52.225-13
Restrictions on Certain Foreign Purchases
Contractors must not acquire supplies or services from sanctioned countries or entities unless authorized by OFAC, and must flow down this restriction to all subcontractors.
Overview
FAR 52.225-13, "Restrictions on Certain Foreign Purchases," prohibits contractors from acquiring supplies or services from certain foreign sources for use in contract performance unless specifically authorized by the Office of Foreign Assets Control (OFAC). The clause implements U.S. government sanctions and embargoes, restricting most transactions involving countries such as Cuba, Iran, Sudan, Burma, and North Korea, as well as entities and individuals listed by OFAC. Contractors must ensure compliance with OFAC regulations and flow down this clause to all subcontractors.
Key Rules
- Prohibition on Certain Foreign Purchases
- Contractors cannot acquire supplies or services from countries or entities subject to OFAC sanctions unless authorized by OFAC.
- Specific Country and Entity Restrictions
- Most transactions involving Cuba, Iran, Sudan, Burma, and North Korea are prohibited, as are dealings with individuals/entities on OFAC’s Specially Designated Nationals (SDN) list.
- Mandatory Flowdown
- Contractors must include this clause in all subcontracts, ensuring subcontractors are also bound by these restrictions.
Responsibilities
- Contracting Officers: Ensure the clause is included in applicable contracts and monitor compliance.
- Contractors: Avoid prohibited transactions, check OFAC lists, obtain necessary authorizations, and flow down the clause to all subcontractors.
- Agencies: Oversee contractor compliance and address violations.
Practical Implications
- This clause exists to enforce U.S. economic sanctions and embargoes in federal contracting.
- Contractors must actively screen suppliers and subcontractors for OFAC restrictions, risking contract breach or legal penalties for non-compliance.
- Common pitfalls include failing to check the SDN list or neglecting to flow down the clause to subcontractors.