Subpart 25.10
Additional Foreign Acquisition Regulations
FAR Subpart 25.10 provides essential supplemental rules for handling waivers, currency, and tax issues in foreign government acquisitions.
Overview
FAR Subpart 25.10, "Additional Foreign Acquisition Regulations," provides supplemental rules for government contracts involving foreign acquisitions. This subpart addresses specific regulatory requirements not covered elsewhere in Part 25, including waivers of the right to examine contractor records, the use of foreign currency in contracts, and the application of taxes on certain foreign procurements. These provisions are designed to address unique challenges and considerations that arise when the U.S. government acquires goods or services from foreign sources or in foreign locations.
Key Rules
- Waiver of Right to Examination of Records
- Outlines circumstances under which the government may waive its right to examine contractor records for foreign acquisitions.
- Use of Foreign Currency
- Establishes when and how foreign currency may be used in government contracts, including payment and pricing considerations.
- Tax on Certain Foreign Procurements
- Details the application of U.S. taxes to specific foreign procurements, including compliance and reporting obligations.
Responsibilities
- Contracting Officers: Must determine when waivers, foreign currency use, or tax provisions apply and ensure contract clauses reflect these requirements.
- Contractors: Must comply with any waivers, currency, and tax provisions specified in the contract.
- Agencies: Oversee compliance and ensure proper documentation and approvals are in place for exceptions or special provisions.
Practical Implications
- This subpart exists to address unique legal, financial, and compliance issues in foreign acquisitions.
- It impacts contract structuring, payment methods, and tax compliance for contracts performed or sourced outside the U.S.
- Common pitfalls include failing to secure proper waivers, mismanaging currency risks, or overlooking tax obligations on foreign procurements.