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In-house counsel perspective Bryan Van Brunt Associate General Counsel

In-house counsel perspective Bryan Van Brunt Associate General Counsel Director of Division Domestic Contracts 31 March 2008. Berry Amendment Compliance. Multiple changes and new guidance over past 2 years Rule changes (COTS) Class deviations Discontinuance of “conditional acceptance”

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In-house counsel perspective Bryan Van Brunt Associate General Counsel

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  1. In-house counsel perspective Bryan Van Brunt Associate General Counsel Director of Division Domestic Contracts 31 March 2008

  2. Berry Amendment Compliance • Multiple changes and new guidance over past 2 years • Rule changes (COTS) • Class deviations • Discontinuance of “conditional acceptance” • Different rules depending on which time period in which a contract was formed • Ex. • Fasteners exempted in 2007, but no longer with passage of NDAA • Conditional acceptance MAY permitted on older ongoing contracts, but not on those awarded since October 2006 • Challenges for in-house counsel • Ensuring education and compliance at operating locations • Changes are numerous, confusing, and complex • Working with USG to define rules on a contract • Conservative vs. more lenient approaches

  3. Berry Amendment Continued • Subcontractor compliance can be difficult • Small parts on subcontractor components require them to expend resources to find out where they were last melted • Some would rather refuse the contract • Will legislative and rule-making activity continue? • Latest NDAA shows congress is still very interested in Berry Amendment • Protect U.S. sources of supply/ National security • NDAA did provide clarity to what had been rule-making • COTS exception codified • Diminimus exception • Unanswered questions • Level of “policing” required of prime contractors for subs • Standardized response to late discovered non-compliance

  4. National Industrial Base Clauses • Local clauses • Meant to protect industry deemed vital to maintain in the industrial base for national security reasons • Can only use U.S. or Canadian Sources • Often there is only one available source • Issue is presented when the only source for a component which meets the clause standards is a competitor, who is competing against you for the same prime contract. • Competition vs. protection of industrial base is a difficult balance – Solutions in such situations? • Waiver of clause? • Mandatory unit price equality?

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