Subpart 25.7
Prohibited Sources
FAR Subpart 25.7 prohibits contracting with certain foreign entities and countries subject to U.S. sanctions, requiring strict due diligence and compliance from both agencies and contractors.
Overview
FAR Subpart 25.7, "Prohibited Sources," establishes the rules and restrictions for U.S. government acquisitions involving certain foreign entities, countries, or sources that are subject to legal or regulatory prohibitions. This subpart outlines prohibitions on contracting with entities or sources identified by the Department of the Treasury, as well as those conducting restricted business operations in Sudan or engaging in certain activities related to Iran. The purpose is to ensure that federal contracts do not support or benefit entities or countries subject to U.S. sanctions or restrictions, thereby aligning procurement practices with U.S. foreign policy and national security interests.
Key Rules
- Scope of Subpart (25.700)
- Defines the applicability of the subpart to acquisitions from prohibited sources.
- Treasury-Administered Restrictions (25.701)
- Prohibits contracting with sources identified by the Department of the Treasury as restricted or prohibited.
- Sudan-Related Prohibitions (25.702)
- Bars contracts with entities conducting restricted business operations in Sudan.
- Iran-Related Prohibitions (25.703)
- Forbids contracts with entities engaged in certain activities or transactions relating to Iran.
Responsibilities
- Contracting Officers: Must verify that prospective contractors are not on prohibited lists and ensure compliance with all restrictions before award.
- Contractors: Must certify they do not conduct restricted business with Sudan or Iran and are not otherwise prohibited sources.
- Agencies: Must maintain oversight and ensure adherence to all applicable sanctions and restrictions.
Practical Implications
- This subpart exists to prevent federal funds from supporting sanctioned countries or entities, protecting U.S. interests.
- Contractors must conduct due diligence to avoid prohibited sources, and failure to comply can result in contract termination or legal penalties.
- Common pitfalls include inadequate screening of subcontractors or misunderstanding the scope of prohibited activities.