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    Many of the Other Transaction and TIA awards are still ongoing and the Recipients are trying to get to a specific production level so that the Government has industrial capacity and to meet ongoing demands. Some firms have asked us if they would be allowed to commercialize some of their capacity prior to the end of the agreement. The agreements do allow this with a government waiver - which has been generally granted. What we don't know is how the DPAS and HRPAS ratings apply if the company commercializes some of their capacity. Do we need to terminate the DPAS or HRPAS ratings? Can the firms continue to build up capacity with the Priority Allocation system while still moving toward commercialization? Are their any limitations or caveats to them doing so?


    Answer

    This response is based on the information provided.  We suggest you discuss with your contracting team, program manager and/or legal department as appropriate. 

     

    As your team knows, the point of assigning rating is to ensure a company keeps its production focus on meeting DX/DO rated contract requirements first.  If commercializing some of its capacity will not affect the company's ability to meet its contractual obligations, we should have no problem.  A rated contract does not change, i.e., the rating does not go away, is not rescinded based on what other business the company is doing.  Again, the point of a rating is to ensure a company understands it can only take on new work to the extent it does not interfere with the rated contract.

     

    To the best of our understanding, once the goal has been met, i.e., you achieved needed capacity, the priority rating is to be cancelled 15 CFR 700.16(e). 

     

    We are including:

     

    "15 CFR Part 700 - DEFENSE PRIORITIES AND ALLOCATIONS SYSTEM"

     

    "AFARS 5111.603 Procedures.

     (e) See DoD 4400.1-M, Department of Defense Priorities and Allocations Manual. Direct questions about areas not covered in  DoD 4400.1-M to:

     G-4 Business Transformation

     Headquarters, U.S. Army Materiel Command

     4400 Martin Road

     Redstone Arsenal, AL 35898."

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