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On Aug. 25, 2022, the Department of Defense (DoD) published two
new interim DFARS rules related to contractors with individuals
performing work in the People’s Republic of China. Both rules
have immediate effect.
These two DFARS clauses, DFARS 252.225-7057 and 252.225-7058,
implement Section 855 of the Fiscal Year 2022 National Defense
Authorization Act. The former clause requires pre-award disclosure
of any individuals working in China, while the latter requires
post-award disclosure of the same. These clauses apply for all DoD
prime and subcontracts valued at over $5 million, except for
commercial products and commercial services contracts (a
“covered contract”).
In addition to the disclosure of any workforce or facilities
located in China, the clauses also cover any business entity
performing work on a covered contract in China, including by
leasing or owning real property used in the performance of the
contract in China.
Both disclosures require information about the total number of
individual employees performing work on a covered contract funded
by the DoD, and a description of the physical location where the
work will be performed. In addition, the pre-award clause requires
disclosure of the proposed use of one or more individuals in
China.
The DoD may not award, extend, or exercise options on any
covered contract unless the required disclosures are made.
Since these are interim rules, the DoD is still taking comments until Oct. 24, 2022.
After this time, it will finalize the rules, either with or without
changes from the public comment period.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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