Defense Trade Treaty

The Pentagon has officially implemented the requirements for a pair of defense trade treaties with the United Kingdom and Australia.

In a Federal Register notice published this morning, the Defense Department states that it "has adopted as final, with changes, the interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement requirements of the Treaty Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning Defense Trade Cooperation (the U.S.-U.K. DTC Treaty) and the Security Cooperation Act of 2010 regarding export control regulations between the United States and the United Kingdom. The final rule also implements the Treaty Between the Government of the United States of America and the Government of Australia Concerning Defense Trade Cooperation."

The notice also includes an analysis of public comments made on an interim version of the regulation implementing the two treaties. For example:

Comment: The same respondent, however, was of the opinion that DoD does not have legal authority to make de facto jurisdictional determinations regarding whether a particular product is a U.S. DoD Treaty-eligible requirement. According to the respondent, contractors do have the right to self-classify, but the only Government entity that can make a definitive determination is the Department of State, Directorate of Defense Trade Controls. The respondent recommended that the final rule establish a process for program managers and contracting officers to coordinate with the Directorate of Defense Trade Controls with respect to determinations regarding solicitations and contract line items that would be suitable for U.S.-U.K. DTC Treaty treatment, so that companies can rely on the determination.

Response: DoD and the U.K. Ministry of Defence have jointly established a Management Board to resolve such issues, adopted a detailed management plan, and conducted Pathfinder Exercises to test the process with industry participants.

DoD slightly revised the wording of the final rule at DFARS 225.7902-4 to address the concern that the program manager and contracting officer do not have the authority to determine Treaty eligibility.