DoD Finalizes Rule on Canadian Commercial Contracting

As posted by Wolters Kluwer Law & Business GC Net News, the Department of Defense has finalized a proposed Defense Federal Acquisition Regulation Supplement rule clarifying the requirements for the Canadian Commercial Corporation to submit data other than certified cost or pricing data.

Pursuant to DFARS 225.870-1 (c), the Canadian Commercial Corporation awards and administers DoD contracts with contractors located in Canada, and DoD has waived the requirement for the Canadian Commercial Corporation and its subcontractors to submit CCPD ( DFARS 215.403-1 (c)(4)(C)). This rule clarifies that the requirement to submit data other than CCPD has not been waived. The rule amends DFARS 215.403-1, DFARS 215.408, DFARS 225.802-70, DFARS 225.870-1, and DFARS 225.870-4.  Further, the rule creates a new solicitation provision, DFARS 252.215-7003, Requirement for Submission of Data Other Than Certified Cost or Pricing Data—Canadian Commercial Corporation, and a new contract clause, DFARS 252.215-7004, Requirement for Submission of Data Other Than Certified Cost or Pricing Data—Modifications-Canadian Commercial Corporation.

Changes to Proposed Rule

The rule makes changes to the proposed version of the rule. Proposed DFARS 215.408(5) has been revised to raise the threshold for cost-reimbursement contracts from the simplified acquisition threshold to $700,000. The level to which the head of the contracting activity can delegate approval authority for using the provision and clause has also been raised. Further, DFARS 225.870-4 (c)(5) and DFARS 252.215-7003 now include FAR 15.403-3 (a)(4) text to notify the contracting officer and the offerors that to be eligible for award, offerors must provide data necessary to determine that the price is fair and reasonable. Finally, DFARS 252.215-7004 has been revised to require data other than CCPD for modifications only when they exceed the simplified acquisition threshold. The CO may modify the clause to specify a higher threshold. The effective date of the rule is July 24, 2012.

The interesting part of this is we may have a cart-before-the-horse scenario in which the DFARS will serve as a catalyst for change to the FAR.  Currently, the FAR is silent as to this requirement pertaining specifically to Canadian companies.  In fact, the only mention of Canada is in 52.212-3, Offeror Representations and Certifications – Commercial Items, and it only pertains to the supply of Canadian end-products.

So, since the DoD is not the only agency doing business with Canada, when do you think the FAR will get a similar amendment?

About Marty Herbert

With 13 years of government contract administration, analysis, finance, and audit experience, I have established a firm baseline in ethics and a specialization in government contracts that has prepared me to become a subject matter expert in my field. I am currently working on enhancing government contracts management and compliance through workflow tools and product offerings - attempting to make the process proactive as opposed to reactive.
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