252.229-7004 Status of Contractor as a

Direct Contractor (Spain).

As prescribed in 229.402-70 (d), use the following clause:

STATUS OF CONTRACTOR AS A DIRECT CONTRACTOR (SPAIN) (JUN 1997)

(a) “Direct Contractor,” as used in this clause, means an individual, company, or entity with whom

an agency of the United States Department of Defense has executed a written agreement that allows

duty-free import of equipment, materials, and supplies into Spain for the construction, development,

maintenance, and operation of Spanish-American installations and facilities.

(b) The Contractor is hereby designated as a Direct Contractor under the provisions of

Complementary Agreement 5, articles 11, 14, 15, 17, and 18 of the Agreement on Friendship,

Defense and Cooperation between the United States Government and the Kingdom of Spain, dated

July 2, 1982. The Agreement relates to contracts to be performed in whole or part in Spain, the

provisions of which are hereby incorporated into and made a part of this contract by reference.

(c) The Contractor shall apply to the appropriate Spanish authorities for approval of status as a

Direct Contractor in order to complete duty-free import of non-Spanish equipment, materials, and

supplies represented as necessary for contract performance by the Contracting Officer. Orders for

equipment, materials, and supplies placed prior to official notification of such approval shall be at

the Contractor’s own risk. The Contractor must submit its documentation in sufficient time to permit

processing by the appropriate United States and Spanish Government agencies prior to the arrival of

the equipment, materials, or supplies in Spain. Seasonal variations in processing times are common,

and the Contractor should program its projects accordingly. Any delay or expense arising directly or

indirectly from this process shall not excuse untimely performance (except as expressly allowed in

other provisions of this contract), constitute a direct or constructive change, or otherwise provide a

basis for additional compensation or adjustment of any kind.

(d) To ensure that all duty-free imports are properly accounted for, exported, or disposed of, in

accordance with Spanish law, the Contractor shall obtain a written bank letter of guaranty payable

to the Treasurer of the United States, or such other authority as may be designated by the

Contracting Officer, in the amount set forth in paragraph (g) of this clause, prior to effecting any

duty-free imports for the performance of this contract.

(e) If the Contractor fails to obtain the required guaranty, the Contractor agrees that the

Contracting Officer may withhold a portion of the contract payments in order to establish a fund in

the amount set forth in paragraph (g) of this clause. The fund shall be used for the payment of

import taxes in the event that the Contractor fails to properly account for, export, or dispose of

equipment, materials, or supplies imported on a duty-free basis.

(f) The amount of the bank letter of guaranty or size of the fund required under paragraph (d) or (e)

of this clause normally shall be 5 percent of the contract value. However, if the Contractor

demonstrates to the Contracting Officer’s satisfaction that the amount retained by the United States

Government or guaranteed by the bank is excessive, the amount shall be reduced to an amount

commensurate with contingent import tax and duty-free liability. This bank guaranty or fund shall

not be released to the Contractor until the Spanish General Directorate of Customs verifies the

accounting, export, or disposition of the equipment, material, or supplies imported on a duty-free
basis.

(g) The amount required under paragraph (d), (e), or (f) of this clause is (Contracting Officer insert

amount at time of contract award) .

(h) The Contractor agrees to insert the provisions of this clause, including this paragraph (h), in all

subcontracts.

(End of clause)

Parent topic: 252.229 RESERVED