COMMENT PERIOD FOR FMF/DCC GUIDELINES NOW OPEN
The Defense Security Cooperation Agency (DSCA) is currently soliciting comments on proposed changes to the rules governing the use of foreign military financing for direct commercial contracts. The Guidelines for Foreign Military Financing of Direct Commercial Contracts and Contractor's Certification and Agreement with DSCA, both dated January 2005, are posted to the DSCA website for review and comment. The web address is
http://www.dsca.mil/DSCA_memoranda/fmf_dcc.htm
. Comments may be submitted through the DSCA web mailbox: LPA-WEB@dsca.mil
; or by mail: Defense Security Cooperation Agency, 201 12th Street South, Suite 203, Arlington VA 22202, Attention: DSCA-OPS-MSA/DCC. If you need assistance in obtaining copies of the changes or have other questions, please call the DSCA FMF/DCC office at (703) 601-3714. All comments must be received at DSCA-OPS-MSA/DCC
no later than April 30, 2009.
Summary of Proposed
Revisions
old para 4. DCCs normally will not be permitted for items
that are standard to DoD, e.g., items that have NSNs.
However, the purchasing country may request exceptions from DSCA for the
commercial procurement of standard DoD items. When doing so, the purchasing country must provide written
justification to DSCA supporting its request. The justification should include
the item description, required delivery date, and any other information that may
be pertinent to the exception decision. In those instances where additional
information regarding availability, performance, characteristics, releaseability,
etc. is required, DSCA will consult with the appropriate MilDep or DoD
component.
Revised para 4. DCCs normally
will not be permitted for items that are standard to DoD, e.g., items that have
NSNs. However, the purchasing
country may request exceptions from DSCA for the commercial procurement of
standard DoD items. When doing so,
the purchasing country must provide written justification to DSCA supporting its
request. The justification should include the item description, required
delivery date, and any other information that may be pertinent to the exception
decision. In those instances where additional information regarding
availability, performance, characteristics, releasability, etc. is required,
DSCA will consult with the appropriate MilDep or DoD component.
DSCA will forward the request to the appropriate MilDep which has the
right of first refusal. If the
MilDep agrees to process a sale as a FMS case, a request for a DCC will not be
approved.
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Old para 6E. Any license fee
and/or royalty to be paid by the contractor to a non-U.S. entity must be
identified as non-U.S. content.
New para 8. Any license fee and/or royalty to be paid by
the contractor to a non-U.S. entity must be identified as non-U.S. content.
This non-U.S. content may be approved for funding if it
falls within one of the exceptions in paragraph 6 above.
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New
para 11 Added. Warranty work, such
as maintenance arrangements, to be performed in the host nation or outside of
the U.S. “by a non-U.S. entity”, must be declared as non-U.S. content and
will not be approved for FMF funding.
New
para 12 Added. All host-nation
content must be identified as non-U.S. content and will not be approved for FMF
funding.
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Old Heading: Commissions
or Contingent Fees
Old para 14: Commissions or contingent fees related to the sale must be
disclosed by the contractor during contract negotiations and to DSCA at the time
the contract is presented for funding approval. The contractor shall maintain
documents and records to demonstrate that commissions or contingent fees are not
funded by the USG.
Commissions or contingent fees for the purpose of securing the purchase
agreement may not be included in the price of an FMF funded contract, unless
such payments have been identified and approved in writing by the Purchaser
prior to contract award for payment in full with repayable FMF credit or foreign
Purchaser's national funds.
Revised Heading:
Commissions, Royalties,
or Contingent Fees
New para 20. Commissions, royalties,
or contingent fees related to the sale must be disclosed by the contractor
during contract negotiations and to DSCA at the time the contract is presented
for funding approval. The contractor shall maintain documents and records to
demonstrate that commissions, royalties,
or contingent fees are not funded by the USG.
Commissions,
royalties, or
contingent fees for the purpose of securing the purchase agreement may not be
included in the price of an FMF funded contract, unless such payments have been
identified and approved in writing by the Purchaser prior to contract award for
payment in full with repayable FMF credit or foreign Purchaser's national funds.
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Old para 16A. For ocean transportation of FMF shipments, the contractor and
the Purchaser will use, or cause to be used, privately owned U.S. flag
commercial vessels. For contractor-originated ocean shipments, the contractor
will, within 20 days of loading, submit one legible copy of the rated on-board
ocean bill of lading for each shipment to: Chief, Division of National Cargo,
Office of Market Development, Maritime Administration, U.S. Department of
Transportation, 400-7th Street, S.W., Washington, DC 20590. The bill of lading
will identify: contract number; name of vessel; flag of registry; date and port
of loading; port of final discharge; description, weight, and value of cargo;
and total ocean freight revenue.
New para 23A. For ocean
transportation of FMF shipments, the contractor and the Purchaser will use, or
cause to be used, privately owned U.S. flag commercial vessels. For
contractor-originated ocean shipments, the contractor will, within 20 days of
loading, submit one legible copy of the rated on-board ocean bill of lading for
each shipment to: US Maritime Administration, Office of Cargo Preference and Domestic Trade,
Civilian Agencies Division, Mail Stop W23-453, 1200 New Jersey Avenue SE,
Washington DC 20590. The bill of lading will identify: contract number; name
of vessel; flag of registry; date and port of loading; port of final discharge;
description, weight, and value of cargo; and total ocean freight revenue.
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Old para 17 A. Only
federally-insured financial institutions rated investment grade or higher shall
issue or confirm an irrevocable letter of credit (ILC).
Unless the financial institution issuing the ILC had letter of credit
business of at least $25 million in the past year, ILCs over $5 million must be
confirmed by another acceptable financial institution that had letter of credit
business of at least $25 million in the past year.
New para 23A. Only
federally-insured financial institutions licensed
in and doing business in the United States, rated investment grade or
higher shall issue or confirm an irrevocable letter of credit (ILC).
Unless the financial institution issuing the ILC had letter of credit
business of at least $25 million in the past year, ILCs over $5 million
must be confirmed by another
acceptable financial institution that had letter of credit business of at least
$25 million in the past year and
otherwise meets all of the requirements for issuing an ILC.
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Old para 17B. DFAS will not
disperse payments to contractors until it receives copies of all letters of
credit, bonding or guarantee documents applicable to the purchase agreement.
Copies must also be sent to DSCA-MEAN-DCC.
New para 23B. Before any ILC is drawn upon, purchasing country
will provide written notification to DSCA/OPS-MSA/DCC of their intent to draw
down funds. This notification will
include rationale for the draw down and acknowledgement that the contractor has
been notified of the intended action. DSCA
will provide written acknowledgment to purchasing country confirming receipt of
country’s letter of intent to draw down on the ILC.
Purchasing country will not draw upon any ILC until they have received
DSCA acknowledgement in writing. At that time, DSCA will notify DFAS of
country’s intended action.
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Old para 18D. Remittances should
be processed as follows:
(1) Payments by check must be
accompanied by a letter, which identifies the purchasing country and the DSCA
case identifier. The check must be made payable to the "United States
Treasury" and mailed to:
DFASDE/ADYMA
Phone: (303) 676-6667
6760 E. Irvington Place
Denver, CO 80279-2000
(2) Payments by wire transfer
should be transferred as follows:
United States Treasury
New York, New York
021-030-004
DFAS-DE/AYADD
Agency Code 3801C
New para 24D. Remittances should be processed as follows:
(1) Payments by check must be
accompanied by a letter, which identifies the purchasing country and the DSCA
case identifier. The check must be made payable to the "United States
Treasury" and mailed to:
Defense
Finance and Accounting Service-Indianapolis Center
DFAS-IN/JAXBA
(Credit Sales)
8899
E. 56th Street
Indianapolis,
IN 46249-6300
(2)
Payments by wire transfer should be transferred as follows:
United
States Treasury
New
York, New York
021-030-004
DFAS-IN/JAXBA
Agency
Code 3801
Refund
from: (Name of
Company/Contractor)
For
purchase made by the: Government of __(Country)__
DSCA
case (Identifier)_______
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Old
para 25. The Defense
Logistics Agency is the executive agency for debarment and suspension
proceedings.
New para 31. The Defense
Contract Management Agency (DCMA) is the executive agency for
debarment and suspension proceedings.
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Old para 25C. Before such
contracts can be considered for FMF funding, the U.S. contractor involved must
take appropriate administrative or legal steps to remove the relevant
organization or individual from the debarment/suspension list. Such action
should be taken directly with the agency that has debarment responsibility.
New para 31C. Before such
contracts can be considered for FMF funding, the U.S. contractor involved must
take appropriate administrative or legal steps to remove the
relevant organization or
individual from the debarment/suspension list. Such action should be taken
directly with the agency that has debarment responsibility.
Proof of removal
from such debarment or suspension lists must be provided to DSCA-OPS-MSA/DCC by
the service provider.
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Old para 26. Use of a U.S.
insurance firm is required if FMF funding is used to pay this cost.
New para 32. Use of a U.S.
insurance firm is normally required if FMF funding is used to pay
this cost.
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Old para 29. Inquiries concerning
these policies and procedures or the contract review process should be directed
to the above address or by phone to (703) 604-6630 or 601-3714.
New para 35. Inquiries concerning
these policies and procedures or the contract review process should be directed
to the above address or by phone to (703) 601-3714 or 604-6580.
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Proposed
Change to the Contractor Certification and Agreement with Defense Security
Cooperation Agency
Added New para 1. Agrees the Contractor will comply in all respects with the “DSCA
Guidelines for Foreign Military Financing of Direct Commercial Contracts” that
were in effect when the contract was
signed. Further, should a newer version of the Guidelines be
published subsequent to contract award, the Contractor agrees to comply in all
respects with the “DSCA Guidelines for Foreign Military Financing of Direct
Commercial Contracts” that is in effect when any amendment or modification to
such a contract is signed.
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All other para numbers have shifted down one (1).
i.e., old para 1 is now para 2
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