Do US government agencies need to pay import fees?

[NewbieFed]

If we buy something for a US govt agency from a foreign country (let's say the country is the UK and the value is 500k), does the US govt agency need to pay an import fee to US Customs?

[here_2_help]

You are asking if the US government needs to pay the US government?

If you're a defense contractor, you might want to check out DFARS Part 229.

 

[NewbieFed]

4 minutes ago, here_2_help said:

You are asking if the US government needs to pay the US government?

If you're a defense contractor, you might want to check out DFARS Part 229.

 

Thanks. I am not in the DOD. I am looking in FAR 25, and it says there are exemptions from paying duties on certain purchases...meaning on some purchases, the government still has to pay duties?

 

25.902 Procedures.

For regulations governing importations and duties, see the Customs Regulations issued by the U.S. Customs Service, Department of the Treasury (19 CFR Chapter 1). Except as provided elsewhere in the Customs Regulations (see 19 CFR 10.100), all shipments of imported supplies purchased under Government contracts are subject to the usual Customs entry and examination requirements. Unless the agency obtains an exemption (see 25.903), those shipments are also subject to duty.

 

I realize that the US govt agencies typically don't have to pay taxes, but FAR 25 confuses me, and I was wondering if any fees/duties/etc are similar to interagency transfer of funds agreement because we had situations where we had to transfer funds between different departments and agencies to use certain services.

 

[ji20874]

Are we talking about the Government paying duty?  Or a Government contractor paying duty?  We should not conflate these two.

[NewbieFed]

1 hour ago, ji20874 said:

Are we talking about the Government paying duty?  Or a Government contractor paying duty?  We should not conflate these two.

It is the government/government agency making a purchasing. Is that section referring to Govt contractors paying the duty if they buy equipment for the US govt?

So if a domestic US reseller is importing a foreign product from a foreign company for the US govt agency = the US reseller vendor has to pay the duty?

If the US govt agency was buying directly from the foreign company = nobody has to pay the import duty? Or does the exporting/selling company OR the US agency still have to buy an import duty?

[ji20874]

Generally, all shipments of imported supplies purchased under Government contracts are subject to the usual Customs entry and examination requirements.  Unless the agency obtains an exemption, those shipments are also subject to duty.  See FAR 25.902.  The contract price will include all duty that might be payable.

In such a case, the contractor is responsible for making sure duty is paid -- not the agency.  The contractor will make whatever arrangements are needed -- sometimes, supplies are shipped "duty delivery paid" (DDP) -- sometimes, supplies are shipped "delivery duty unpaid" (DDU).  This is all the contractor's business to handle.

If the agency obtains a post-award exemption to duty, the contracting officer will generally reduce the contract price by the amount of duty that would be payable but for the exemption.  See FAR 52.225-8, para. (c)(3).

[NewbieFed]

On 7/1/2021 at 2:21 PM, ji20874 said:

Generally, all shipments of imported supplies purchased under Government contracts are subject to the usual Customs entry and examination requirements.  Unless the agency obtains an exemption, those shipments are also subject to duty.  See FAR 25.902.  The contract price will include all duty that might be payable.

In such a case, the contractor is responsible for making sure duty is paid -- not the agency.  The contractor will make whatever arrangements are needed -- sometimes, supplies are shipped "duty delivery paid" (DDP) -- sometimes, supplies are shipped "delivery duty unpaid" (DDU).  This is all the contractor's business to handle.

If the agency obtains a post-award exemption to duty, the contracting officer will generally reduce the contract price by the amount of duty that would be payable but for the exemption.  See FAR 52.225-8, para. (c)(3).

Thank you.