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Don Mansfield

You Can't Use Clauses

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A new DFARS rule came out recently, adding DFARS 225.7010 Restriction on Certain Naval Vessel Components. DFARS 225.7010-1 states:

225.7010-1 Restriction.

In accordance with 10 U.S.C. 2534, do not acquire the following components of naval vessels, to the extent they are unique to marine applications, unless manufactured in the United States or Canada:Show citation box

(a) Gyrocompasses.

(b ) Electronic navigation chart systems.

(c ) Steering controls.

(d) Pumps.

(e) Propulsion and machinery control systems.

(f) Totally enclosed lifeboats.

What's remarkable is the Implementation section at DFARS 225.7010-4:

225.7010-4 Implementation.

(a) 10 U.S.C. 2534(h) prohibits the use of contract clauses or certifications to implement this restriction.

(b ) Agencies shall accomplish implementation of this restriction through use of management and oversight techniques that achieve the objectives of this section without imposing a significant management burden on the Government or the contractor involved.

So, DoD contracting officers can't buy the components unless they are manufactured in the United States or Canada, but they can't make offerors certify that their components are manufactured in the United States or Canada and they can't use a clause to require manufacture in United States or Canada. Instead, agencies must use "management and oversight techniques" to comply with the restriction.

Does anybody see a way to do this?

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Sounds like a politically-driven train wreck.

We can't tell them what to do, but we're expected to manage and oversee them into doing what Congress wants.

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Unsure if the language means an existing contract clause but with this noted market research and then use brand name or equal specifying a component(s) that is made in either country and state the salient feature that it must a component(s) that is manufactured in one of the two countries?

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Would there not be drawings and Bills of Material?

H2H

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Don, I'd hate to bring in an existing thread, but as a way to get around paragraph (h), what if you included a performance requirement in your statement of work pursuant to FAR 11 that discussed place of manufacture? Edit: Just realized Carl recommended something similar.

Also, what I am confused about is the apparent conflict with the Buy American Act, particularly the evaluation requirements at FAR 25.5. Offerors typically include the place of manufacturer in their Representations and Certifications. Per FAR 4.1202, FAR Provision 52.225-2, Buy American Act Certification, is a required provision.

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Unsure if the language means an existing contract clause but with this noted market research and then use brand name or equal specifying a component(s) that is made in either country and state the salient feature that it must a component(s) that is manufactured in one of the two countries?

Put the requirement in the specification so it wouldn't be a clause? That sounds familiar. Would that be a "management and oversight technique"? Wouldn't that impose a significant management burden on the contractor? (It would impose the same burden as you would if you used a clause).

Would there not be drawings and Bills of Material?

H2H

Do drawings and bills of material typically state where the components must be manufactured?

Also, what I am confused about is the apparent conflict with the Buy American Act, particularly the evaluation requirements at FAR 25.5. Offerors typically include the place of manufacturer in their Representations and Certifications. Per FAR 4.1202, FAR Provision 52.225-2, Buy American Act Certification, is a required provision.

DoD implements the Buy American Act differently than civilian agencies. We don't use the FAR provision and clause. There's a bunch of things that we buy that must be made in the U.S. or the U.S. and Canada pursuant to various Appropriation and Authorization Acts. See DFARS subpart 225.70.

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Don, why not ask the people who buy this stuff how they do it?

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Don, how's this for throwing the gauntlet down: DFARS 225.7010 does not represent an independent restriction on acquiring the components. Rather, it begins, "In accordance with 10 U.S.C. 2534..." That statute, in turn, restricts the Secretary of Defense from procuring certain items. If the contracting officer's authority doesn't derive from the Secretary of Defense's, then DFARS 225.7010 doesn't apply. So, while DFARS 225.7010 may restrict what a defense agency does, as the secretaries of each military department have their own acquisition authority, it doesn't apply to the Army, Navy, or Air Force. (I double dog dare someone to actually rely on this argument.)

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Navy folks, you might want to look at NCMARS 5225.9000, which has been around since at least Change 08-7 (13 Jul 10), and presumably will be removed shortly now that the implementation is in the DFARS, showing the Navy doesn’t buy my argument in Post #8. While the statute and the regulation have changed over the years, the Nov. 2003 version of NCMARS that I found at the Navy website included 5225.7090, which implemented 10 USC 2534 and included the statute-based prohibition on using a clause or certification to implement the restriction. Subsec (h) of the statute, prohibiting a clause or certification, seems to go back to the 1996 defense authorization act (Pub. L. 104-106, sec. 806(a)(4)). Given this history, I share Joel's suggestion in Post #7.

For everyone else, it seems pretty clear from the proposed rule at 79 Fed Reg 56333 (Sept. 19, 2014) that the DFARS Council wouldn’t buy my argument in Post #8 either, as the proposed rule accepts (albeit without analysis) that the statute applies to the Navy.

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