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    Are there any prohibitions or limitations with contracting to a foreign government? If so, what are they. If not, would we incorporate all provisions/clauses that we would normally include in our solicitations?


    Answer

    You question is very interesting since it addresses an uncommon situation, the potential benefits and challenges of establishing a FAR contract with a foreign government.

    Prior to addressing the narrower issues involved with using FAR contracts to acquire defense or dual-use articles and/or services from a foreign government, DAU would like to point out that there are other int'l transactions that exist with respect to DoD international acquisition transactions with foreign governments that -- depending on the circumstances -- may be perferrable to a FAR contract:

    1. International Cooperative Program (ICP) international agreements (using either Title 10 or TItle 22 legal authority)
    2. Other Transactioon Authority (OTA) Agreements (using Title 10 authority)
    3. Cooperative R&D Agreements (CRADAs) (using Title 15 U.S.C. 3710)

    DAU recommends the 'fact pattern' of the international acquisition transaction be assessed to determine if one of these options would be a better 'fit' for the outcome desired by both DoD and the foreign government.

    The other area that should be consdered is whether the foreign government is acting as a soverign nation in the transaction, or whether it has created a foreign government conttrolled private sector entity that has been empowered to act on their behalf as a commercial entity.  This happens quite often, particularly when dealing with nations located in Europe and Asia.  It is much easier to enter into a FAR contract with a foreign government-controlled private sector entity since, in most cases, such entities operate as 'business entities'' within the legal and regulatory structure of the nation where they are located, rather than as a soverign nation.

    Notwithstanding these other alternatives, if a FAR contract with a foreign nation acting in its capacity as a soverign nation is the only viable DoD int'l acquisition transaction mechanism available to acheive the desired DoD acquisition outcome, this is still possible.  However, the foreign nation must agree to act as a business entity (rather than a sovereign nation) in the terms of the FAR contract by agreeing to 'customized' FAR contract language that any contractual issues or disputes will be addressed and dispositioned in accordance with U.S. Government laws and regulations (including the FAR and DFARS) as well as any mutually agreed DoD policies that apply to contract performance.  Past experience indicates that very few foreign nations are willing to subject themselves to adjudication of DoD FAR contract issues in the U.S. Government administrative and legal system,.That said, if a foreign nation choses to agree to do so within the terms of a specific FAR/DFARS contract awarded by a DoD Component to acquire articles and services from that foreign nation, DAU is unaware of any legal, regulatory, or policy prohibitions that would prevent the DoD Component from doing so.

    Finally, with respect to specific 'customized' provisions for such FAR/DFARS contract, DAU is unaware of any that have been published.  The most logical course of action would be to consult with DoD Component or OSD/A&S/Director Pricing and Contracting (DPC) experts to find any previous FAR/DFARS contracts that the DoD Component has awarded to a foreign nation to use as a model.

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