DATE: April 13, 2000

FROM: Barry McVay, CPCM

SUBJECT: Defense FAR Supplement (DFARS); Closeout of Foreign Military Sales Contract Line Items

SOURCE: Federal Register, April 13, 2000, Vol. 65, No. 72, page 19865

AGENCIES: Department of Defense (DOD)

ACTION: Proposed Rule

SYNOPSIS: DOD is proposing to amend DFARS 204.804, Closeout of Contract Files, to expedite the closeout of Foreign Military Sales (FMS) contract line items under contracts that contain both FMS and non-FMS items. The proposed change would permit closeout of the FMS line items as soon as the closeout requirements for those line items are satisfied.

EDITOR'S NOTE: This action is one of the directives in Deputy Secretary of Defense John J. Hamre's December 13, 1999, memorandum to the secretaries of the military departments and other DOD officials addressing "a number of FMS management problems that manifest themselves in inaccurate or delayed financial management transactions." For more on the memorandum, see the January 3, 2000, FEDERAL CONTRACTS DISPATCH "Department of Defense Memorandum on Foreign Military Sales (FMS) Financial Management, dated December 13, 1999."

DATES: Submit comments on or before June 12, 2000.

ADDRESSES: Submit written comments to Defense Acquisition Regulation Council, Attn: Ms. Melissa Rider, PDUSD (AT&L) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062, fax: 703-602-0350. E-mail comments should be addressed to dfars@acq.osd.mil. Cite DFARS Case 2000-D002 in all correspondence related to this proposed rule.

SUPPLEMENTAL INFORMATION: This proposed rule would amend the contract closeout policy at DFARS 204.804 to specify that, if a contract includes FMS contract line items and non-FMS contract line items, the FMS line items should be closeout as soon as the closeout requirements for those line items are satisfied.

The current introductory text of DFARS 204.804 reads:

"Normally, the closeout date for contract files is the date in Block 9d on the DD Form 1594, Contract Completion Statement, or in columns 59-65 on the PK9. If the contracting office must do a major closeout action that will take longer than 3 months after the date shown in Block 9d of the DD Form 1594, or in columns 59-65 of the PK9 --"

This proposed rule would insert the following new sentence between these two sentences:

"However, if the contract includes Foreign Military Sales (FMS) contact line items and non-FMS contract line items, the FMS contract line items should be closed out as soon as the closeout requirements for those line items are satisfied in accordance with FAR 4.804 [Closeout of Contract Files]."

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

Copyright 2000 by Panoptic Enterprises. All Rights Reserved.

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