32.004
Contract performance in foreign countries
Before providing contract financing for contracts performed in foreign countries, contracting officers must ensure the Government’s security interests are enforceable under local law, which may require additional or different security measures.
Overview
FAR 32.004 addresses the enforceability of contract provisions related to Government financing when contracts are performed in foreign countries. It highlights that local laws and procedures in foreign jurisdictions may affect the Government’s ability to enforce its security interests. Before providing contract financing in these situations, contracting officers must verify that the Government’s security interests are enforceable under local law. This may require obtaining additional or alternative forms of security beyond what is typically required in standard contract clauses.
Key Rules
- Enforceability in Foreign Jurisdictions
- Contracting officers must consider local laws and procedures to ensure Government financing security provisions are enforceable in foreign countries.
- Additional or Different Security
- If standard contract clauses do not provide sufficient security under local law, contracting officers must arrange for additional or alternative security measures.
Responsibilities
- Contracting Officers: Must assess enforceability of security provisions in foreign jurisdictions and secure additional protections if necessary before providing contract financing.
- Contractors: May be required to provide different or additional forms of security as a condition of receiving contract financing for performance in foreign countries.
- Agencies: Should support contracting officers in obtaining legal guidance on foreign law as needed.
Practical Implications
- This section exists to protect the Government’s financial interests when contracting abroad.
- It impacts daily contracting by requiring due diligence and possibly legal consultation before financing contracts performed in foreign countries.
- Common pitfalls include assuming standard security provisions are sufficient without considering local legal requirements, which could jeopardize the Government’s ability to recover funds.