Silk:

Raw and manufactures other than Western style suits and Indian saris. Waste.

Skins, deer and goat.

Stones, semiprecious,

thereof, including jewelry. Tapestries, including needlework tapestries. Tapioca, including tapioca flour.

§ 18-6.401-5 Supplies from North Korea or China.

All supplies, however processed, which are or were located in or transported from or through North Korea or China (as described in § 18-6.401-2) shall be presumed to have originated from Sovietcontrolled (Chinese) sources, and shall not be acquired for public use unless such supplies have been lawfully imported into the United States, its possessions, or Puerto Rico.

§ 18-6.402 Exceptions.

(a) Exceptions from the general policy will be made only in accordance with paragraphs (b) and (c) of this section. Moreover, such exceptions shall be made only in cases of emergency, or where supplies are not available from any other source and a substitute supply is not acceptable, or in other unusual situations.

(b) Supplies other than those whose procurement is prohibited by §§ 18-6.4013, 18-6.401-4, and 18-6.401-5, originating from sources within Soviet-controlled areas (see § 18-6.401-2), may be procured only when:

(1) The purchase is for $2,500 or less and the contracting officer determines there is a need for an exception in accordance with the procedures set forth in paragraph (d) (1) (i) or (2) (i) of this section; or

(2) The purchase is for more than $2,500 and an exception is approved by the Administrator in accordance with the procedures set forth in paragraph (d) (1) (ii) or (2) (ii) of this section.

(c) Supplies whose procurement is prohibited by §§ 18-6.401-3, 18-6.401-4, and 18-6.401-5 may be acquired if the acquisition is approved by an authorized Treasury Department representative. Where a request for such approval has been denied by a Treasury Department representative, an appeal may be made by the Administrator to the Secretary of the Treasury when unusual circumstances appear to warrant a departure from the general policy. Such appeals, with all pertinent information shall be submitted through the Procure

ment Office, NASA Headquarters (Code KDP-1).

(d) Procedures. (1) When it is proposed to procure supplies originating from sources within Soviet-controlled areas for public use within the United States (as defined in § 18-6.101 (c)), or when a constuction contractor proposes to use such supplies in the performance of a contract for construction within the United States (as defined in § 18-6.2011), the following procedures should be followed:

(i) If the proposed procurement of such supplies does not exceed $2,500, the contracting officer shall make a determination of nonavailability, as authorized in § 18-6.103-2 or § 18-6.203-1. This determination shall include, in addition to the findings outlined in the determination format set forth in § 18-6.103-2 (c), a finding to the effect that there is no known item or items from sources within non-Soviet-controlled areas which can be used as a reasonable substitute. Such determination shall be made a part of the contract file.

(ii) If the proposed procurement of such supplies exceeds $2,500, the contracting officer shall prepare a determination of nonavailability for signature by the Administrator. The format of the determination set forth in § 18-6.103-2 (c) shall be used and such determination shall include; as an additional finding, a statement to the effect that there is no known item or items from sources within non-Soviet-controlled areas which can be used as a reasonable substitute. Such determination shall be forwarded, in triplicate, to the Office of Procurement.

(2) When it is proposed to procure supplies originating from sources within Soviet-controlled areas for public use elsewhere than within the United States (as defined in § 18-6.101 (c)), or when a construction contractor proposes to use such supplies in the performance of a contract for construction elsewhere than within the United States, the following procedures shall be followed:

(i) If the proposed procurement of such supplies does not exceed $2,500, the contracting officer shall make a written finding setting forth the unusual situation, such as an emergency or the nonavailability of acceptable substitute supplies of domestic or non-Soviet-controlled area origin, which justifies the procurement of supplies originating in a Soviet-controlled area. Such finding shall be made a part of the contract file.

(ii) If the proposed procurement of such supplies exceeds $2,500, the contracting officer shall make a written finding, as described in paragraph (d) (2) (i) of this section. Such finding shall be forwarded, in triplicate, to the Procurement Office, NASA Headquarters for approval by the Administrator of the exception authorizing the proposed procurement. § 18-6.403 Contract clause.

(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 area 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 Schedule 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, of this chapter) 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 Duties and customs on foreign purchases.

Ordinarily, duty must be paid in connection with the importation of supplies purchased by NASA outside the United States as provided in the tariff schedules set forth in 19 U.S.C. 1202 (Public Law 87-456, title III, section 303 (c), approved May 24, 1962; 76 Stat. 78). However, many items are listed in the schedules as being duty-free. Schedule 8 of § 1202 is specifically directed to items which may be imported duty-free under conditions set forth in connection with the various items listed therein. Particular attention is invited to the following authorized exemptions:

(a) Item 832 of Part 3 of Schedule 8 provides that "emergency war materials purchased abroad" may be imported

duty-free upon certification by the Military Departments to the Commissioner of Customs. Accordingly, when a Military Department makes a purchase on behalf of NASA, or when NASA is making a purchase for a Military Department, the above duty-free exemption authority shall be used to the maximum extent practicable. The policies and procedures for effecting duty-free entry of such materials are set forth in ASPR, section VI, part 6;

(b) Item 864.30 of Part 5, Schedule 8 provides for the duty-free exemption of "articles intended solely for testing, experimental or review purposes including plans, specifications, drawings, photographs, and similar articles for use in connection with experimental study" subject to the limitations set forth in headnote 1, under Item 862.20 of Part 5, Schedule 8; and

(c) Certain supplies (not including equipment) for vessels or aircraft operated by the United States are exempt from duty under 19 U.S.C. 1309.

§ 18-6.602 Duty free entry of scientific instruments or apparatus.

(a) Under the Educational, Scientific, and Cultural Materials Importation Act of 1966, NASA has been determined to be an eligible institution to request duty free entry for instruments or apparatus under Items 851.60 and 851.65, Tariff Schedules of the United States (19 U.S.C. 1202 (1970)). Pursuant to this authority, NASA may apply for duty free entry of instruments or apparatus, or related repair components, if no instrument or apparatus of equivalent scientfic value for the purpose for which the instrument or apparatus is intended to be used is bing manufactured in the United States.

(b) Regulations governing procedures for application for duty free entry are set forth in 15 CFR Part 701 and 19 CFR 10.115. To take advantage of this authority, contracting officer shall, with the advice of legal counsel, prepare an application in seven copies on Office of Import Programs Form OIPF-768 in accordance with the cited regulations.

(c) Applications prepared as prescribed above shall be submitted to the Bureau of Customs, Washington, D.C. 20226, Attention: Tariff Classification Rulings. The Office of General Counsel shall represent NASA before the Customs Bureau and the Court of Customs and Patent Appeals.

[39 FR 13120, Apr. 11, 1974]

Subpart 18-6.7-Foreign Contract Procurement

§ 18-6.700 Scope of subpart.

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 of 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 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

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 U.S. 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: DHC), in conjunction with the Offices of International Affairs 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 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: DHC), 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.

(a) General. 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.

(b) Contracts performed in Canada. (1) When, in accordance with the provisions of Subpart 18-51.3, contract administration and related support service functions of the Defense Contract Administration Services are desired on a contract to be performed in Canada (whether placed with Canadian Commercial Corp. or direct with a Canadian firm), a letter of delegation shall be issued to: Defense Contract Administration Services Office, Ottawa, Gillin Building, 141 Laurier Avenue, Ottawa 4, ON Canada.

(2) In order that DCASO, Ottawa may utilize the capabilities of the Canadian Government agencies in the performance of contract administration services functions, each letter of delegation shall provide that the DCASO, Ottawa is delegated authority to act as the contracting officer's representative with power of further delegation for the performance of the requested services.

[36 FR. 21485, Nov. 10, 1971]

§ 18-6.706 Contacts with foreign nationals.

(a) Proposals by NASA staff members which involve program or contract possibilities with foreign nationals shall be

20-130-74- -24

coordinated with the Office of International Affairs, 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 programs or contract matters shall be reported promptly to the Office of International Affairs. (See NASA Policy Directive 1362.1, "Initiation and Development of International Participation and Cooperation in Aeronautical and Space Programs.")

Subpart 18-6.8-Balance of Payments Program-Offshore Procurement

It is the policy of NASA to utilize all possible actions to minimize payments and maximize receipts entering into the balance of payments. In carrying out this policy, procurement offices should, to the maximum extent practicable, ensure that contracts and other obligations incurred in excess and near-excess currency countries are made payable in foreign currencies rather than in U.S. dollars. The expenditures, in these countries, of foreign currencies rather than U.S. dollars provides a saving in the budget and improves the balance of payments situation.

§ 18-6.801-1 Obligations incurred in excess and near-excess currency countries.

NASA procurement offices should establish procedures to ensure that contracts and other obligations incurred in excess and near-excess currency countries are made payable in foreign currencies rather than in U.S. dollars, notwithstanding the appropriation or fund that will be used for payment. This should include contracts with American contractors, to the extent that the contractor may be expected to require such currencies for necessary expenses in the country involved.

an

§ 18-6.801-2 Designation and nouncement of excess currency countries.

Excess and near-excess currency countries are designated by the Treasury Department. The list of countries which the Treasury Department has determined are excess or near-excess to the needs of the United States are announced in Bureau of the Budget Bulletins. The current Bulletin is included as an attachment to NASA Management Instruction 9393.2, "Use of Excess and Near-Excess Foreign Currencies."

Subpart 18-6.10-Exemption of Certain Contracts With Foreign Contractors From the Requirement for an Examination of Records Clause § 18-6.1000 Scope of subpart.

This subpart sets forth policies and procedures for exempting the requirement for the "Examination of Records" clause in contracts with foreign contractors and foreign subcontractors. § 18-6.1001 Statutory requirements.

(a) In accordance with 10 U.S.C. 2313(c), the "Examination of Records" clause may be excluded from negotiated contracts and subcontracts with foreign contractors and foreign subcontractors where:

(1) The Administrator determines, with the concurrence of the Comptroller General or his designee, that inclusion of the clause would not be in the public interest; or

(2) Where

(i) The contractor or subcontractor is a foreign government or agency thereof or is precluded by the laws of the country involved from making its books, documents, papers, or records available for examination, and

(ii) The Administrator determines, after taking into account the price and availability of the property or services from U.S. sources, that the public interest would be best served by exclusion of the clause.

(b) A determination of the Administrator under paragraph (a) (2) of this section does not require the concurrence of the Comptroller General or his designee. However, where a determination of the Administrator under paragraph (a) (2) is the basis for exclusion of the "Examination of Records" clause, the statute requires that a written report be

furnished to the Congress. This report, which shall explain the reasons for the determination, shall be prepared in triplicate, signed by the head of the installation concerned, and forwarded to the Director of Procurement (Code KDP2 for processing to the Administrator.) § 18-6.1002 Policy.

The "Examination of Records" clause shall be included wherever possible. Exclusion of the clause should be allowed only after the contracting officer has made all reasonable efforts to include the clause and has considered such factors as alternate sources of supply, additional cost, and time of delivery. "Foreign Contractor" for purposes of this subpart is defined as "one that is organized or existing under laws of a country other than the United States, it territories, or possessions."

§ 18-6.1003

Requests for determinations and findings.

Request for determinations and findings for exclusion ordinarily will be initiated by the contracting officer. The request shall consist of a letter submitted through normal procurement channels, addressed to the Administrator setting forth all the facts necessary to arrive at an appropriate determination and findings.

§ 18-6.1004 Determination and findings.

The determination and findings made by the Administrator to authorize exclusion of the "Examination of Records" clause from a contract with a foreign contractor or foreign subcontractor under 10 U.S.C. 2313(c) shall:

(a) Identify the contract and its purpose, and state, that it is a contract or subcontract with a foreign contractor or foreign subcontractor, or that the contractor or subcontractor is a foreign government or agency thereof;

(b) Describe the efforts that have been made to include the clause in the contract or subcontract;

(c) State the reasons for the contractor's or subcontractor's refusal to include the clause;

(d) Describe the price and availability of the property or services from United States and other sources; and

(e) Determine that it is in the public interest to exclude the clause pursuant to the provisions of 10 U.S.C. 2313(c).