DoD Unveils Interim Rule to Define Foreign Military Procurement Cost Offsets

PentagonThe Defense Department is seeking public comments on an interim rule governing indirect offset arrangements under DoD’s foreign military sales program.

DoD said Tuesday in a Federal Register notice that it added a new clause to the Defense Federal Acquisition Regulation Supplement to clarify when offsets not tied directly to military items are a condition of an FMS transaction.

The new rule states that contracting officers do not need to conduct additional analysis of indirect offset cost agreements between a U.S. defense contractor and an international FMS customer.

Foreign buyers shall be notified of price reasonableness determinations through a letter of offer and acceptance, according to DoD.

The department said it wants to implement the policy immediately “to allow DoD contracting officers to finalize pending negotiations for FMS contracts to support U.S. allies and partners, and maintain bilateral relationships.”

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