On March 22, the Department of Defense (DOD) issued a proposed rule that would amend the Defense Federal Acquisition Regulations (DFARS) to require certain contractors to provide the Defense Contract Management Agency (DCMA) with relevant export authorizations (i.e., export licenses, exemptions, or exceptions). Currently, contractors are only required to make their export authorizations available for DCMA personnel to review at the contractor’s site. This rule would change that by shifting the burden to federal contractors.
The proposed rule would only apply to those contractors performing on contracts that require the following:
- Performance in or delivery to a government quality assurance country.
- Government quality assurance surveillance oversight.
The proposed changes would apply to contracts at or below the simplified acquisition threshold for commercial products including commercially available off-the-shelf items and commercial services.
Government quality assurance countries include:
- Czech Republic
- Republic of Korea
- United Kingdom
DCMA periodically conducts quality assurance reviews to ensure contractors are meeting certain standards. Sometimes DCMA delegates the responsibility to qualified foreign inspectors. The current regulations requiring DCMA personnel to travel to the contractor’s international worksite to view export authorizations unduly hamper the agency’s ability to make that decision. Covered contractors will soon be required to provide the relevant authorizations and contact information for the export point of contact to the applicable DCMA contracting officer, allowing the agency to receive and review the authorizations without the need for lengthy travel. This change will streamline the process by placing the burden on contractors.
DFARS 252.225-7048, Export Controlled Items, will be amended to include the new requirement. The DOD is considering comments to the proposed rule through May 22, 2023.
Please contact the authors with questions about this proposed rule and how it could affect your business.