Are there any restrictions for U.S. Prime Contractor in hiring or subcontracting TCN's or LN's on a FMFP funded FMS contract for work performed in host country? i.e. If FMFP-funded FMS contract with Mexico requires some work to be performed in Mexico, can U.S. Prime Contractor hire or subcontract TCN's or LN's to support the effort?
The ability to use of Local Nationals (LNs) and Third Country Nationals (TCNs) on FMS contracts is governed by both U.S. laws and regulations as well as those of the FMS Customer. In general, the FMS Program Manager (PM) (if one exists) and/or the Contracting Officer (CO) should obtain specific guidance (and if necessary, approvals) from their local Foreign Disclosure Officer (FDO) regarding the specific situation and circumstances described in the Question. Your Prime Contractor should also be aware of these requirements.
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To assist in discussions with your Prime Contractor and your local FDO, DAU recommends that the FMS PM/CO evaluate/consider the following policy and practices that typically apply in these kinds of situations:
- The restrictions on use of LNs are governed by the U.S. National Industrial Security Program Objective Memorandum (NISPOM) and the USA-MEX General Security Agreement (GSA) which requires that LNs have appropriate clearances/approvals to work on contract tasks that require access to U.S.-origin Classified Military Information (CMI)* and/ or Controlled Unclassified Information (CUI)*. The FMS contract provisions should contain appropriate FAR/DFARS clauses that establish these requirements vis-à-vis contractor/subcontractor performance of such work. If the FMS contract work is Unclassified -- and does not involve U.S.-origin CMI/CUI then LNs
* The terms "CMI" and "CUI" include equipment, technology and information (e.g., tech data) that is Classified or Unclassified Controlled including, but not limited to, export controlled defense articles, services, and tech data as defined in the U.S. Int'l Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR).
- LN contractor/subcontractor access to MEX CMI and/or CUI needed (or generated) in the performance of the FMS contract is governed by MEX laws and regulations.
- LNs working on solely on unclassified FMS contractor/subcontractor work that does not involved export controlled technology or information would not require either USA or MEX access approvals.
- TCNs that would require access to U.S. origin CMI/CUI (included U.S.-origin Export Controlled Information) to perform FMS contract/subcontract work would have to be approved under either an ITAR or EAR export approval by the US Dept of State Directorate of Defense Trade Control, (DDTC)), the US Commerce Department Bureau of Industrial Security, or (possibly) a specific ITAR exemption (check with your FDO on this).
- TCNs that would require access to MEX CMI/CUI to perform FMS contract/subcontract work would have to be approved by the MEX Gov't in accordance with USA-MEX GSA procedures (check with your FDO for further details).
- TCNs working on solely on unclassified FMS contractor/subcontractor work that does not involved export controlled technology or information would not require either USA or MEX access approvals.