.10 Additional Foreign Acquisition Regulations
→ Foreign contractors can get the “Examination of Records by Comptroller General” clause waived (not likely)
▪ FAR 25.1002 Use of foreign currency (CO uses US currency unless a treaty or specific agreement permits foreign currency)
▪ FAR 25.1003 Tax on certain foreign procurements
→ Under FAR 29.204 and FAR 52.229-12 foreign contractors seeking exemption from 2% withholding of excise tax
must submit IRS Form W-14 “Certificate of Foreign Contracting Party Receiving Federal Procurement “Payments”
with the offer and with each invoice to obtain exemption
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
FOREIGN ACQUISITIONS
Department of Defense
Buy American Act (DFARS 225.502)
Application of the BAA/Balance of Payments Program
▪ When purchasing overseas for use overseas, DoD policy is to purchase “domestic end products” and “construction material”
by employing the “Balance of Payments Program” to add an evaluation factor of 50% to further that policy. DFARS
225.7500 (“Use an evaluation factor of 50 percent instead of the factors specified in FAR 25.105(b).”) the 6 and 10% BAA
price evaluation factors).
→ BOPP applies:
(1) when a US offeror or qualifying country offeror compete for the sale of an end product against a
foreign offeror who is neither the US and qualifying country offeror are price evaluated identically and
the foreign offer is price evaluated with an additional 50% (DFARS 225.502(b)(i)(A) and
(2) when a US offeror or designated country offeror is competing for the sale of an end product
against a foreign offeror who is neither the US and designated country offeror are price evaluated
identically and the foreign offer is price evaluated with an additional 50% (DFARS 225.502(b)(i)(B)
See DFARS PGI 225.504 examples.
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
FOREIGN ACQUISITIONS
Department of Defense (cont.)
►Trade Agreements Act (DFARS 225.4)
▪ In DFARS 225.401-70 DoD has identified by Product Service Group those end products subject to the TAA
→ no weapons or weapons-related electronic items but includes PSG 70 – ADP (including firmware), software,
supplies and support equipment
► DFARS 225.401-71 Products or services in support of operations in Afghanistan.
►DFARS PGI 225.9—CUSTOMS AND DUTIES
→ DoD has a duty-free exemption in the HTSUS
► DFARS 225.70 Authorization, Appropriations Acts, and Other Statutory Restrictions
on foreign acquisition (American flag, clothing, certain specialty metals, supercomputers, hand tools,
measuring tools, ball and roller bearings, photovoltaic devices, anchor and mooring chain, forgings, etc.
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
THANK YOU FOR YOUR ATTENTION
© June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
Get “FAR” Sighted In 2020
J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
Thank You For Joining Us!
David Dempsey
ddempsey@deftlaw.com
703. 880. 9171
Hot Topics
In Government Contracting
Virtual Conference – Tuesday, JUNE 23 (8am-1pm)
Session 1 - CMMC Cybersecurity Status - Legal Roundtable
Session 2 - SBA New Regulations - What Does It Mean For Small Business?
Session 3 - Federal Marketing And Business Development Q4 Push - Roundtable
Session 4 - Federal Pricing & Compliance
Session 5 - GWAC and MAC Overview - Who Is Buying What?
Session 6 - COVID-Contracting - Legal Landscape, Opportunities & OTA's
ATTENDEE REGISTRATION: https://register.gotowebinar.com/register/2262848113711115533
SPONSOR REGISTRATION: https://hottopics06232020.eventbrite.com
Get “FAR” Sighted In 2020
Brought To You By:
JSchaus & Associates
Washington DC
PH: 202-365-0598
Hello@JenniferSchaus.com

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Government Contacting - FAR Part 25 - Foreign Acquisition

  • 1. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com Join us in this complimentary webinars series as we uncover each Part of The FAR (Federal Acquisition Regulations) so you can better understand the rules of the (federal contracting) game.
  • 2. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com The FAR, or Federal Acquisition Regulation is the official rule book for how the Federal Government purchases. It sets uniform policies and procedures for the federal acquisition and procurement process. Webinars are complimentary and recorded. NOTE: Recordings are posted to our website and YouTube channel.
  • 3. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com The National Veteran Small Coalition (NVSBC) is the largest non-profit trade association in the country representing veteran and service-disabled veteran-owned small business in the federal marketplace as prime and subcontractors. NVSBC provides networking, match-making, coaching, and training opportunities for members. Please visit: www.nvsbc.org PARTNER:
  • 4. Get “FAR” Sighted In 2020 Sponsors: J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com
  • 5. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com About Us: Washington DC Based Professional Services For Federal Contractors - GSA Schedule - SBA 8(a) Certification - Proposal Writing & Pricing - Contract Admin Clients: Products / Professional Services / Software
  • 6. Reach Federal Government Contractors & Federal Government Advertise With Us 19,600+ Subscribers!! hello@jenniferschaus.com
  • 7. Hot Topics In Government Contracting Virtual Conference – Tuesday, JUNE 23 (8am-1pm) Session 1 - CMMC Cybersecurity Status - Legal Roundtable Session 2 - SBA New Regulations - What Does It Mean For Small Business? Session 3 - Federal Marketing And Business Development Q4 Push - Roundtable Session 4 - Federal Pricing & Compliance Session 5 - GWAC and MAC Overview - Who Is Buying What? Session 6 - COVID-Contracting - Legal Landscape, Opportunities & OTA's ATTENDEE REGISTRATION: https://register.gotowebinar.com/register/2262848113711115533 SPONSOR REGISTRATION: https://hottopics06232020.eventbrite.com
  • 8. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com About Our Speaker: David Dempsey Dempsey Fontana, PLLC ddempsey@deftlaw.com www.deftlaw.com
  • 9. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com FAR PART 25 Foreign Acquisition Link: https://acquisition.gov/content/part-25-foreign-acquisition June 5, 2020
  • 10. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com Foreign Acquisitions ► Buy American Act (41 U.SC. 8301-8306): ▪ Ex. Ord. No. 13788 Buy American and Hire American (Apr. 18, 2017) → M-17-27 OMB/Commerce Memo guidance (June 30, 2017) ▪ Ex. Ord. No. 13858 Strengthening Buy-American Preferences for Infrastructure Projects (Jan. 31, 2019) ▪ Ex. Ord. No. 13881 Maximizing Use of American-Made Goods, Products, and Materials (Jul. 15, 2019) → No FAR Council implementation to date for any of the above ● Preference that supply items and construction materials used in the US be produced in the US ▪ location and >50% cost of domestic components (no “component test” for COTS products) → FAR 52.225-1 BAA Supplies (if micro-purchase threshold exceeded: $3,500 / 2,000 / 2,500) → FAR 52.225-9 BAA Construction Materials → FAR 52.225-18, Place of Manufacture (end product is assembled out of components, or otherwise made/processed from raw materials into the finished product – but not disassembly then reassembly) ▪ cost reasonableness of evaluated price: Add 6% + duty to foreign offer if large business is low or 12% + duty if small business is low – if “foreign offer” still lower domestic offer “unreasonable” (FAR 25.105, 25.204) ● See generally FAR 25.002 “Applicability” chart (supplies, construction, services and inside/outside US) © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 11. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com Foreign Acquisitions FAR Part 25 has 11 sections and 26 clauses ►Buy American Act ►Trade Agreements Act ► Recovery Act ► Performance Outside the U.S. ► Other (e.g., Sudan, Iran, Duty, place of manufacture) DFARS Part 225 has 18 sections and 51 clauses ►Buy American Act and Balance of Payments Program ►Trade Agreements Act ►Appropriation Act Prohibitions ►Afghanistan ►Private Security ►Export Controls ►Other (e.g., Duty Free Entry, Israeli Secondary Boycott) HSAR (1); DOSAR (2); NFS (2); DEARS (2); GSAM/R (0); VAAR (0); TAR (0) © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 12. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com FOREIGN ACQUISITIONS ► Trade Agreements Act (19 U.S.C. 2501-2577): ● Trade Agreements Act supersedes the Buy American Act ● Prohibition against purchases from non-signatory countries to the WTO GPA or an FTA ▪ definitions: Caribbean Basin country, designated country, FTA country, least developed country, WTO GPA country, designated country end product, U.S.-made end product, eligible product, eligible offer, foreign offer, foreign end product ▪ a TAA “end product” is “substantially transformed” in the designated country → “article that consists in whole or in part of materials from another country, has been substantially transformed in Israel into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed.” ▪ “substantial transformation” test versus “cost of components” test ● Eligibility determined by dollar thresholds issued every 2 years by the USTR for supply, construction and services FAR 25.402 (chart) (84 Fed. Reg. 70615, Dec. 23, 2019 announced most recent thresholds for 2020 and 2021) AND No exceptions apply in US implementation → USG has excepted: product groups (see DFARS 225.401-70), small business set-asides, statutory restrictions, weapons and national defense equipment) © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 13. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com FOREIGN ACQUISITIONS Trade Agreements Act (cont.) ▪ dollar thresholds differ per the relevant agreement (see FAR 25.402(b)) → Example: Supply contract estimated to exceed $182,000 threshold (including options) WTO GPA country source not eligible to offer ($182,000 threshold) Australia FTA country source is eligible ($83,099 threshold) Canada FTA country source is eligible ($25,000 threshold) Korea FTA country source is eligible ($100,000 threshold) Morocco, Oman, Peru, Panama not eligible ($182,000 threshold) ▪ Excluded services (see FAR 25.401(b) and Table therein): overseas military support services dredging transportation service (unless incidental to a supply contract) R&D M&O contracts of USG or USG-dedicated facilities (e.g. FFRDCs) © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 14. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com FOREIGN ACQUISITIONS Trade Agreements Act (cont.) ▪ FAR 25.408(a): If the WTO GPA or a FTA applies (dollar threshold is met and no exclusions), contracting officer puts the following in the synopses: “One or more of the items under this acquisition is subject to [the World Trade Organization Government Procurement Agreement and] Free Trade Agreements.” See FAR 5.207(c)(14) ▪ FAR 5.203(h) Receipt of offers: no less than 40 days unless agency forecasts for the item are published (then can go to 10 days) ▪ FAR 25.5 Evaluating Foreign Offers: → FAR 25.501: CO relies on offeror’s end product certification; eliminate prohibited sources, evaluate each line item → FAR 25.502(a)(3): use the evaluated price in the best value decision → FAR 25.502(b)(1): if WTO GPA applies evaluate US end products and designated country end products) → FAR 25.503: if RFP specifies award on groups of items or offer is restricted to a group of CLINS: identify lowest evaluated cost on line item basis → FAR 25.504: evaluation examples explaining BAA and TAA scenarios See also, FAR 25.1101 (a)-(d) which advises contracting officer what clauses to use depending of estimated value of the acquisition © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 15. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com FOREIGN ACQUISITIONS FAR 25.3 - Contracts Performed Outside the United States ▪ FAR 25.301 Contractor personnel in a designated operational area or supporting a diplomatic or consular mission outside the United States → Contractor is outside the US in a designated operational area for: contingency, humanitarian or peacekeeping operation or supporting a diplomatic or consular mission (FAR 25.301-1) → Contracting officer must assess if government support is available and needed; seeks to specify any support provided in the RFP and the contract (FAR 25.301-2) → weapons policy for the contract per the combatant commander or the chief of mission under FAR 52.225-19, Contractor Personnel in a Designated Operational Area or Supporting a Diplomatic or Consular Mission outside the United States ▪ FAR 25.302 Contractors performing private security functions outside the United States (in an “area of combat operations” designated by SecDef or area of “significant military operations” per FAR 25.302-2 and -3) → guard services and required to carry weapons per FAR 52.225-26 which incorporates 32 C.F.R. Part 159 titled “Private Security Contractors Operating in Contingency Operations” © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 16. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com FOREIGN ACQUISITIONS FAR 25.6 - American Recovery and Reinvestment Act - Buy American Statute - Construction Materials ▪ FAR 25.601 Definitions: → Domestic construction material means the following: (1) An unmanufactured construction material mined or produced in the United States. (The Buy American statute applies.) (2) A manufactured construction material that is manufactured in the United States and, if the construction material consists wholly or predominantly of iron or steel, the iron or steel was produced in the United States. (Section 1605 of the Recovery Act applies.) ▪ Section 1605 of the Recovery Act → Focused on construction projects: all construction material must contain US produced iron or steel and all manufactured material must be produced or manufactured in the U.S. ▪ Section 1605 employed a 25% evaluation factor for manufactured construction material and a 6% evaluation factor for unmanufactured construction material © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 17. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com FOREIGN ACQUISITIONS FAR 25.7 - Prohibited Sources ▪ Enforces economic sanctions imposed by the Office of Foreign Assets Control (OFAC) ▪ FAR 25.700 The Sudan Accountability and Divestment Act of 2007 (Pub. L. 110-174) The Iran Sanctions (4 public laws) (insert FAR 52.225-25 in all solicitations) → FAR 25.701 Unless authorized by OFAC, any transaction with Cuba, Iran, Sudan see List of Specially Designated Nationals and Blocked Persons at http://www.treas.gov/offices/enforcement/ofac/sdn (as of June 2, 2020 the List was 1,409 pages) FAR 25.8 - Other International Agreements and Coordination → Contracting officers must determine the existence of any international agreements / treaties → Treaties and other international agreements are listed by year at https://www.state.gov/tias/ © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 18. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com FOREIGN ACQUISITIONS FAR 25.9 - Customs and Duties ▪ FAR 25.902: “Unless the agency obtains an exemption those shipments [to the USG from foreign countries] are also subject to duty.” ` → Duty-free entry possible per FAR 52.225-8 if the contractor notifies the CO that duty on imported items to be delivered as end products or component contract performance may exceed $15,000 → duty then subcontracted from the price as a credit under FAR 31.201-5 in the invoice FAR 25.10 Additional Foreign Acquisition Regulations → Foreign contractors can get the “Examination of Records by Comptroller General” clause waived (not likely) ▪ FAR 25.1002 Use of foreign currency (CO uses US currency unless a treaty or specific agreement permits foreign currency) ▪ FAR 25.1003 Tax on certain foreign procurements → Under FAR 29.204 and FAR 52.229-12 foreign contractors seeking exemption from 2% withholding of excise tax must submit IRS Form W-14 “Certificate of Foreign Contracting Party Receiving Federal Procurement “Payments” with the offer and with each invoice to obtain exemption © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 19. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com FOREIGN ACQUISITIONS Department of Defense Buy American Act (DFARS 225.502) Application of the BAA/Balance of Payments Program ▪ When purchasing overseas for use overseas, DoD policy is to purchase “domestic end products” and “construction material” by employing the “Balance of Payments Program” to add an evaluation factor of 50% to further that policy. DFARS 225.7500 (“Use an evaluation factor of 50 percent instead of the factors specified in FAR 25.105(b).”) the 6 and 10% BAA price evaluation factors). → BOPP applies: (1) when a US offeror or qualifying country offeror compete for the sale of an end product against a foreign offeror who is neither the US and qualifying country offeror are price evaluated identically and the foreign offer is price evaluated with an additional 50% (DFARS 225.502(b)(i)(A) and (2) when a US offeror or designated country offeror is competing for the sale of an end product against a foreign offeror who is neither the US and designated country offeror are price evaluated identically and the foreign offer is price evaluated with an additional 50% (DFARS 225.502(b)(i)(B) See DFARS PGI 225.504 examples. © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 20. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com FOREIGN ACQUISITIONS Department of Defense (cont.) ►Trade Agreements Act (DFARS 225.4) ▪ In DFARS 225.401-70 DoD has identified by Product Service Group those end products subject to the TAA → no weapons or weapons-related electronic items but includes PSG 70 – ADP (including firmware), software, supplies and support equipment ► DFARS 225.401-71 Products or services in support of operations in Afghanistan. ►DFARS PGI 225.9—CUSTOMS AND DUTIES → DoD has a duty-free exemption in the HTSUS ► DFARS 225.70 Authorization, Appropriations Acts, and Other Statutory Restrictions on foreign acquisition (American flag, clothing, certain specialty metals, supercomputers, hand tools, measuring tools, ball and roller bearings, photovoltaic devices, anchor and mooring chain, forgings, etc. © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 21. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com THANK YOU FOR YOUR ATTENTION © June 2020 All Rights Reserved. No part of this information may be reproduced or distributed without the prior written approval of the author
  • 22. Get “FAR” Sighted In 2020 J Schaus & Associates – Washington DC – PH: 202-365-0598 - Hello@JenniferSchaus.com Thank You For Joining Us! David Dempsey ddempsey@deftlaw.com 703. 880. 9171
  • 23. Hot Topics In Government Contracting Virtual Conference – Tuesday, JUNE 23 (8am-1pm) Session 1 - CMMC Cybersecurity Status - Legal Roundtable Session 2 - SBA New Regulations - What Does It Mean For Small Business? Session 3 - Federal Marketing And Business Development Q4 Push - Roundtable Session 4 - Federal Pricing & Compliance Session 5 - GWAC and MAC Overview - Who Is Buying What? Session 6 - COVID-Contracting - Legal Landscape, Opportunities & OTA's ATTENDEE REGISTRATION: https://register.gotowebinar.com/register/2262848113711115533 SPONSOR REGISTRATION: https://hottopics06232020.eventbrite.com
  • 24. Get “FAR” Sighted In 2020 Brought To You By: JSchaus & Associates Washington DC PH: 202-365-0598 Hello@JenniferSchaus.com