FED GOV CON - Is The Gsa Schedule Right For Me?

Jennifer Schaus &
Associates
GOV CON WEBINAR SERIES - 2017
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC www.JenniferSchaus.com
Join Us for A Series of Complimentary Webinars

on various US Federal Government Contracting Topics.
Presenters are industry experts
sharing knowledge
about the competitive government contracting sector.
Find all of our Govt Contracting webinars (free download) at www.JenniferSchaus.com
Contact Us @ 2 0 2 – 3 6 5 – 0 5 9 8
ABOUT JENNIFER SCHAUS & ASSOCIATES:

- Based in downtown Washington, DC;
- A la carte services for Federal Contractors;
- Proposal Writing to GSA Schedules and Contract
Administration, etc.;
- Deep bench of industry experts;
- Educational webinars;
- Networking events and seminars;
WEBSITE: http://www.JenniferSchaus.com
ABOUT JENNIFER SCHAUS:

- Began career with D&B;
- Over 20 years in federal contracting;
- Industry speaker and author;
- Board Member: GovLish; NCMA; and NMIA.
- Volunteer Mentor &/or Instructor: VA PTAP; CBP / VBOC; Capitol Post; 1776; Eastern
Foundry, WIT; WDCEP and the Towson University Incubator.
ABOUT OUR SPEAKER:
THOMAS B. McVEY
ABOUT THOMAS B. McVEY:

- Over 30 Years in International Law;
- Georgetown University; Columbia University;
- Chair, International Practice Group, Williams Mullen;
- 1666 K Street, N.W., Washington, DC 20006
- tmcvey@williamsmullen.com; (202) 293-8118.
ITAR FOR GOVERNMENT CONTRACTORS –

WHAT YOU NEED TO KNOW TO RUN YOUR BUSINESS
Wednesday, September 20, 2017
DFARS §225.79 and 252.225-7048

• Government contractors required to comply with ITAR/EAR
• Must “flow down” this requirement to subcontractors
• Covers ITAR registration, licensing of defense articles, defense services,

technical data and other requirements
• Important for second– and third-tier suppliers

International Traffic In Arms

Regulations (ITAR)
• Enabling statute: Arms Export Control Act
• Regulations - International Traffic In Arms Regulations (“ITAR”) (22 C.F.R. Chapter 1, Subchapter M, parts
120-130)
• Department of State – Directorate of Defense Trade Controls
• List of Controlled Products - U.S. Munitions List
• Controls Military Items – Broad scope encompassing many items originally developed for military use
Defense Articles - U.S. Munitions List (USML)

• Category 13: Materials and miscellaneous
• Category 1: Firearms, weapons articles (cameras, encryption, camouflage,
• Category 2: Guns and armaments other)
• Category 3: Ammunition, ordinance • Category 14: Toxicological, chemical, biological
• Category 4: Launch vehicles, missiles, rockets agents, associated equipment
• Category 5: Explosives, incendiary agents • Category 15: Spacecraft and related articles
• Category 6: Naval vessels • Category 16: Nuclear weapons, technology
• Category 7: Military vehicles • Category 17: Classified articles, technical data
and services
• Category 8: Aircraft and equipment
• Category 9: Military training services, equipment • Category 18: Directed energy weapons
• Category 10: Personal protective equipment • Category 19: Gas turbine engines/ equipment
• Category 11: Military electronics • Category 20: Submersible vessels
• Category 12: Optical and guidance control equipment • Category 21: Articles not otherwise
enumerated
ITAR Also Controls Technical Data and Software

Technical Data:
Information which is required
for the design,
development, production,
manufacture, assembly,
operation, repair, testing,
maintenance or
modification of defense
articles, and other items.
( see 22 CFR §120.10)
Technical Data and Software (Cont’d)
Blueprints Models
Training Manuals Data

Methods For Exporting Technical Data and

Software
•Send or take it abroad (e.g., send
disk in the mail)
•Go abroad and talk about it
•Electronic transmissions, e-mail,

phone call, fax to foreign party
•Take it in your laptop or iPhone in

an overseas trip
•Foreign national comes to U.S. and

has access to it
Defense Services
• Furnishing of assistance to
foreign persons related to
Defense Articles; examples:
– Consulting
– Engineering
– Technical Services
– Military training
– Other services
– Furnishing technical data
• Requires Technical Assistance
Agreement (TAA)
Examples of USML Items

• Command, control and • Certain satellites and ground control
communications systems equipment, including parts,
technologies and software
• Certain drone aircraft
• Anti-gravity and pressure suits,
• Navigation systems for military vessels
atmosphere diving suits
• Certain electronic equipment used in
• Body armor (certain types)
military applications
• Naval vessels and related equipment,
• Military training services and
parts and software
equipment
• Protective personnel equipment
• Underwater sound equipment
• Certain ground sensor systems
• Flight control products, software and
technologies • Antennas for military systems
• Developmental equipment funded by • Military radar systems and equipment
DOD • Certain optical equipment
Items on USML ― Parts and Components

• Many parts, components,
accessories, attachments,
equipment and software
specially designed for a USML
item are also on USML
• Certain parts and components
have been transferred to the
Commerce Control List under
the Export Administration
Regulations pursuant to Export
Control Reform
• Major issue for second- and
third-tier suppliers and
subcontractors
Services on the USML

• Intelligence and security
services often covered under
ITAR
• Military advice to foreign
persons is covered under ITAR
(§120.9)
• Military training for foreign
persons (§120.9)
• Training in use of USML items
(subject to certain
exemptions)
Government Sponsored Research Funding

• SBIR, DOD university research funding and other defense research
funding
• Resulting products, technical data, software and services are often on
U.S. Munitions List
• Many “developmental products” funded by Department of Defense are
on the USML
Requirements If Item Is On USML

• Physical articles:
– Cannot export unless obtain
export license (e.g. DSP-5)
• Technical Data and
Software:
– Cannot send or take out of
U.S. without export license
– Cannot transfer to foreign
party in U.S. without export
license
Requirements If Item Is On USML (cont.)

• Services:
– Cannot perform defense
services for foreign persons
overseas or in the United
States without license (TAA)
• Imports:
– Items on USML and U.S.
Munitions Import List
subject to import
restrictions
Registration
• Parties that manufacture or export items on the USML or
perform defense services are required to register with DDTC
• This is even if the company does not export any products

DDTC Registrations
12000
10000
8000
6000
4000
2000
0
Exporters Manufacturers Total
Data Security Requirements for ITAR-

Controlled Technical Data
• DFARS 252.204-7012 – establishes data security requirements for
“Covered Defense Information,” including “export control” information
• Security standard: NIST SP 800-171
• December 31, 2017
• Cyber incident reporting requirement
• Mandatory “flow down” to subcontractors

Other ITAR Requirements

• Registration (22 C.F.R. Part 122)
• Broker Regulation (22 C.F.R. Part 129)
• Temporary Imports (22 C.F.R. Part 123)
• Reporting For Payment of Commissions, Fees and Political Contributions

(22 C.F.R. Part 130)
• Recordkeeping (22 C.F.R. § 122.5)
• Debarred Party Screening

Companies Most Likely Subject To ITAR Regulation

• Defense industry firms
• Government contractors
• Aerospace, avionics
• Electronics
• Maritime
• Navigation
• Unmanned aerial vehicles (UAV)
• Satellite
• Communications
• High performance materials
• Government sponsored research
• Manufacturers of parts, components, software for above
Penalties for Violations
• Criminal Sanctions – up to 20 years imprisonment

• Fines: Up to $1,000,000 per violation
• Press release
• Debarment
• For criminal cases Justice Department can prosecute:
– Company
– Officers and Directors
– Employees in their individual capacities
Recent Export Compliance Cases

• Timothy Gormley; 42 months imprisonment; export of microwave amplifiers without license
• LeAnne Lemeister (empowered official and export compliance officer), DDTC Administrative
Debarment; 21 violations regarding improper use of export control documents
• Meggitt-USA, Inc; $25,000,000 civil penalties; various ITAR violations
• Aeroflex Inc; $8,000,000 civil penalties; various ITAR violations
• Raytheon Company; $8,000,000 civil penalties; various ITAR violations
• Peter Gromacki; 3 months imprisonment; export of high-grade carbon fiber to China
• Ming Suan Zhang, 57 months imprisonment; high-grade carbon fiber to China

Compliance Strategy
• Classification – review your company’s products and services to see if
they are listed on:
– U.S. Munitions List
– Commerce Control List
– End Use Based Controls (15 CFR Part 744)
• Application – Apply as required for:

– DDTC export licenses (DSP-5, etc.)
– BIS export licenses
– TAA’s, MLA’s
– Warehouse Distribution Agreements
– Re-export authority
• Compliance Program – internal company compliance procedures

ITAR Compliance Program

• Designated company official in charge of compliance
• Classification of company’s products, software, technical data and services
• Written policies and procedures for dealing with ITAR and EAR issues
• Procedure for foreign nationals
• Training
• Recordkeeping
• Prohibited list checking and OFAC sanctions review
• Procedure for dealing with suspected violations
• Auditing
• Updating program
Export Administration Regulations

• Enabling Statute: Export Administration Act (expired),
International Emergency Economic Powers Act
• Regulations: Export Administration Regulations (EAR)
• Department of Commerce – Bureau of Industry and Security
• List of Controlled Products – Commerce Control List
• Controls “Dual-Use” Items and 600 Series Military Items
Jennifer Schaus & Associates
GOV CON WEBINAR SERIES - 2017
QUESTIONS?
CONTACT OUR SPEAKER THOMAS McVEY AT (202) 293-8118 AND AT tmcvey@williamsmullen.com
THANK YOU FOR ATTENDING!! WWW.JENNIFERSCHAUS.COM

FED GOV CON - Is The Gsa Schedule Right For Me?

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Jennifer Schaus &

Join Us for A Series of Complimentary Webinars

Find all of our Govt Contracting webinars (free download) at www.JenniferSchaus.com

ABOUT JENNIFER SCHAUS & ASSOCIATES:

ABOUT JENNIFER SCHAUS:

ABOUT OUR SPEAKER:

ABOUT THOMAS B. McVEY:

ITAR FOR GOVERNMENT CONTRACTORS –

DFARS §225.79 and 252.225-7048

• Must “flow down” this requirement to subcontractors

• Covers ITAR registration, licensing of defense articles, defense services,

• Important for second– and third-tier suppliers

International Traffic In Arms

• Department of State – Directorate of Defense Trade Controls

• List of Controlled Products - U.S. Munitions List

Defense Articles - U.S. Munitions List (USML)

ITAR Also Controls Technical Data and Software

Technical Data and Software (Cont’d)

Training Manuals Data

Methods For Exporting Technical Data and

•Go abroad and talk about it

•Electronic transmissions, e-mail,

•Take it in your laptop or iPhone in

•Foreign national comes to U.S. and

Examples of USML Items

Items on USML ― Parts and Components

Services on the USML

Government Sponsored Research Funding

Requirements If Item Is On USML

Requirements If Item Is On USML (cont.)

• This is even if the company does not export any products

Data Security Requirements for ITAR-

• Security standard: NIST SP 800-171

• December 31, 2017

• Cyber incident reporting requirement

• Mandatory “flow down” to subcontractors

Other ITAR Requirements

• Broker Regulation (22 C.F.R. Part 129)

• Temporary Imports (22 C.F.R. Part 123)

• Reporting For Payment of Commissions, Fees and Political Contributions

• Recordkeeping (22 C.F.R. § 122.5)

• Debarred Party Screening

Companies Most Likely Subject To ITAR Regulation

Penalties for Violations

• Criminal Sanctions – up to 20 years imprisonment

Recent Export Compliance Cases

• Meggitt-USA, Inc; $25,000,000 civil penalties; various ITAR violations

• Aeroflex Inc; $8,000,000 civil penalties; various ITAR violations

• Raytheon Company; $8,000,000 civil penalties; various ITAR violations

• Peter Gromacki; 3 months imprisonment; export of high-grade carbon fiber to China

• Ming Suan Zhang, 57 months imprisonment; high-grade carbon fiber to China

• Application – Apply as required for:

• Compliance Program – internal company compliance procedures

ITAR Compliance Program

Export Administration Regulations

THANK YOU FOR ATTENDING!! WWW.JENNIFERSCHAUS.COM

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