1. Foreign Contract Acquisition
Keith J. Long
Contract Specialist
Procurement Operations Division
Office for Earth Sciences Code 210.Y

2. How Many Foreign Acquisition Contracts Awarded at Goddard?
Foreign Acquisition Contracts awarded by NASA Goddard Space Flight Center
(Mostly Simplified Acquisitions)

3. Outline Definition – Foreign Contract Acquisition (NFS 1825.7001)
Rationale – Why use Foreign Contracts?
Federal Authority–Applicable FAR Clauses and Regulations
Procedures – Pre-solicitation, Solicitation, Post-Award
Unique Characteristics– Special requirements

4. Foreign Contract Acquisition
“…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 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.

5. Examples: NOT a Foreign Contract Is a Foreign Contract
Operation Ice Bridge: aerial observation and measurement of
Coastal Greenland
Coastal Antarctica
Alaskan Glaciers
AERONET Program: network of aerosol robots
Foreign vendor
Supplies robots

6. Why Do We Need Foreign Acquisitions?
Globalized Economy
Specialized Requirements
International Resources
Technological Advancements

7. Federal Authority FAR Part 25-Foreign Acquisition NASA FAR Supplement

8. FAR Part 25 – Foreign Acquisition
Provides 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

9. 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

10. The Acquisition Cycle 2. Solicitation-Award Phase
3. Post-Award Administration Phase
1. Presolicitation Phase
Requirement
Purchase Request
Funding
Solicitation Document
Evaluation
Award
Contract Administration
Termination
-Convenience/Default
Completion

11. Notice of Intent to Award a Foreign Contract
Procurement Manager
Export Control
Contract Specialist
Senior Staff
Associate Chief
Procurement Officer
Contracting Officer
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 (a)
NPD
Headquarters
Mr. Jerry Edmond

12. The Buy American Act
Domestic End Product
Article must be manufactured in the United States
The cost of domestic components must exceed 50% of the cost of all components.
The Act restricts the purchase of supplies that are not domestic end products.
Exceptions:
Public Interest
Nonavailability
Unreasonable Cost
Resale
Information Technology that is a commercial item

13. Foreign Currency
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, ).

14. Anti-Deficiency Act (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

15. Foreign Exchange Market
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

16. Foreign Exchange Risk
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

17. Example Contract Details Firm Fixed Price/IDIQ 5 years $3,500,000
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 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 ( (End of text)
Contract Details
Firm Fixed Price/IDIQ
5 years
$3,500,000
GSFC 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

18. QUESTIONS?