25.703-1
Definitions
For FAR 25.703 compliance, contractors must look beyond the prime entity name and determine whether any covered person—including successors or government-owned commercial enterprises—is involved in Iran-related activities using sensitive technology.
Overview
- FAR 25.703-1 provides the core definitions used in the Iran-related contracting prohibition at FAR 25.703. These definitions determine which entities and technologies are covered when assessing whether a contractor is engaged in prohibited activities involving Iran.
- The section is narrow but important because eligibility for award can depend on whether a party qualifies as a person and whether the activity involves sensitive technology.
Key Rules
- Person
- Includes natural persons and a wide range of private or nongovernmental entities, such as corporations, partnerships, trusts, financial institutions, insurers, underwriters, guarantors, other business organizations, and governmental entities when operating as a business enterprise.
- Also includes any successor to those entities. It does not include a government or governmental entity that is not operating as a business enterprise.
- Sensitive technology
- Covers hardware, software, telecommunications equipment, or other technology used specifically to restrict the free flow of unbiased information in Iran or to disrupt, monitor, or otherwise restrict the speech of the people of Iran.
- Excludes protected information or informational materials whose export the President may not regulate or prohibit under 50 U.S.C. 1702(b)(3).
Responsibilities
- Contracting Officers: apply these definitions when evaluating representations, responsibility, and eligibility under FAR 25.703.
- Contractors: assess corporate structure, affiliates/successors, and technology-related activities involving Iran before certifying compliance.
- Agencies: ensure consistent interpretation of covered entities and covered technology in acquisition decisions.
Practical Implications
- This section exists to support sanctions-related procurement restrictions tied to Iran.
- It affects due diligence, certifications, and risk reviews, especially for multinational firms, financial entities, telecom providers, and technology companies.
- A common pitfall is overlooking successor entities or assuming all government-owned entities are excluded regardless of commercial activity.