Overview
This section outlines the authority and procedures for contracting officers to specify the currency required for offers in overseas contracts and establishes standardized exchange rate protocols for evaluating competing offers.
Key Rules
- Currency Determination: For contracts performed outside the U.S., contracting officers (COs) must specify whether offers are to be submitted in U.S. dollars or a specific foreign currency, unless dictated by international agreements or the WTO GPA.
- Evaluation Consistency: To ensure fairness, solicitations should typically require all offers to be in the same currency; if multiple currencies are permitted, the CO must convert them to U.S. dollars for evaluation.
- Conversion Timing: The market exchange rate used for evaluation is determined by the specific procurement method:
- Sealed Bidding: The rate in effect on the date of bid opening.
- Negotiations (Initial Offer Award): The rate in effect on the date specified for receipt of offers.
- Negotiations (Final Proposals): The rate in effect on the date specified for receipt of final proposal revisions.
- Fiscal Compliance: Agencies must maintain adequate funding buffers to account for currency fluctuations to prevent violating the Anti-Deficiency Act.
Practical Implications
- Risk Management: When a contract is priced in foreign currency, the U.S. Government assumes the exchange rate risk, requiring proactive financial management to ensure contract obligations do not exceed available appropriations.
- Protest Prevention: Contracting officers must strictly adhere to the specified conversion dates and use a "commonly used source" for exchange rates to ensure the price evaluation process is transparent and defensible against protests.