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  • Question

    Does this apply to FMS acquisitions? I believe the answer is no. This section provides implementing guidance for Section 1215 of Pub. L. 98-94 (10 U.S.C. 2452 note); which seems to apply to services within the DoD only. The Defense Security Cooperation Agency (DSCA) administers the FMS program for the Department of Defense (DoD), which makes me believe this rule would not apply. Do you concur?


    Answer

    I agree with the Questioners assessment that the 25% rule does not apply to DoD FAR contracts awarded solely for an FMS customer.  My conclusion is based on overall experience working with A&S/DPC International Contracting staff and DSCA staff on similar matters. 

    In my experience, the general principle for DoD FAR contractual arrangements entered into solely for FMS customers is that specific Title 10 constraints -- like this one -- do not apply unless the Title 10 provision (as implemented through the FAR/DFAR) specifically states that the Title 10 constraint should also apply to FMS-related contracts. 

    However, it is my undestanding that if US and FMS requirements for "centrally managed repair parts" subject to the 25% rule were combined by the PM and Contracting Officer into a single contract or order, then the 25% rule should apply to all of the parts in the 'combined US/FMS ' contract/order since all parts would be priced together, affecting the pricing of both US and FMS parts equally.   

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