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  • Legal won’t allow an FMS FFP contract.

Background:

The DFARS was revised 11/27/2019 (84 CFR 65304) to implement Sections 829 and 830 of the 2017 NDAA, which required use of FFP contract types for FMS (unless and exception or waiver applies).

The DFARS was revised 08/30/2021 (86 CFR 48339) to eliminate the requirement to use FFP contract types for FMS. DFARS Section 225.7301-1 was removed and reserved.

My understanding is that, currently, there is no direction regarding appropriate contract type to use for FMS. DFARS 225.7301 (b) states: 

Quote

Conduct FMS acquisitions under the same acquisition and contract management procedures used for other defense acquisitions.

 

Issue:

To me, that DFARS guidance tells contracting officers to use the appropriate contract type, following the guidance of FAR Part 16 and DFARS Part 216. However, instead I'm being told (by DCMA contracting officers) that:

Quote

Legal won’t allow an FMS FFP contract.

 

Question:

As I know there are many DCMA contracting officers here, I'm asking whether this is a local thing or something that's found in guidance outside the FAR or DFARS? To be clear, I am dealing with experienced COs who frequently deal with FMS cases. I would expect them to be aware of the latest guidance on the topic. However, this one seems to be an instance of the pendulum swinging a bit further than I would have expected. I'd like to push back but, you know, "Legal says" is kind of final these days.

Should I push back, or should I simply accept what I'm being told?

 

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H2H, are you referring to a DCMA legal office or to a Contractor’s legal office? Just curious. 

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I would suggest in addition to checking with DMCA legal, if you have not already, obtain and review the Letter of Offer and Acceptance (LOA) between the foreign county and the US.  It may not indicate the contract type but I found it was an important document and always reviewed it when I worked FMS buys.  I made sure a copy of the LOA was in the contract file. 

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  • 3 weeks later...

Thought I would close the loop on this. Upon further discussion, it turns out that "Legal" didn't say. It was a policy position from the Chief. The Chief prefers cost-type contracts because ... why? I don't know. We were willing to go FFP and take the cost risk.

Anyway, Legal didn't say. The Chief did.

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