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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: February 10, 2000

FROM: Barry McVay, CPCM

SUBJECT:Defense Federal Acquisition Regulation Supplement (DFARS); People's Republic of China

SOURCE: Federal Register, February 10, 2000, Vol. 65, No. 28, page 6553

AGENCIES: Department of Defense (DOD)

ACTION: Final Rule

SYNOPSIS: DOD is finalizing, with changes, the interim rule that added DFARS 225.771, Prohibition on Acquisition from the People's Republic of China, which placed restrictions on the award of contracts to companies owned or partially owned by the People's Republic of China (mainland China) or the People's Liberation Army of the People's Republic of China.

EFFECTIVE DATE: February 10, 2000.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition Regulations Council, PDUSD(AT&L)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062, 703-602-0288, fax: 703-602-0350. Cite DFARS Case 98-D305.

SUPPLEMENTAL INFORMATION: Section 8120 of the DOD Appropriations Act for Fiscal Year 1999 (Public Law 105-262), placed restrictions on the award of contracts to companies owned or partially owned by the People's Republic of China or the People's Liberation Army of the People's Republic of China. To implement Section 8120, DOD published an interim rule on February 23, 1999, which added DFARS 225.771 and a solicitation provision at DFARS 252.225-7017, Prohibition on Award to Companies Owned by the People's Republic of China. No comments were received on the interim rule.

However, Section 144 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal Year 1999 (Public Law 105-277), amended Section 8120 of Public Law 105-262 to restrict contract award only if the Secretary of Defense determines that the People's Republic of China or the People's Liberation Army of the People's Republic of China owns more than 50% interest in a company. (EDITOR'S NOTE: The Secretary of Defense has delegated the authority for such determinations to the Director of Defense Procurement.) Therefore, this final rule makes the following changes:

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

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