Foreign Contract Acquisition

Keith J. LongContract SpecialistProcurement Operations DivisionOffice for Earth Sciences Code 210.Y

How Many Foreign Acquisition Contracts Awarded at Goddard?

Foreign Contract Awards

0

10

20

30

40

50

60

39

53 52Fiscal Year 10 Fiscal Year 09 Fiscal Year 08

Foreign Acquisition Contracts awarded by NASA Goddard Space Flight Center

(Mostly Simplified Acquisitions)

Federal Authority–Applicable FAR Clauses and Regulations

OutlineDefinition – Foreign Contract Acquisition (NFS 1825.7001)

Rationale – Why use Foreign Contracts?

Procedures – Pre-solicitation, Solicitation, Post-Award

Unique Characteristics– Special requirements

“…means the acquisition by negotiation of supplies or services, including construction work and research and development when the work is to be performed outside the United States by a foreign government or instrumentality thereof or by a foreign private contractor.” NFS 1825.7001

Does not include --

(a) Negotiation of contracts with domestic concerns involving work to be performed outside the United States; or

(b) Contracts with the Canadian Commercial Corporation. 

Foreign Contract Acquisition

Examples:

NOT a Foreign Contract

Operation Ice Bridge: aerial observation and measurement of1. Coastal Greenland2. Coastal Antarctica3. Alaskan Glaciers

Is a Foreign ContractAERONET Program: network

of aerosol robots1. Foreign vendor 2. Supplies robots

Why Do We Need Foreign Acquisitions?

•Globalized Economy

•Specialized Requirements

•International Resources

•Technological Advancements

Federal Authority•FAR Part 25-Foreign Acquisition

•NASA FAR Supplement Part 1825-Foreign Acquisition

FAR Part 25 – Foreign AcquisitionProvides policies and procedures for:

1. Acquisition of foreign supplies, services, and construction materials

2. Contracts performed outside the United States

3. Implements the Buy American Act, trade agreements, and other laws and regulations

https://www.acquisition.gov/far/html/FARTOCP25.html

NASA FAR Supplement Part 1825–Foreign Acquisition

•Buy American Act – Supplies

•Trade Agreements

•Customs and Duties

•Additional Foreign Acquisition Regulations

•Solicitation Provisions and Contract Clauses

•Foreign Contracts and International Agreement Clearances

http://www.hq.nasa.gov/office/procurement/regs/1825.htm

The Acquisition CycleRequirementPurchase RequestFundingSolicitation DocumentEvaluationAwardContract AdministrationTermination -Convenience/DefaultCompletion

2. Solicitation-Award Phase

3. Post-Award Administration

Phase

1. Presolicitation

Phase

Notice of Intent to Award a Foreign Contract

Must coordinate with Headquarters:

•Foreign contract acquisition > $100K•Involves export control issues

Letter must include:(i) -The name of the foreign entity-The country involved-The purpose of the contract(ii) The Space Act agreement(s) involved, if any(iii)Description of the goods/technical data requiring written approval(iv)-The reason why the acquisition is with a foreign entity.

NFS 1852.7002(a)NPD 1050.1

Procurement

Manager

Export Control

Contract Specialis

t

Senior Staff

Associate Chief

Procurement Officer

Contract Specialist

Contracting Officer

HeadquartersMr. Jerry Edmond

The Act restricts the purchase of supplies that are not domestic end products.

Exceptions:(a)Public Interest(b)Nonavailability(c) Unreasonable Cost(d)Resale(e)Information Technology that is a

commercial item

Domestic End Product

i. Article must be manufactured in the United States

ii. The cost of domestic components must exceed 50% of the cost of all components.

The Buy American Act

Example: Discussed with the foreign vendor how currency conversion would occur. (EUR/USD) .The foreign vendor requested to use the exchange rate on the day they issue an invoice. This scenario violates the Anti-Deficiency Act.

If a contract is priced in foreign currency, the agency must ensure that adequate funds are available to cover currency fluctuations to avoid a violation of the Anti-Deficiency Act (31 U.S.C. 1341, 1342, 1511-1519).

Foreign Currency

(31 U.S.C. 1341, 1342, 1511-1519)

Under the Act, if you obligate or expend more than the amount in the appropriation or fund or the amount apportioned or any other subdivision of funds, you shall be subject to appropriate administrative discipline, including—when circumstances warrant—a written reprimand, suspension from duty without pay, or removal from office

Anti-Deficiency Act

•The market for buying and selling different currencies•163 different currencies•Exchange rate – the price of one currency in terms of another•Trading occurs 24 hours a day worldwide•Fast paced, volatile and enormous•Largest market in the world•Estimated $1.2 trillion traded each day

Foreign Exchange Market

•Foreign Exchange Risk – Probability of loss occurring from an adverse movement in foreign exchange rates.

•Problem: Foreign Vendor will want to limit this risk.

•Solution: Create a mechanism to convert price list from foreign currency to U.S. dollars

Foreign Exchange Risk

Contract DetailsFirm Fixed Price/IDIQ 5 years$3,500,000

•GSFC 52.216-91 SUPPLEMENTAL TASK ORDERING PROCEDURES (COST REIMBURSEMENT)(APR 2010)

•Added a separate paragraph to tailor the clause to define currency conversion process.

•Limits the foreign exchange risk to the vendor

A.16 SUPPLEMENTAL ORDERING PROCEDURES (a) When the Government issues a request for a “task plan” for supplies to the Contractor in accordance with the Clause entitled “Task Ordering Procedure” of this contract, the Contractor shall prepare its price quote and proposed delivery schedule to furnish the required items. The Contractor shall use only those unit prices found in Attachment B, converted from Euro (EUR) to US Dollars (USD), to calculate the proposed price for all task orders issued in accordance with the “Task Ordering Procedure” clause of this contract.  (b) The proposed task plan price for all orders shall be designated in USD. The benchmark currency rate for EUR/USD provided by Bloomberg L.P. at the following World Wide Web address http://www.bloomberg.com/markets/currencies/fxc/html, shall be used to calculate the currency conversion from EUR to USD, of the unit prices listed in Attachment B. The benchmark currency rate listed on the day the Government requests the task plan, shall be used to calculate the currency exchange rate for each order. All orders shall be issued in USD only. (c) The Government and Contractor agree that the unit prices found in Attachment B are fully loaded and shall be utilized for all orders issued in accordance with the “Task Ordering Procedure” clause of this contract.  (d) The contractor shall not propose shipping costs on the submitted task plan. Items shall be shipped on the Government’s Federal Express account number 1077-0307-1.( (End of text)

Example

QUESTIONS?