(ii) If the proposed procurement of such supplies exceeds $2,500, the contracting officer shall make a written finding, as described in subdivision (i) of this subparagraph. Such finding shall be

forwarded, in triplicate, to the Office of Procurement 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 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 ɔr 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

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. [31 F.R. 609, Jan. 18, 1966]

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 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.

of

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 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.

(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.

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 the countries named below are made payable in foreign currencies rather than U.S. dollars. The expenditure, in these countries, of foreign currencies rather than U.S. dollars provides a saving in the budget and improves the balance of payments situation. "Special foreign currency program" appropriations for 1965 will be available for purchase of currencies of the following countries in which the Treasury Department has determined that our supply of currencies is to be considered excess to our normal requirements: