Customer-compliance Requirements:

1.  What:

The United States (US) has entered into International Agreements, Memoranda of Understanding (MOU), and/or NATO Standardization Agreements (STANAG) with other Governments for the reciprocal exchange of contract management (CM) services on either a no-charge or reimbursable basis.  This instruction provides policy to DCMA Contract Management Offices (CMOs) involved in the exchange of CM functions between nations under the provisions of International Agreements, MOUs, and/or NATO STANAGs. 

2.  Why/When:

    2.1.  International Agreements between the United States and Other Governments.  To ensure US compliance with the terms of the agreements, DCMA shall adhere to the provisions and processes of the agreements, MOUs, and/or NATO STANAGs when requesting another Government perform a CM function on behalf of the US or when performing a CM function on behalf of another Government. This policy is applicable to DCMA OCONUS and CONUS CMOs.  When exchanging or performing CM functions under the provisions of International Agreements, the provisions of this instruction shall take precedence over other process guidance.  

    2.2.  Agreement Negotiation.  The Director, Defense Procurement (Office of the Under Secretary of Defense (OUSD) (Acquisition, Technology and Logistics (AT&L)), has responsibility for the development and oversight of International Agreements.  DCMA personnel shall not enter into discussions with personnel from other Governments concerning the establishment of International Agreements or extending the provisions of current International Agreements.  DCMA personnel shall neither conduct the negotiation of an international agreement (including implementation plans), nor request another organization to negotiate an International Agreement, without prior written approval of DoD, obtained through DCMA Command channels.  Reference DoD Directive 5530.3 - International Agreements.

    2.3.  Contract Management Functions.   The CM functions exchanged between the US and other Governments differ from country to country and the specific functions exchanged are specified in the Agreements.  Generally, the functions exchanged are limited to Government Quality Assurance (GQA) and Financial Auditing.  Each Nation's ability to perform a particular CM function is reviewed by the other Government prior to the establishment of the agreement.  OUSD is responsible for final determination of another Nation's capabilities.  DCMA assists OUSD in reviewing the other Nation's capabilities prior to finalization of the agreement.  This is the initial basis of confidence that the CM functions provided by each Nation are capable of meeting the needs of each Government.  DCMA shall lead any effort that provides support to DoD in the determination of another Government's capabilities.

    2.4  NATO Nations - Reciprocal No-charge Agreements.  The US Arms Export Control Act authorizes reciprocal no-charge agreements with NATO Nations with whom the U.S. has an agreement for the exchange of such services.  The US currently has agreements for the exchange of GQA with the following NATO Nations:  Belgium, Canada, Czech Republic, Denmark, France, Germany, Greece, Italy, Netherlands, Norway, Spain, Turkey, and the United Kingdom.  Copies of the agreements are available at the OUSD Defense Procurement, Foreign Contracting website.   Other CAS functions exchanged with NATO Nations or organizations are listed in Table 1301-1 of the DoD 5105.38M, Security Assistance Management Manual.  

        2.4.1  NATO Standardization Agreement (STANAG) No. 4107 - Mutual Acceptance of Government Quality Assurance and Usage of the Allied Quality Assurance Publications, defines the terms, conditions, and authority by which the participating NATO Nations request and exchange GQA.  STANAG 4107 implements Allied Quality Assurance Publication (AQAP)-2070, NATO Mutual Government Quality Assurance Process.

        2.4.2  Allied Quality Assurance Publication (AQAP) - 2070.  AQAP-2070, NATO Mutual Government Quality Assurance (GQA) Process, is implemented by authority of STANAG 4107.  AQAP-2070 is a risk-based process and defines the specific processes and procedures to be used when exchanging GQA services between participating NATO Member Nations. The agreements between the US and NATO Nations, as well as Sweden, direct the exchange of GQA in accordance with the provisions of STANAG 4107 and AQAP-2070 (replaces previously referred documents).   Although Sweden is not a NATO Member Nation, the US/Sweden agreement specifies the use of the AQAP processes.  

        2.4.3  Unless otherwise indicated by US reservation to STANAG 4107, DCMA shall follow the Mutual GQA process as defined in AQAP-2070 when requesting a NATO Member Nation or Sweden to perform GQA and when performing GQA when requested by a NATO Member Nation, NATO organization, or Sweden.  

    2.5.  Non-NATO Nations - Reciprocal Fee-for-Service Agreements.  The US currently has Reciprocal Fee-for-Service Agreements with Australia, Israel, Korea, and Sweden for the exchange of GQA.  DCMA shall follow the process, procedure, terms, and conditions of the individual fee-for-service agreements when requesting Australia, Israel, or Korea to perform GQA and when performing GQA when requested by Australia, Israel, or Korea. 

    2.6.  Other Governments - Reimbursable.  Other Governments that do not currently have a specific agreement with the US for the exchange of CM functions occasionally purchase DCMA's services on a reimbursable basis.  DCMA has the responsibility for designating a DoD Central Control Point (DoDCCP) to receive and process all requests from other Governments for the performance of CM and financial audit services on Direct Commercial Sales (DCS).  The DoDCCP is a part of DCMA-FB.

3.  How

    3.1 Risk Planning

        3.1.1.  All requests for CM support received from other Governments (NATO and Non-NATO) shall be processed through the US DoDCCP.  The CCP shall determine if the request is reimbursable or no-charge and will forward the request to the applicable CMO.   A FCAS number assigned by the DoDCCP identifies requests from other Governments.  Once another Government's request/delegation of CM support is accepted by DCMA, DCMA CMO personnel shall comply with the request from the other Government.

        3.1.2.  DCMA International shall initiate all requests/delegations to other Governments.  Wherever possible, Host Nation support shall be used to perform the required supplier surveillance in accordance with the applicable MOU or NATO STANAG.  Only the minimum surveillance necessary to mitigate the identified risks and to provide confidence in the supplier's ability to perform shall be delegated.  Where Host Nation organizations are paid for the performance of surveillance, CMOs shall consider the cost effectiveness of delegating on a case-by-case basis.  Requests for GQA to NATO Nations shall be sent electronically to the Host Nation's email address identified in Annex A of STANAG 4107.   

        3.1.3.  The QAR shall review the contract and identify deficiencies noted during the review.  Deficiencies that require a contract modification shall be reported to the PCO on DD Form 1716, Contract Data Package Recommendation/Deficiency Report.  The remaining risk items not effected by the deficiencies should be delegated to the Host Nation while the deficiency is being resolved.  Reference AQAP-2070.  

        3.1.4.  The contract/delegation shall be reviewed to determine if any of the exceptions listed below preclude delegating the functions to the Host Nation:

• Special requirements, e.g., NASA, Level 1Subsafe, special skills
• Access prohibitions
• Time constraints or period of performance limitations
• Unresolved problems warranting non-delegation

    3.2.  Risk Assessment

        3.2.1.  A risk assessment shall be used to identify the system, process, and/or product risks (or any combination thereof) requiring monitoring through GQA surveillance.  Delegations to the Host Nation shall include the risk information and specific GQA support activity. Reference AQAP-2070 and DCMA Supplier Risk Management instructions.    

    3.3.  Risk Handling

        3.3.1.  DCMA International  CMOs should work closely with their Host Nation counterparts in establishing a working relationship. This relationship shall provide a vehicle to exchange information/data for evaluating risks, for making future delegation decisions, and for reinforcing confidence in the cooperative contract management program.  Reference AQAP-2070 for information concerning risk feedback.

    3.4.  Risk Monitoring

        3.4.1.  In order to avoid duplication of effort, the DCMA personnel shall not perform CM functions that have been delegated to the Host Nation.  Functions not delegated should  be accomplished by the DCMA International personnel in accordance with the applicable agency instruction or guidance.

        3.4.2  Requests for GQA or other Host Nation support, shall be forwarded in the format prescribed by AQAP-2070 and the applicable agreement, respectively.  CM functions outside the scope of the governing international agreement shall not be delegated to the Host Nation. The delegation shall be tailored to risks associated with contract requirements, but the following should be considered for inclusion on the Delegation:

• Method of reimbursement (if fee-for-service)
• Risks requiring GQA Surveillance
• Special requirements 
• Reports, methods of communications, meetings, etc., as required by the buying command or CMO (reporting should be kept to a minimum and existing reports should be used to the greatest extent possible in order to reduce the number of reports requested from the Host Nations)  
• Instructions and procedures for processing DD Form 250 (Canada) and/or processing a certificate of conformance 
• Points of contact information (including email addresses)
• Arrangements for planning facility visits
• Instructions and procedures for closing out the delegation when complete
• Product quality deficiency reporting and investigations
• Deviation permit and concession authority

        3.4.3.  The Host Nation performs the delegated CM function in accordance with their national practices and the agreement.  When appropriate, joint CMO/Host Nation visits to supplier facilities should be considered to improve the visibility of risks and to foster communication between the organizations.

    3.5.  Risk Documentation

        3.5.1.  The Host Nation maintains records of surveillance and evidence of delegation completion in accordance with their National Practices or as prescribed by applicable agreements.  DCMA executes the DD Form 250 upon completion of the requested GQA by the Host Nation and initiates contract closeout.

        3.5.2.  It is DoD policy to comply with the terms of international agreements. Timely resolution of issues should be handled at the lowest possible level consistent with the severity and complexity of the issue and escalated, as necessary, through the chain of command.  DCMA International and DCMA-OCT shall be informed, in a timely manner, of issues dealing with noncompliance, by either party, with the provisions of the agreements or the NATO STANAG.  The CMO Commander should informally notify the U.S. Ambassador or Attaché of any situation which appears to be headed for communication between DoD and the Host Nation.  Likewise, DCMA will notify OUSD.  

        3.5.3.  Where an agreement exist for the exchange of CM functions, DCMA International CMO Commanders should establish procedures to periodically review decisions made by assigned personnel not to delegate to the Host Nation.