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FAR Part 19 applicability in Foreign Countries


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#1 marysuea

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Posted 02 November 2010 - 06:09 PM

FAR Part 19, 19.000 (B) states that "This part, except for subpart 19.6, applies only in the United States or its outlying areas" Our Small Business advisor insists that we complete a DD 2579 for acquisitions in foreign country, because the contracting office is located in the United States. We support many overseas missions, and often have to buy supplies and services in foreign countries. Is it required that we consider US Small Businesses when the mission dictates that we acquire supplies and services in foreign countries, if the contracting office is located in the US?

#2 napolik

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Posted 03 November 2010 - 08:00 AM

FAR Part 19, 19.000 ( B) states that "This part, except for subpart 19.6, applies only in the United States or its outlying areas" Our Small Business advisor insists that we complete a DD 2579 for acquisitions in foreign country, because the contracting office is located in the United States. We support many overseas missions, and often have to buy supplies and services in foreign countries. Is it required that we consider US Small Businesses when the mission dictates that we acquire supplies and services in foreign countries, if the contracting office is located in the US?


A few thoughts. First, you must consider all US firms - large or small - responding to your solicitations. The fact that a US firm responds to a solicitation does not mean that it is entitled to award. There could be responsibility issues such as licenses to do work in the foreign country. However, COC procedures do apply for small businesses. Second, you do not have a blanket "overseas" exception from the publicizing requirements of FAR Subpart 5.2. Third, you could have supplies furnished from the US for delivery overseas. In this case, the SB advisor could set the actions aside.

I would let the SB advisor see the actions. If the work is for services or supplies that can be performed or produced only overseas, I would object to any effort to set these procurements aside.

#3 Jacques

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Posted 03 November 2010 - 08:37 AM

Why are you so sure your advisor is wrong? If a US firm and a US contracting activity enter into a contract that calls for performance overseas, where does the transaction take place for purposes of FAR 19.000(b)?

I don't know the answer, but it doesn't seem quite as clear cut as you make it out. This issue came up back in 2005 with a proposed State Department rule that the Professional Services Council opposed. See 47 GC ? 139 (3/23/05).

Here's some language from FAR Case 91-107, 59 Fed. Reg. 67035, Dec. 28, 1994, that might give you pause:

A contracting agency is required to refer small business nonresponsibility determinations to the Small Business Administration (SBA), even if the contracting agency is located outside the United States. The statutory requirement for referral to the SBA is unrelated to an agency's location. FAR 19.000(b) currently states that "part [19] applies only inside the United States, its territories * * *". It is not clear that overseas buying activities must comply with FAR 19.601, Certificates of Competency and Determinations of Eligibility. This rule clarifies that the statutory requirement for referral to SBA is unrelated to an agency's location.

13 CFR 124.502(b)(2) certainly assumes that one could award an 8(a) contract for performance overseas. If the Small Business Act didn't apply to contracts performed overseas, wouldn't a CO be violating CICA it it awarded an 8(a) for performance overseas?

#4 Don Mansfield

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Posted 03 November 2010 - 11:04 AM

FAR Part 19, 19.000 (B) states that "This part, except for subpart 19.6, applies only in the United States or its outlying areas" Our Small Business advisor insists that we complete a DD 2579 for acquisitions in foreign country, because the contracting office is located in the United States. We support many overseas missions, and often have to buy supplies and services in foreign countries. Is it required that we consider US Small Businesses when the mission dictates that we acquire supplies and services in foreign countries, if the contracting office is located in the US?

Your question assumes that if the contracting office is located in the United States and the potential offerors are not, then the purchase will be made outside the United States. What leads you to that conclusion? Where does it say that the location of the contractor, not the contracting office, is determinative of where the purchase is made?

#5 Vern Edwards

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Posted 03 November 2010 - 11:29 AM

There are two questions. First, is a DoD CO working in a contracting office that is located in the U.S. required to process a DD Form 2579 when the work will be done outside the U.S. and its outlying areas. That's not a very interesting question, but I think the answer is yes, since FAR Part 19 applies in the U.S. and its outlying areas.

The second question is much more interesting. Must a CO comply with FAR Subpart 19.5 when acquiring supplies and services for use outside the U.S. and its outlying areas when performance must occur outside the U.S. and its outlying areas? In other words, if there are two responsible small businesses who can do the work and are willing to compete, must the CO set the procurement aside?

I would be very interested in seeing opinions about the answer to that question. Keep in mind that if the acquisition is set aside for small businesses, foreign firms cannot compete unless they have a facility in the U.S. or make a significant contribution to the U.S. economy, since they cannot be small businesses.

#6 napolik

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Posted 03 November 2010 - 12:18 PM

FAR 19.000 (b) says this: "This part, except for Subpart 19.6, applies only in the United States or its outlying areas. Subpart 19.6 applies worldwide." The definition of "outlying areas" set out in FAR Part 2 encompasses specific territories, commonwealths and minor outlying islands. If the overseas performance is outside the "outlying areas", I believe 19.5 does not apply.

Regarding competition for supplies, it seems to me that if the supplies are manufactured in the US or "outlying areas", then the competition is subject to the set aside rule.

BTW, when I worked overseas, my contracting activity's mission excluded contracting in the US. I cannot remember if the words "outlying areas" appeared in the exclusions contained in our mission description. If the supply was to be obtained from a stateside source, a stateside contracting office handled it. That office complied with FAR 19.5.

#7 Jacques

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Posted 03 November 2010 - 12:38 PM

I think napolik hit it out of the park with his first post, which I didn't see when I posted mine. FAR 5.202(a)(12) provides as an exception to the synopsis of proposed contract action requirement:

The proposed contract action is [1] by a Defense agency and [2] the proposed contract action will be made and [3] performed outside the United States and its outlying areas, and only local sources will be solicited. This exception does not apply to proposed contract actions covered by the World Trade Organization Government Procurement Agreement or a Free Trade Agreement (see Subpart 25.4)

If the contracting activity is stateside, then the exception doesn't apply, even though performance is overseas. Synopsize and let the chips fall where they may.

#8 Vern Edwards

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Posted 03 November 2010 - 02:21 PM

Jacques:

The issue is not synopsis. The issue is set-aside. Marysue wants to know if she has to consider a set-aside when the work will be performed outside the U.S.

napolik:

When FAR 19.000(b) says that Part 19 applies only in the U.S. and its outlying areas, what does that mean? It does not say that Part 19 applies only when the work will be performed in the U.S. or its outlying areas, it says Part 19 applies in the U.S. and its outlying areas. The decision whether to set an acquisition aside is part of pre-solicitation planning. If pre-solicitation planning is taking place in the contracts office, and if the contracts office is in the U.S., then why wouldn't Part 19 apply?

#9 Jacques

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Posted 03 November 2010 - 03:02 PM

Vern,

As you know, Part 5 implements both OFPPA & the Small Business Act's synopsis requirements. See 15 USC 637(e), FAR 5.201(a). FAR 5.002© provides that COs publicize actions to, among other things, "Assist small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns in obtaining contracts and subcontracts." Accord, FAR 5.201©.

Seems to me that both the Councils and the SBA know how to write rules that exclude contracts performed entirely outside the US. For contractors that will be awarded and performed entirely outside the US, Part 2 excludes bundling requirements. See definition of bundling. FAR 19.702(b) & 19.708(a)(2) provide that subcontracting plans are not required for contracts that will be performed entirely outside the US. Accord, 15 U.S.C. 637(d)(2) & 13 CFR 125.3(b)(1). Likewise, FAR 19.1202-2(b)(4) does not require evaluation of the extent of SDB participation for contracts that will be performed entirely outside the US.

If, either because of market research, or in response to the synopsis, it becomes apparent that two or more responsible small businesses are capable, why wouldn't the Rule of Two apply?

#10 Vern Edwards

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Posted 03 November 2010 - 03:42 PM

Marysue did not ask about synopses. Your inferences, although they may be valid, are not persuasive. I do not share your faith in the writing ability of the FAR councils and SBA. FAR 19.000(b) is not a model of clarity.

Too many people at Wifcon are willing to pop out an answer without doing research to back it up. No one should believe an unsupported answer from such persons. Instead of trying to be the first kid on the block with a (half-baked) answer, try to find something authoritative in support. In any case, the Rule of Two is not statutory and does not lie in Title 15 of the U.S.C.

And please don't tell me what I know.

#11 napolik

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Posted 04 November 2010 - 11:38 AM

The second question is much more interesting. Must a CO comply with FAR Subpart 19.5 when acquiring supplies and services for use outside the U.S. and its outlying areas when performance must occur outside the U.S. and its outlying areas? In other words, if there are two responsible small businesses who can do the work and are willing to compete, must the CO set the procurement aside?

I would be very interested in seeing opinions about the answer to that question. Keep in mind that if the acquisition is set aside for small businesses, foreign firms cannot compete unless they have a facility in the U.S. or make a significant contribution to the U.S. economy, since they cannot be small businesses.

I have searched to obtain a definitive interpretation of the words at 19.000(b) ''in the United States or its outlying areas''. I have been unable to locate any GAO or court decision on the meaning of the words. However, I infer that the term ''in the United States or its outlying areas'' means where the contract will be performed, not the location of the contracting office and that FAR 19.5 does not apply to contracts performed outside the US or its outlying areas. I base my inference on my reading of FAR and DFARS passages containing the term, on FAR the direction contained in FAR 19.601(e) and on a 2007 Motion to Dismiss filed by a DoD agency to the GAO against a protest citing FAR 19.000(b).

The term ''in the United States or its outlying areas'' appears nearly 30 times in the FAR and the DFARS. The more pertinent passages prescribe usage of provisions and clauses that apply FAR 19. FAR 52.219-1, Small Business Program Representations, is to be used in solicitations exceeding the micro-purchase threshold when the contract will be performed in the United States or its outlying areas. FAR 52.219-2, Equal Low Bids, is to be used in solicitations when the contract will be performed in the United States or its outlying areas. FAR 52.219-8, Utilization of Small Business Concerns is to be used in solicitations and contracts when the contract amount is expected to exceed the simplified acquisition threshold unless (1) a personal services contract is contemplated (see 37.104); or (2) the contract, together with all of its subcontracts, will be performed entirely outside of the United States and its outlying areas. FAR 19.1202-2 requires evaluation of the extent of participation of SDB concerns in contract performance except for contract actions that will be performed entirely outside of the United States and its outlying areas.

The inclusions and exclusions of SB program requirements I cite above are based upon the location of contract performance. The provisions and the rule apply to contracts performed in the US.

FAR 19.601(e) requires contracting officers, including those located overseas, to comply with Subpart 19.6 for U.S. small business concerns. Why would this direction be included if there was not an assumption that worked performed overseas was not covered by the FAR 19 programs?

In addition to looking in the FAR, I searched for any GAO decisions or court cases defining the term ''in the United States or its outlying areas''. I located only a motion to dismiss filed with GAO by the DoD Educational Activity (DoDEA) in November 2007 against two protests of the FitNet Purchasing Alliance. See it here: <a href="http://&quot;http://www.fpaportal.org/FPA/PressDocs/Request_for_dismissal_DOD.pdf.&quot;" target="_blank">http://www.fpaportal.org/FPA/PressDocs/Request_for_dismissal_DOD.pdf.

://http://www.fpaportal.org/FPA/PressD...="3"]</a>The DoDEA sought proposals for gym lockers and for clothing lockers to be delivered to Japan. FitNet argued that the GAO must address the legality of the "foreign exemption" at FAR 19.000(b). One of the two arguments presented by the DoDEA attorney stems from the "plain meaning" of the regulation at 19.000(b). The attorney argues that FAR 19, except for FAR 19.6, does not apply to the DoDEA procurement as Japan is not in the US or its outlying areas. The prescriptions and requirement cited above seem to be consistent with the plain meaning of 19.000(b).

I cannot locate any GAO decision on the protests, so I assume they were dismissed. Nor can I find a GAO dismissal notice.

As may be seen above, the FAR prescribes provisions and requires an evaluation of SDB performance based upon the location of contract performance. Why would you not include the provisions at FAR 52.219-1 or -2 in procurements performed outside the US and outlying areas if they could be set aside?

In addition FAR 19.601(e) requires contracting officers, including those located overseas, to comply with Subpart 19.6 for U.S. small business concerns.

Given the facts that the prescriptions and the requirement exclude overseas performance, and that FAR 19.601(e) specifically applies overseas, I conclude that contracts performed overseas are not covered by FAR 19.5.

Then, there is the issue of the meaning of the term "performance". In my view, services are "performed". Thus, services performed overseas are not covered by FAR 19.5. But, supplies are produced or manufactured. If DLA contracts for MREs to be delivered in the US and to be transshipped overseas, I believe FAR 19.5 would apply since there are US producers of MREs who manufacture them in the US. After reading his motion to dismiss the FitNet protests, I believe the DoDEA attorney would not agree with me.

You may see more information pertinent to the FitNet protest at these sites:



http://www.fpaportal.org/FPA/PressDocs/Espinosa_GAO_Protest_Against_FAR_Exemptions.pdf





http://www.fpaportal.org/FPA/PressDocs/FitNet_Objection_to_Dismiss_B-310699_and_B-310-730.pdf



http://www.fpaportal.org/FPA/PressDocs/Ltr_to_Cong_Towns-GAO_Request.pdf





#12 Vern Edwards

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Posted 04 November 2010 - 11:47 AM

Good analysis, napolik. Makes sense to me.

#13 Don Mansfield

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Posted 04 November 2010 - 01:33 PM

napolik,

Great post. You convinced me by pointing out the prescription for FAR 52.219-1. Would you, then, agree with the following?

1. If supplies are to be delivered or services are to be performed inside the United States and its outlying areas, all of FAR Part 19 applies.

2. If supplies are to be delivered or services are to be performed outside the United States and its outlying areas, only FAR Subpart 19.6 applies.

#14 napolik

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Posted 04 November 2010 - 02:37 PM

napolik,

Great post. You convinced me by pointing out the prescription for FAR 52.219-1. Would you, then, agree with the following?

1. If supplies are to be delivered or services are to be performed inside the United States and its outlying areas, all of FAR Part 19 applies.

2. If supplies are to be delivered or services are to be performed outside the United States and its outlying areas, only FAR Subpart 19.6 applies.


"Yes" to 1. "Yes" to services for 2. "Maybe" to supplies for 2.

I am uncertain about supplies produced in the US for delivery overseas. Certainly it would be nice and easy if one could conclude that the final delivery destination set out in the contract is determinative. In his motion to dismiss, the DoDEA attorney argues FAR Subpart 19.5 does not apply because the final destination for supplies is Okinawa, Japan. (It is worth noting that both of the protested solicitations were issued by a contracting activity located in Guam, one of the territories identified as an "outlying area".)

The FAR uses the term "performed" (e.g. see the prescriptions for 52.219- 1 and - 2). Does "performance" encompass the manufacture or production in the US and delivery overseas? If so, is "performance" outside the United States and its outlying areas if supplies produced in the US are delivered outside the United States and its outlying areas?

It probably is. Chances are, the word "performed" means the destination where the supplies are delivered or the services rendered.

What do you think? Why?

#15 Don Mansfield

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Posted 04 November 2010 - 04:13 PM

"Yes" to 1. "Yes" to services for 2. "Maybe" to supplies for 2.

I am uncertain about supplies produced in the US for delivery overseas. Certainly it would be nice and easy if one could conclude that the final delivery destination set out in the contract is determinative. In his motion to dismiss, the DoDEA attorney argues FAR Subpart 19.5 does not apply because the final destination for supplies is Okinawa, Japan. (It is worth noting that both of the protested solicitations were issued by a contracting activity located in Guam, one of the territories identified as an "outlying area".)

The FAR uses the term "performed" (e.g. see the prescriptions for 52.219- 1 and - 2). Does "performance" encompass the manufacture or production in the US and delivery overseas? If so, is "performance" outside the United States and its outlying areas if supplies produced in the US are delivered outside the United States and its outlying areas?

It probably is. Chances are, the word "performed" means the destination where the supplies are delivered or the services rendered.

What do you think? Why?

In interpreting the prescriptions at FAR 52.219-1 and -2, I think that a supply contract is "performed" at the place of delivery--not where manufacturing and/or production take place. The prescriptions for FAR 52.219-1 and -2 assume that the CO will know where the contract will be performed when creating a solicitation. The CO is not likely to know where the supplies will be manufactured or produced at this point (unless the solicitation specified a place of manufacture, which would be unusual), so it wouldn't make sense to interpret "performed" as "manufactured and/or produced." However, the CO will know where the supplies need to be delivered.

#16 Vern Edwards

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Posted 04 November 2010 - 05:51 PM

Good thinking, Don. That makes sense.

#17 napolik

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Posted 04 November 2010 - 05:52 PM

In interpreting the prescriptions at FAR 52.219-1 and -2, I think that a supply contract is "performed" at the place of delivery--not where manufacturing and/or production take place. The prescriptions for FAR 52.219-1 and -2 assume that the CO will know where the contract will be performed when creating a solicitation. The CO is not likely to know where the supplies will be manufactured or produced at this point (unless the solicitation specified a place of manufacture, which would be unusual), so it wouldn't make sense to interpret "performed" as "manufactured and/or produced." However, the CO will know where the supplies need to be delivered.

That makes sense.

Thank you.

#18 Guest_carl r culham_*

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Posted 04 November 2010 - 10:37 PM

marysuea - Before jumping in with the crowd here I wondered if you have done the full research within your own entity as to the requirements for doing a DD 2579. Conclusions aside that have been offered that I may or may not be in agreement with, the fact remains that some offices and/or agencies, might simply have a requirement to submit the form like it or not, sensible or not for any procurement over $10,000 when the contracting office is located within the US without regard to where the work will actually take place.

Case in point is this reference from Redstone where the instructions once read - (www.redstone.army.mil/osbp/data/DD2579b.doc)

4. DD Form 2579 shall not be prepared when the proposed contract:

a. Will be awarded by Contracting Offices outside the United States, its possessions, and Puerto Rico;



But now read - (http://www.redstone....bp/current.html)

4. DD Form 2579 shall not be prepared when the proposed contract is for:

a. A contract modification or order made pursuant to the terms and conditions of an existing contract (i.e. exercise of option, order against an IDIQ contract, etc.): or

b. A DARPA requirement already reviewed by DARPA OSBP Office.

#19 federalcontracts

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Posted 04 November 2010 - 11:21 PM

1. Applicability of Part 19: AMBIGUITY

19.000(:mellow: "This part, except for Subpart 19.6, applies only in the United States or its outlying areas. Subpart 19.6 applies worldwide."

Read together with FAR 19.601(e), which states, "Contracting officers, including those LOCATED OVERSEAS, are required to comply with this Subpart for U.S. small business concerns," FAR 19.000(B) makes one inclined to at least consider the idea that the so-called foreign exemption is triggered based on where the contracting officer is "located." Part 19 applies only in the United States or its outlying areas. 19.6 applies worldwide, which includes applying 19.6 when contracting officers are located overseas. Is that clear? No, not at all, which is one reason advocacy groups and the SBA recommend either eliminating the foreign exemption or seeking a legislative change. The fact that no statute supports this exemption at FAR 19.000(B) is another reason.

2. Other triggers: Why are they even in there?

When the contract performance location triggers applicability or action, it is written that way, most notably in FAR 19.308.

19.308(a)(1) Insert the provision at 52.219-1, Small Business Program Representations, in solicitations exceeding the micro-purchase threshold when the contract will be performed in the United States or its outlying areas.

19.308© When contracting by sealed bidding, insert the provision at 52.219-2, Equal Low Bids, in solicitations when the contract will be performed in the United States or its outlying areas.

19.308(d) Insert the clause at 52.219-28, Post-Award Small Business Program Rerepresentation, in solicitations and contracts exceeding the micro-purchase threshold when the contract will be performed in the United States or its outlying areas.

If the entire part were inapplicable based on the location of the contract performance, these prescriptions would be unnecessary because the whole part wouldn't apply to contract performance outside the United States and its outlying areas, to include FAR 19.308.

Why, too, wouldn't FAR 19.000(B) just be written as follows?

"This part, except for Subpart 19.6, applies only when the contract will be performed in the United States or its outlying areas. Subpart 19.6 applies for contract performance worldwide." (See discussion infra relating to overseas competitive 8(a) contracts under FAR 19.8 and 13 CFR 124 for a reason why perhaps it is not written that way.)

3. "Performed ENTIRELY outside"

19.702(B) introduces another trigger, "entirely outside," which gets you out of subcontracting plans. The language, too, acquaints us through the word "entirely" that performance could be happening both inside and outside the United States and its outlying areas on the same contract. Item 12 of the DD FORM 2579 covers whether or not a subcontracting plan is required, which is a part of the SB review. If these Small Business folks can find even the slightest bit of U.S. contract performance, they will.

"Subcontracting plans (see subparagraphs (a)(1) and (2) of this section) are not required -- For contracts or contract modifications that will be performed ENTIRELY outside of the United States and its outlying areas."

Why would this language even exist if the entire Part 19 doesn't apply (except 19.6) based on the contract performance location outside the United States and its outlying areas? 19.702(B)(3) wouldn't apply (based on this reading of the foreign exemption) in the very instance it was referencing.

4. THE REGULATIONS clearly support use of Part 19 for contract performance overseas. How can this be if the entire part doesn't apply based on contract performance location?

13 CFR 124.502(B)(2) "For competitive and open construction requirements, to the SBA district office serving the geographical area in which the work is to be performed or, in the case of such contracts TO BE PERFORMED OVERSEAS, to the Office of 8(a) BD located in SBA Headquarters."

DFARS PGI 219.804-2(4) "For competitive requirements for construction TO BE PERFORMED OVERSEAS, submit the notification to SBA Headquarters."

How could a Contracting Officer honestly use Part 19 for competitive 8(a) requirements for construction TO BE PERFORMED OVERSEAS if the entire part doesn't apply based on the overseas contract performance location? Could you honestly argue that you can have a competitive overseas 8(a) construction contract under FAR 19.8, but then argue that you don't have to submit a DD Form 2579 because Part 19 doesn't apply? That doesn't seem right.

FAR 19.800(e) indicates, "The contracting officer shall insert the clause at 52.219-14, Limitations on Subcontracting, in any solicitation and contract resulting from this subpart." You'll note the prescription doesn't say anything about the location of contract performance, as the few in FAR 19.308 do.

The DOS supplemented at DOSAR 619.000(B) "It is the Department?s policy to provide maximum opportunities for U.S. small businesses to participate in the acquisition process. DOS contracts that are awarded domestically for performance overseas shall be subject to the Small Business Act as a matter of policy. Contracts that are both awarded and performed overseas should comply on a voluntary basis."

5. ANOTHER NOTION: The OP, at a CONUS-based contracting activity, writes, "We support many overseas missions, and often have to buy supplies and services in foreign countries." The OP's "buying" is happening CONUS. Clearly the OP doesn't "have to buy" in the foreign countries, which is why the contracting activity is CONUS. The service rendering or the supplies might be needed "in foreign countries," but that's something different than where the "buy" takes place and it is different than where the award is "made."

The DD form 2579: Perhaps the Small Business Advisor wants the OP to ensure that she is synopsizing appropriately and not claiming a synopsis exception (See block 13 of the 2579) -- say, FAR 5.202(a)(12) as Jacques mentioned earlier in the thread -- when he or she knows she should not be based on where the award is being made. Block 13 is another important part of the coordination process. How would small businesses even know you were a conducting a procurement if you improperly claimed the FAR 5.202(a)(12) exception? Perhaps the small business advisor is simply trying to make sure small businesses can participate in the acquisition and know about it, even if it is F&O and not F&O after exclusion of sources.

6. At some point, we will end up discussing this in reverse, as some awards are made outside the United States and its outlying areas for performance inside the United States and its outlying area.

7. The "goaling exclusions," which is a different horse, are written so that the Government does not have to count contracts "performed outside of the United States" against its goals. Some people contend that this supports the "majority view" reflected well in this thread.

8. If all a Program Manager has to do to get rid of part 19 for his procurement is have the stuff he's buying delivered Outside the United States or its outlying areas, that's not a good rule. @Don, do you know what's even easier than knowing where supplies are delivered? Knowing where you (the KO) are. (See FAR 19.601(e))

9. FAR 19.000(B) should be eliminated or rewritten.

#20 Jacques

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Posted 05 November 2010 - 08:17 AM

It does make better sense to interpret FAR 19.000(b) in light of FAR 19.308(a)(1), rather than FAR 5.202(a)(12).

I have been curious as to the source of the ambiguity on this. The ambiguity is well-recognized. See 71 FR 34836, June 16, 2006 (DOS final rule discussed in my earlier post); Federal Contracts Perspective (July 2006) (discussing the DOS final rule).

I think the ambiguity may have resulted from a narrow government argument in Sterile Food Products, Inc., B-172888, July 15, 1971. (This may seem far afield, but the language in ASPR 1-700 continued to DAR 1-700 and then to FAR 19.000(b). ASPR 1-700 (like DAR 1-700) began, "This Part, which applies only in the United States, its possessions, Puerto Rico, and the Trust Territory of the Pacific Islands, implements" the ASPA and the SBA. The similarity to FAR 19.000(b) should be apparent: "This part...applies only in the United States or its outlying areas.")

In Sterile Foods, the government argued that ASPR 1-700 meant that the provisions of the Part "are not to be applied to contracts which are awarded and are to be performed in foreign countries." (emphasis added). The GAO looked to the ASPR and to the SBA regs and found the argument a reasonable one. Under the facts in Sterile Foods, the government had no reason to argue for more.

Both Sterile Foods and the GAO decision that prompted the revision to FAR 19.000(b), Discount Machinery & Equipment, Inc., B-240525, Nov. 23, 1990, 90-2 CPD ? 420, though, clearly give primary deference in interpreting any implementation of the Small Business Act not to the FAR, but to the SBA. (It seems the only difference between Discount Machinery and the decisions it effectively overturned, S.A.F.E. Export Corporation?Request for Reconsideration, B?209491.2, B?209492.2, Oct. 4, 1983, 83?2 CPD ? 413; Manufacturing Systems International, Inc., B-212173, May 30, 1984, 84-1 CPD ? 586, at 1 n2), was a change in SBA's regs.) Interpreting FAR 19.000(b) to extend to contracts awarded domestically but to be performed overseas may be a defensible interpretation, but it may not end up being the winning one, depending on the SBA.




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