August 17,. 1998
DP (DAR)
In reply refer to
MEMORANDUM FOR DIRECTORS OF DEFENSE AGENCIES
DEPUTY FOR ACQUISITION AND BUSINESS MANAGEMENT, ASN (RD &A) /ABM
DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE (CONTRACTING), SAF/AQC
DEPUTY ASSISTANT SECRETARY OF THE ARMY (PROCUREMENT)
SUBJECT: Letter of Offer and Acceptance
We have amended the Defense Federal Acquisition Regulation Supplement (DFARS) to remove the DD Form 1513, United States Department of Defense Offer and Acceptance, from Part 253 and to revise Subpart 225.73 to refer to the Letter of Offer and Acceptance, rather than the DD Form 1513.
The attached final DFARS rule is effective immediately.
Eleanor R. Spector
Director, Defense Procurement
Attachment
[Federal Register: August 17, 1998 (Volume 63, Number 158)] [Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF DEFENSE
48 CFR Parts 225 and 253
Defense Federal Acquisition Regulation Supplement; Letter of Offer and Acceptance
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
SUMMARY: The Director of Defense Procurement has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to remove references to an obsolete form pertaining to offer and acceptance of foreign military sales (FMS) agreements, and to make other editorial changes pertaining to FMS acquisitions.
FOR FURTHER INFORMATION CONTACT:
Ms. Amy Williams, Defense Acquisition Regulations Council, PDUSD (AT&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0131; telefax (703) 602-0350. Please cite DFARS Case 98-D015.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule amends DFARS Subpart 225.73 and Part 253 to remove references to DD Form 1513, United States Department of Defense Offer and Acceptance, which is no longer used to document FMS agreements. Such agreements are documented in a Letter of Offer and Acceptance.
B. Regulatory Flexibility Act
The final rule does not constitute a significant revision within the meaning of FAR 1.501 and Public Law 98-577 and publication for public comment is not required. However, comments from small entities concerning the affected DFARS subpart will be considered in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 98-D015.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the final rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Parts 225 and 253
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR Parts 225 and 253 are amended as follows:
1. The authority citation for 48 CFR Parts 225 and 253 continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
2. Section 225.7300 is revised to read as follows:
(a) This subpart contains policies and procedures for acquisitions for foreign military sales (FMS) under the Arms Export Control Act[ (22 U.S.C. Chapter 39)]. Section 22 of the Arms Export Control Act[ (22 U.S.C. 2762)] authorizes DoD to enter into contracts for resale to foreign countries or international organizations.
(b) This subpart does not apply to--
(1) [ ][FMS] made from inventories or stocks;
(2) Acquisitions for replenishment of inventories or stocks;[or]
3. Section 225.7301 is amended by revising paragraph (a) introductory text to read as follows:
(a) The U.S. Government sells defense articles and services to foreign governments or international organizations through[ ] FMS agreements. The agreement is documented [in a Letter of] Offer and Acceptance [(LOA) (see DoD 5105.38-M, Security Assistance Management Manual). The LOA]--
* * * * *
4. Section 225.7302 is amended in the introductory text, in paragraph (a)(1), and in paragraph (b) introductory text by removing ``DoD Offer and Acceptance'' and inserting in its place ``LOA''; and in paragraph (b)(1) by removing ``DD Form 1513'' and inserting in its place ``LOA''.
5. The heading of section 225.7303 is revised to read as set forth above.
6. Section 225.7303-2 is amended in paragraph (a)(3)(i) by removing ``foreign military sale Letter of Offer and Acceptance'' and inserting in its place ``LOA''; in paragraph (b) by removing ``foreign military sale'' and inserting in its place ``FMS''; and by revising paragraph (c) introductory text and paragraph (d) to read as follows:
* * * * *
(c) The provisions of 10 U.S.C. 2372 do not apply to contracts for [ ][ FMS]. Therefore, the cost limitations on independent research and development and bid and proposal (IR&D/B&P) costs in FAR 31.205-18 do not apply to such contracts, except as provided in 225.7303-5. The allowability of IR&D/B&P costs on contracts for
[ ][FMS] not wholly paid for from funds made available on a nonrepayable basis shall be limited to the contract's allocable share of the contractor's total IR&D/B&P expenditures. In pricing contracts for such [ ][ FMS]--
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(d) Under [paragraph (e)(1)(A) of] Section 21 of the Arms Export Control Act [ (22 U.S.C. 2761)], the United States must charge for administrative services to recover the estimated cost of administration of sales made under the Army Export Control Act.
7. Section 225.7303-4 is amended by revising paragraph (b)(1) to read as follows:
* * * * *
(b)(1) Under DoD 5105.38-M, [ ][LOAs] for requirements for the governments of Australia, Taiwan, Egypt, Greece, Israel, Japan, Jordan, Republic of Korea, Kuwait, Pakistan, Philippines, Saudi Arabia, Turkey, Thailand, or Venezuela (Air Force) must provide that all U.S. Government contacts resulting from the [ ][LOAs] prohibit the reimbursement of contingent fees as an allowable cost under the contract, unless the payments have been identified and approved in writing by the foreign customer before contract award (see 225.7308(a)).
* * * * *
8. Section 225.7303-5 is amended in paragraph (a) by removing ``foreign military sales'' and inserting in its place ``FMS''; and in paragraph (c) by removing ``foreign military sale Letter of Offer and Acceptance'' and inserting in its place ``LOA''.
9. Section 225.7304 is amended by revising the last sentence of paragraph (a); in paragraph (b)(1) by removing ``A-E'' and inserting in its place ``architect-engineer''; and by revising paragraph (c) to read as follows:
(a) * * * The contracting officer shall honor such requests from the FMS customer only if the [ ][LOA] or other written direction sufficiently fulfills the requirements of FAR [subpart] 6.3.
* * * * *
(c) Do not accept directions from the FMS customer on source selection decisions or contract terms[ ][ (except that, upon timely notice, the contracting officer may attempt to obtain any] special contract provisions and warranties [ ][requested bythe FMS customer)].
* * * * *
10. The heading of section 225.7306 is revised to read as set forth above.
11. Section 225.7308 is amended in paragraphs (a) and (b) by removing ``foreign military sales'' and inserting in its place ``FMS''.
12. The note at the end of Part 253 is amended to remove the entry ``253.303-1513 United States Department of Defense Offer and Acceptance''.