Overview
This section prescribes the conditions and procedures under which a contracting officer may waive the Comptroller General’s right to examine the records of foreign contractors in negotiated contracts. It establishes a strict hierarchy favoring the inclusion of standard audit clauses and requires high-level justification for any deviations.
Key Rules
- Mandatory Inclusion: Contracting officers must include standard audit and records clauses (FAR 52.215-2 or 52.212-5) in negotiated contracts with foreign contractors whenever possible.
- Conditions for Waiver: To use alternate clauses that waive record examination, the contracting officer must first:
- Exhaust all reasonable efforts to include the basic clause.
- Perform a trade-off analysis considering alternate sources, cost, and delivery schedules.
- Obtain a formal Determination and Findings (D&F) executed by the head of the agency.
- Comptroller General Concurrence: Concurrence from the Comptroller General is required for the waiver unless the contractor is a foreign government/agency or if the laws of the foreign country prohibit record examination.
- D&F Requirements: The written justification must document the specific reasons for the contractor's refusal, the lack of viable domestic or other foreign alternatives, and why the waiver serves the best interest of the United States.
Practical Implications
- Waiving audit rights is an exceptional measure that involves significant administrative burden, requiring agency-head level approval and potentially high-level inter-agency coordination.
- This provision provides a vital "escape hatch" for the government to procure critical supplies or services from foreign entities that refuse to comply with U.S. transparency standards or are legally barred from doing so by their own governments.