FedGovContracts.com

Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: September 11, 2001

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Balance of Payments Program

SOURCE: Federal Register, September 11, 2001, Vol. 66, No. 176, page 47155

AGENCIES: Department of Defense (DOD)

ACTION: Proposed Rule

SYNOPSIS: DOD is proposing to add policy pertaining to the application of the Balance of Payments Program to construction contracts performed outside the United States. The DFARS policy would replace the policy on this subject in FAR Subpart 25.3, Balance of Payments Program, which has been proposed for elimination.

EDITOR'S NOTE: On September 11, 2000, a proposal was published to remove FAR Subpart 25.3 because it applies to very few acquisitions made by civilian agencies and DOD complies with DFARS Subpart 225.3. For more on this proposed rule, see the September 11, 2000, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Balance of Payments Program."

DATES: Comments on the proposed rule must be submitted on or before November 13, 2001.

ADDRESSES: Respondents may submit comments directly on http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm; by e-mail to dfars@acq.osd.mil; to Defense Acquisition Regulations Council, Attn: Amy Williams, OUSD (AT&L) DP (DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; or by fax to 703-602-0350. Cite DFARS Case 2001-D020 when submitting comments.

FOR FURTHER INFORMATION CONTACT: Amy Williams, 703-602-0288.

SUPPLEMENTAL INFORMATION: The Balance of Payments Program (which is like a foreign version of the Buy American Act) applies to purchases of supplies for use outside the U.S. and to construction materials for construction contracts performed outside the U.S. Although DFARS Subpart 225.3 already contains policy that implements the Balance of Payments Program for acquisition of supplies for use outside the United States, DOD uses the FAR Subpart 25.3 policy for construction contracts performed outside the United States.

However, on September 11, 2000, a proposal was published to remove FAR Subpart 25.3. In anticipation of the removal of FAR Subpart 25.3, this proposed revision to the DFARS would remove DFARS Subpart 225.3 (since there would no longer be a FAR Subpart 25.3 to supplement) and move a significant portion of it to a new DFARS Subpart 225.75, Balance of Payments Program. DFARS Subpart 225.75 would also add policy for application of the Balance of Payments Program to DOD construction contracts outside the U.S.

The DFARS Subpart 225.75 application of the Balance of Payments Program to DOD construction contracts would be streamlined over that in FAR Subpart 25.3 by:

The sections in proposed DFARS Subpart 225.75 are equivalent to the current FAR Subpart 25.3 and DFARS Subpart 225.3 sections as follows:

DFARS 225.7503, Contract Clauses, would require DFARS 252.225-70XX, Balance of Payments Program -- Construction Material, in solicitations and contracts for construction to be performed outside the United States with a value greater than the $100,000 simplified acquisition threshold but less than $6,806,000 (this is the threshold for the application of the Trade Agreements Act to construction (the provisions of the Trade Agreements Act take precedence over those of the Balance of Payments Act) -- see FAR Subpart 25.4, Trade Agreements, and the March 31, 2000, FEDERAL CONTRACTS DISPATCH "Procurement Thresholds for Implementation of Trade Agreements Act"). DFARS 252.225-70XX would be a simplified version of FAR 52.225-9, Buy American Act -- Balance of Payments Program -- Construction Material.

DFARS 225.7503 would also require DFARS 252.225-70YY, Balance of Payments Program -- Construction Material Under Trade Agreements, in solicitations and contracts for construction to be performed outside the United States with a value of $6,806,000 or more. For acquisitions with a value of $6,806,000 or more, but less than $7,068,419 (the threshold for application of the North American Free Trade Agreement (NAFTA) to Mexican construction -- see FAR Subpart 25.4, and the March 31, 2000, FEDERAL CONTRACTS DISPATCH "Procurement Thresholds for Implementation of Trade Agreements Act"), Alternate I to DFARS 252.225-70YY would be used. DFARS 252.225-70YY would be a simplified version of FAR 52.225-11, Buy American Act -- Balance of Payments Program -- Construction Material Under Trade Agreements, and Alternate I to DFARS 252.225-70YY would be essentially the same as Alternate I to FAR 52.225-11.

In addition, DFARS 252.225-7005, Identification of Expenditures in the United States, would be revised to implement the applicable requirements of the DOD Financial Management Regulations, Vol. 6A, Chapter 13, International Balance of Payments Reporting and Estimating. DFARS 252.225-7005 contains a requirement that the contractor identify on each invoice, voucher, or other request for payment the part of the requested payment that represents estimated expenditures in the United States, but that the requirement is "limited to payments made pursuant to the requirements either of the United States Products and Services clause, if any, or of any other specific provision of this contract that obligates the Contractor to acquire certain materials, equipment, transportation, or services from U.S. sources." It is proposed that this limitation be removed.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2001 by Panoptic Enterprises. All Rights Reserved.

Return to the Dispatches Library.

Return to the Main Page.