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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: September 12, 2000

FROM: Barry McVay, CPCM

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Closeout of Foreign Military Sales (FMS) Contract Line Items

SOURCE: Federal Register, September 12, 2000, Vol. 65, No. 177, page 54985

AGENCIES: Department of Defense (DOD)

ACTION: Withdrawal of Proposed Rule

SYNOPSIS: DOD is withdrawing the proposal to amend DFARS 204.804, Closeout of Contract Files, to permit closeout of the FMS line items as soon as the closeout requirements for those line items are satisfied.

EDITOR'S NOTE: For more on the proposed rule, see the April 13, 2000, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Closeout of Foreign Military Sales Contract Line Items."

FOR FURTHER INFORMATION CONTACT: Melissa Rider, Defense Acquisition Regulations Council, OUSD(AT&L)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062; 703-602-4245. Cite DFARS Case 2000-D002 in all correspondence related to this rule.

SUPPLEMENTAL INFORMATION: On April 13, 2000, DOD published a proposed rule that would amend DFARS 204.804 to expedite the closeout of FMS contract line items under contracts that contain both FMS and non-FMS items by permitting closeout of the FMS line items as soon as the closeout requirements for those line items are satisfied.

This proposed rule was in response to 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" (see the January 3, 2000, FEDERAL CONTRACTS DISPATCH "Department of Defense Memorandum on Foreign Military Sales (FMS) Financial Management, dated December 13, 1999"). However, comments on the proposed rule indicated that many automated acquisition systems cannot accommodate this change. Therefore, DOD is withdrawing the proposed rule and is exploring alternative methods of expediting the closeout of FMS contract line items.

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

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