48 CFR § 52.225-8 - Duty-Free Entry.
As prescribed in 25.1101(e), insert the following clause:
(a) Definition. Customs territory of the United States means the States, the District of Columbia, and Puerto Rico.
(b) Except as otherwise approved by the Contracting Officer, the Contractor shall not include in the contract price any amount for duties on supplies specifically identified in the Schedule to be accorded duty-free entry.
(1) The Contractor shall notify the Contracting Officer in writing of any purchase of foreign supplies (including, without limitation, raw materials, components, and intermediate assemblies) in excess of $15,000 that are to be imported into the customs territory of the United States for delivery to the Government under this contract, either as end products or for incorporation into end products. The Contractor shall furnish the notice to the Contracting Officer at least 20 calendar days before the importation. The notice shall identify the -
(i) Foreign supplies;
(ii) Estimated amount of duty; and
(iii) Country of origin.
(2) The Contracting Officer will determine whether any of these supplies should be accorded duty-free entry and will notify the Contractor within 10 calendar days after receipt of the Contractor's notification.
(3) Except as otherwise approved by the Contracting Officer, the contract price shall be reduced by (or the allowable cost shall not include) the amount of duty that would be payable if the supplies were not entered duty-free.
(2) Segregation of these supplies to ensure use only on Government contracts containing duty-free entry provisions is not economical or feasible.
(e) The Contractor shall claim duty-free entry only for supplies to be delivered to the Government under this contract, either as end products or incorporated into end products, and shall pay duty on supplies, or any portion of them, other than scrap, salvage, or competitive sale authorized by the Contracting Officer, diverted to nongovernmental use.
(1) Delivery address of the Contractor (or contracting agency, if appropriate);
(2) Government prime contract number;
(3) Identification of carrier;
(4) Notation “UNITED STATES GOVERNMENT, ___ [agency], ___ Duty-free entry to be claimed pursuant to Item No(s) ___ [from Tariff Schedules] ___, Harmonized Tariff Schedules of the United States. Upon arrival of shipment at port of entry, District Director of Customs, please release shipment under 19 CFR part 142 and notify [cognizant contract administration office] for execution of Customs Forms 7501 and 7501-A and any required duty-free entry certificates.”;
(5) Gross weight in pounds (if freight is based on space tonnage, state cubic feet in addition to gross shipping weight); and
(6) Estimated value in United States dollars.
(h) The Contractor shall instruct the foreign supplier to -
(1) Consign the shipment as specified in paragraph (g) of this clause;
(3) Include with the shipment at least two copies of the bill of lading (or other shipping document) for use by the District Director of Customs at the port of entry.
(i) The Contractor shall provide written notice to the cognizant contract administration office immediately after notification by the Contracting Officer that duty-free entry will be accorded foreign supplies or, for duty-free supplies identified in the Schedule, upon award by the Contractor to the overseas supplier. The notice shall identify the -
(1) Foreign supplies;
(2) Country of origin;
(3) Contract number; and
(4) Scheduled delivery date(s).
(j) The Contractor shall include the substance of this clause in any subcontract if -