United States Department of War (U.S. DoW) procurement is governed by a hierarchy of laws and regulations that are designed to control how the U.S. DoW budget is spent, how suppliers are chosen, and how national security interests are protected. At the foundation are Acts of Congress, which establish the legal framework, restrictions, priorities, and mandates. Those Acts are translated into actionable procurement policies, contract clauses and standardized procedures collectively called Federal Acquisition Regulations (FARs) and Defense Federal Acquisition Regulations (DFARS). This page outlines some of the Acts, FARS and DFARS that shape U.S. DoW procurement and the access to the U.S. DoW market by Canadian businesses.
Note: This list is for informational purposes only. Businesses looking for specific advice should consult with a legal specialist.
Specific DFARS that impact Canadian businesses
Because the U.S DoW has unique national security responsibilities, it supplements FARs with its own regulations which are called Defense Federal Acquisition Regulation Supplements (DFARS).
- DFARS 225.870 Contracting with Canadian contractors
- DFARS 225.870-1a – Contracts endorsed by and awarded to CCC have a guarantee of performance by the Government of Canada
- DFARS 225.870-4(a) – Purchases from Canadian suppliers shall be made through CCC
- DFARS 215.403-l ({c)()(4 )(C) – Waiver of requirements for submission of cost or pricing data when contracting through CCC.
- DFARS 225.872-1 – Waiver of Buy America Act for Canadian materials and supplies used in defense equipment.
- DFARS 252.225-7013 – Most Canadian products imported into the U.S. for defense are exempt from U.S. customs duties.
Some other U.S. government documentation of note including:
- 50 USC 4552 (7) “Domestic source” means a business concern that
performs in the United States or Canada, the United Kingdom or Australia. - GAO/NSIAD-94-74 – Since its reactivation in 1985, U.S. DoW’s DPA Title III has considered Canada to be a “domestic source” as a matter of policy
What does this mean? The DFARS specify that Canadian companies are to be treated as domestic sources of supply, thereby giving their proposals equal consideration as U.S. firms.
These DFARS also state that Canadian goods sold to the U.S. DoW are exempt from Buy America restrictions and U.S. custom duties. Finally, contracts to the U.S. DoW through the CCC do not have to submit cost or pricing data that conforms with U.S. accounting standards.
Acts, FARs and DFARS that impact U.S. DoW procurement
| Act / Statute | Purpose | Primary FAR Implementation | DFARS Implementation |
|---|---|---|---|
| Competition in Contracting Act (CICA) | Requires that, unless an exception applies, federal procurement be conducted under “full and open competition” | FAR Part 6 (competition) | DFARS 206 |
| Federal Acquisition Streamlining Act (FASA) | Streamline federal procurement by promoting use of commercial products/services, expands simplified acquisition procedure for lower-value buys and outlines contracting procedures, contract types for commercial-item purchases. Canadian businesses must comply. | FAR Parts 12, 13, 14, 15, 16, 32 | DFARS 212, 213, 214, 215, 216 |
| Federal Acquisition Reform Act (FARA) | Modernizes and simplifies government contracting procedures and reduces overly burdensome acquisition rules. Canadian businesses must comply. | FAR Parts 1, 2, 7, 15 | DFARS 201, 207, 215 |
| Services Acquisition Reform Act (SARA) | Focuses on improving how government buys services to focus on promoting performance-based contracting and streamlining service-contract procurement. Canadian businesses must comply. | FAR Part 37 (service contracting) | DFARS 237 |
| Contract Disputes Act | Establishes legal and procedural framework for resolving claims and disputes between contractors and the U.S. government. Canadian businesses must comply. | FAR Part 33 | DFARS 233 |
| Procurement Integrity Act | Prohibits improper disclosure or use of bid/proposals and source-selection information by government personnel and imposes ethical/post-employment restrictions to prevent unfair advantage or conflicts of interest. Canadian businesses must comply. | FAR 3.1, 3.104, 15.207 | DFARS 203.1, 203.104 |
| Anti-Kickback Act | Criminalizes bribes, kickbacks or improper gratuities from subcontractors, suppliers to prime contractors or their employees. Canadian businesses must comply. | FAR 3.5 | DFARS 203.5 |
| Act / Statute | Purpose | FAR Implementation | DFARS Implementation |
|---|---|---|---|
| Buy American Act (BAA) | Requires U.S. federal agencies to prefer domestically manufactured goods in their purchases, with certain exceptions. Canadian businesses are exempt for contracts to the U.S. DoD. | FAR 25.1, 25.2 | DFARS 225.101, 225.701; Clause 252.225-7001 |
| Berry Amendment (10 USC 4862) | Mandates that the U.S. DoW purchase specific items, like food, clothing, textile, and hand tools from U.S. sources. No exceptions for Canadian businesses. | Not implemented in FAR (U.S. DoD-unique) | DFARS 225.7002; Clauses 252.225-7012, 7015 |
| Specialty Metals (10 USC 4863) | Requires U.S. DoW to procure items containing certain metals are melted or produced in the U.S. | Not in FAR | DFARS 225.7003; Clause 252.225-7008 / 7009 |
| Trade Agreements Act (TAA) | Allows procurement of goods only from countries with approved trade agreements once purchase thresholds are exceeded, effectively waving BAA requirements above those thresholds. | FAR 25.4; Clauses 52.225-5 | DFARS 225.4 |
| Balance of Payments Program | Gives preference to U.S-made products in certain U.S. DoW contracts outside the U.S. to help correct U.S. balance-of-payments deficits. | FAR 25.3 | DFARS 225.75; Clause 252.225-7001 |
| Act / Statute | Summary | FAR Implementation | DFARS Implementation |
|---|---|---|---|
| Defense Production Act (DPA) | Authorizes the government to prioritize contracts and expand industrial capacity for national defense. | FAR 11.3, 18.2 | DFARS 211.3, 218 |
| Defense Priorities & Allocations System (DPAS) | Used to prioritize national defense-related contracts and orders throughout the U.S. supply chain | FAR 11.303 | DFARS 211.7000 |
| Weapon Systems Acquisition Reform Act (WSARA) | – | FAR 34.1, 34.2 | DFARS 234 |
| Clinger-Cohen Act (IT procurement) | Governs acquisition of information technology and Establishes performance-based management principles | FAR Part 39 | DFARS 239 |
| Annual National Defense Authorization Act (varies) | – | Various FAR Parts via rulemaking | DFARS parts updated annually via DFARS revisions |
| Act / Regime | Summary | FAR Implementation | DFARS Implementation |
|---|---|---|---|
| CMMC (Cybersecurity Maturity Model Certification) | Ensures defense contractors properly protect Controlled Unclassified Information | Pending in FAR | DFARS 7021 (DFARS interim rule) |
| FISMA (cybersecurity) | – | FAR 39.101, 7.103(r) | DFARS 239 |
| NIST SP 800-171 (CUI security) | Standards that advance innovation and strengthen technology | FAR 52.204-21 | DFARS 252.204-7012, 7019, 7020 |
| Technical Data Rights (10 USC 3771–3789) | – | FAR 27 | DFARS 227; Clauses 252.227-7013, 7014, 7015 |
| Act / Statute | Summary | FAR Implementation | DFARS Implementation |
|---|---|---|---|
| Truth in Negotiations Act / Truthful Cost or Pricing Data Act | – | FAR 15.403 | DFARS 215.403 |
| Cost Accounting Standards (CAS) | – | FAR 30, 31 | DFARS 230, 231 |
| Anti-Deficiency Act | – | FAR 32.7 | DFARS 232 |
| Prompt Payment Act | – | FAR 32.9 | DFARS 232.9 |
| Act / Statute | Summary | FAR Implementation | DFARS Implementation |
|---|---|---|---|
| False Claims Act | – | FAR Subpart 9.4, 52.203-13 | DFARS 203.100 |
| Foreign Corrupt Practices Act (FCPA) | – | FAR 52.203-13 / 52.203-14 | DFARS 203.10 |
| Anti-Lobbying Act | – | FAR Part 3, 52.203-11 | DFARS 203 |
| ITAR / AECA | – | FAR 25.73 (references) | DFARS 225.73 |
| EAR (Export Controls) | – | FAR 25.7 | DFARS 225.79 |