(a) Except as provided in paragraph (b) of this section, in contracts for supplies, services, or construction, where acceptance is to take place outside the United States, its possessions, or Puerto Rico, the Soviet-controlled areas listed in § 18-6.401-2 shall be set forth in the contract schedule and the following clause shall be included in the contract: SOVIET-CONTROLLED AREAS (SEPTEMBER 1962)

(a) The Contractor shall not acquire for use in the performance of this contract any supplies or services originating from sources within Soviet-controlled areas, as listed in the Scehdule of this contract, or transported from or through Hong Kong or Macao, without the written approval of the Contracting Officer.

(b) The Contractor agrees to insert the provisions of this clause, including this subparagraph (b) and the Soviet-controlled areas listed in the Schedule, in all subcontracts hereunder.

(b) The requirements of paragraph (a) of this section do not apply to purchase orders for small purchases (see Subpart 18-3.6) when there is other reasonable assurance of compliance with the policy set forth in this subpart.

Subpart 18-6.6-Duty and Customs § 18-6.601

Customs, duties on foreign

purchases.

(a) Duty must ordinarily be paid in connection with the importation of supplies purchased by NASA outside the United States. However, the Military Departments have authority to exempt purchases from the payment of duty under 10 U.S.C. 2383, permitting "emergency purchases of war materials abroad." Furthermore, certain supplies (not including equipment) for vessels or aircraft operated by the United States are also exempt from duty under 19 U.S.C. 1309. Accordingly, when a Mili

tary Department makes a purchase on behalf of NASA, or when NASA is making a purchase for a Military Department, the above duty-free exemption authorities shall be used to the maximum extent practicable. The policies and procedures for effecting duty-free entry are set forth in 32 CFR Part 6, Subpart F.

(b) In addition, in the case of articles intended solely for testing, experimental, or review purposes, which are not imported for sale or sale on approval, use of 19 U.S.C. 1308(4) should be considered. This authority permits duty-free entry of the aforementioned items for a a period up to three years, at which time the imported article must be either exported or destroyed. The imported article itself must be the object of the test, experiment, or review; it is not sufficient that the article be used as an aid in the performance of tests, experiments, or reviews.

Subpart 18-6.7-Foreign Contract Procurement

This subpart prescribes policy and procedures relating to the negotiation of foreign contracts.

§ 18-6.701 Definition of foreign contract procurement.

The term "foreign contract procurement" as used in this subpart means the procurement by negotiation of supplies or services, including construction work and contracts for research and development, where the work is to be performed outside the United States, its possessions, and the Commonwealth of Puerto Rico, by a foreign government or instrumentality thereof, or a foreign private contractor. The term does not include the following:

(a) Negotiation of government agreements;

government-to

(b) Negotiation of contracts with domestic concerns which involves work to be performed outside the United States, its possessions, and the Commonwealth of Puerto Rico;

(c) Contracts with the Canadian Commercial Corporation pursuant to Basic Agreement No. NASW-301; or

(d) Procurement of books and periodicals from foreign sources of supply.

§ 18-6.702 Policy.

Foreign contract procurement is a specialized area which often requires involved negotiation with instrumentalities of foreign governments. Some of the requirements for contract clauses imposed by United States laws conflict with statutory prohibitions imposed by foreign countries. The resolution of these issues generally involves close coordination between the Office of International Programs and the Office of General Counsel, NASA Headquarters, and the Department of State. Accordingly, it is the policy of NASA that the responsibility for foreign contract procurement be centralized at NASA Headquarters. § 18-6.703 Assignment of responsibility for contract negotiation.

The Headquarters Contracts Division (Code BC) in conjunction with the Offices of International Programs and General Counsel is responsible for negotiating and executing contracts with foreign governments and private foreign organizations. This assignment of responsibility is specifically limited to foreign contract procurement, as defined in § 18-6.701. § 18-6.704

Procedure.

A Headquarters or field installation technical office requiring a foreign contract procurement to be made will submit a properly approved Purchase Request (NASA Form 404 or similar form), through channels, to the Headquarters Contracts Division, NASA Headquarters (Code BC), for procurement action. In accordance with §18-7.000, contract forms and clauses to be used in foreign

contract procurement will be as prescribed on a case-by-case basis by the Director of Procurement.

§ 18-6.705 Assignment of contract ad

ministration.

Assignment of contract administration responsibility will be made by agreement between the initiating office and the Headquarters Contracts Division. Since principal responsibility for the monitoring of contractor progress and performance generally rests with a field installation, the Headquarters Contracts Division normally will designate the procurement officer of the cognizant field installation as his authorized representative for purposes of contract administration.

§ 18-6.706 Contacts with foreign nationals.

(a) Proposals by NASA staff members which involve program or contract possibilities with foreign nationals shall be coordinated with the Office of International Programs, NASA Headquarters, before any contacts are made with foreign nationals.

(b) Informal discussions between NASA staff members and foreign nationals could give rise to expectations concerning program or contract possibilities which are not supported by program requirements. Such situations must be avoided to preclude possible embarrassment to the United States, as well as to NASA.

(c) Requests or offers by foreign nationals to NASA staff members on program or contract matters shall be reported promptly to the Office of International Programs.