Government Contracts Final DFARS Rule Addresses Acquisition of Magnets and Tungsten
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Thursday, June 6, 2019

Final DFARS Rule Addresses Acquisition of Magnets and Tungsten

By Government Contracts Editorial Staff

The Department of Defense has amended the Defense Federal Acquisition Regulation Supplement. The DFARS Case 2018-D054 interim rule (¶70,016.984) adds DFARS 225.7018, Restriction on acquisition of certain magnets and tungsten, and subsections DFARS 225.7018-1, Definitions, DFARS 225.7018-2, Restriction, DFARS 225.7018-3, Exceptions, and DFARS 225.7018-4, Nonavailability determination. The rule also adds DFARS 225.7018-5, Contract clause, which prescribes a new clause at DFARS 252.225-7052. The clause must be included in solicitations and contracts, including those for commercial items, that exceed the simplified acquisition threshold. The rule implements section 871 of the NDAA for FY 2019 (PL 115-232), which generally prohibits the acquisition of any covered material melted or produced in a covered country or any end item that contains a covered material manufactured in a covered country. DFARS 225.7018-1 and DFARS 252.225-7052 define a “covered country” as North Korea, China, Russia, and Iran. “Covered material” includes certain samarium-cobalt magnets, neodymium-iron-boron magnets, tungsten metal powder, and tungsten heavy alloy and components. These materials play an essential role in national defense. An exception to the prohibition exists where an authorized agency official has made a nonavailability determination, in accordance with DFARS 225.7018-4, that covered materials of satisfactory quality and quantity, in the required form, cannot be procured as and when needed at a reasonable price from a source other than a covered country. The rule supersedes Class Deviation 2019-O0006 (¶70,245.100).

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