PGI 240.7003-3: Waiver of prohibitions.

(a) General. (1) The requiring activity or other official will provide the contracting officer with a copy of any waiver determination under this section.

(2) Include a copy of the waiver determination in the contract file.

(b) Covered products or services prohibition. The prohibition at DFARS 240.7003-2 (a) may be waived, on a case-by-case basis, if an authorized official determines that a waiver is necessary for national security purposes.

(i) The following officials are authorized, without power of delegation, to make the determination specified in paragraph (2) of this section:

(A) The Under Secretary of Defense (Acquisition and Sustainment).

(B) The Secretaries of the military departments.

(C) The Component Acquisition Executive of the Defense Logistics Agency.

(ii) The official granting a waiver must submit a report to the congressional defense committees, with a copy to the Principal Director, Defense Pricing, Contracting, and Acquisition Policy, and to the Office of the Assistant Secretary of War for Industrial Base Policy not less than 15 days before issuing the waiver. In the report, the official must—

(A) Identify the specific reasons for the waiver; and

(B) Include recommendations as to what actions may be taken to develop alternative sourcing capabilities in the future.

(c) Entity prohibition. (i) The prohibition at DFARS 240.7003-2(b) may be waived on a case-by-case basis. Not less than 15 days before issuing the waiver, the waiver authority official must send a copy of the waiver determination to the Office of the Principal Director, DPCAP/CP via email at osd.pentagon.ousd-a-s.mbx.asda-dp-c-contractpolicy@mail.mil. In the report, the official granting a waiver must—

(A) Identify both the specific reasons for the waiver and the compelling justification for the additional time to implement the requirements of the prohibition; and

(B) Include a detailed phase-out plan to eliminate products or services produced or developed by a Chinese military company with recommendations as to what actions may be taken to develop alternative sourcing capabilities in the future.

(ii) A waiver granted may remain in effect until the date on which the authorized official determines that commercially viable providers exist outside of the People’s Republic of China that can and are willing to provide DoD with quality goods and services in the quantity demanded.

(iii) The following officials are authorized, without power of delegation, to make the waiver determination:

(A) The Under Secretary of Defense (Acquisition and Sustainment).

(B) The Service Acquisition Executive of the military departments.

(C) The Component Acquisition Executive responsible for all acquisition functions.

(d) Prohibition on contracting with entities that contract with lobbyists for Chinese military companies. DoD may waive the prohibition at DFARS 240.7003-2(d) upon notification to Congress.