FAR 29.402-3—Tax on certain foreign procurements.
Plain-English Summary
FAR 29.402-3 tells contracting officers when to include the solicitation provision at 52.229-11, Tax on Certain Foreign Procurements—Notice and Representation, and when to include the contract clause at 52.229-12, Tax on Certain Foreign Procurements. The section is aimed at identifying whether a contractor is a foreign person so the Government can address potential tax consequences tied to certain foreign procurements. It applies broadly to solicitations, including commercial item and commercial service acquisitions using part 12 procedures, but it also lists specific exceptions where the notice-and-representation provision is not required. Those exceptions include simplified acquisitions below the simplified acquisition threshold, emergency acquisitions under part 18, unusual and compelling urgency acquisitions under 6.303-2, certain personal services contracts with a single individual, and certain foreign humanitarian assistance contracts identified by the requiring activity. In practice, this section matters because it determines when the Government must collect the contractor’s foreign-person status and when the resulting contract must carry the tax clause, which can affect pricing, compliance, and post-award administration.
Key Rules
Insert the notice provision
Contracting officers must insert 52.229-11 in solicitations unless one of the listed exceptions applies. This requirement includes solicitations using part 12 procedures for commercial products and commercial services.
Commercial acquisitions are covered
The rule expressly applies to commercial product and commercial service acquisitions, so using FAR part 12 does not by itself remove the requirement. The notice-and-representation provision is still required unless an exception applies.
Simplified acquisitions under threshold are exempt
Do not include 52.229-11 for acquisitions using simplified acquisition procedures that do not exceed the simplified acquisition threshold. The exception is tied to both the procedure used and the dollar threshold.
Emergency and urgent buys are exempt
The provision is not required for emergency acquisitions using part 18 flexibilities or for acquisitions made under the unusual and compelling urgency authority at 6.303-2. These exceptions recognize the need for speed in urgent situations.
Certain personal services are exempt
The notice provision is not required for contracts with a single individual for personal services if the contract will not exceed the simplified acquisition threshold on an annual calendar year basis for all years of the contract. The annual calendar year test is important and must be applied across the full contract period.
Certain humanitarian assistance is exempt
If the requiring activity identifies the requirement as certain foreign humanitarian assistance, the provision is not required. The rule lists specific statutory authorities covering humanitarian and related foreign assistance programs.
Insert the tax clause when triggered
Contracting officers must insert 52.229-12 in solicitations that include 52.229-11 and in resultant contracts when the contractor indicated it was a foreign person in the 52.229-11 representation. The clause follows the representation and carries the operative contract requirement.
Responsibilities
Contracting Officer
Determine whether any exception applies before issuing the solicitation. Insert 52.229-11 in covered solicitations, including part 12 commercial solicitations, and insert 52.229-12 in solicitations that include the notice provision and in contracts awarded to offerors who represented that they are foreign persons.
Requiring Activity
Identify when a requirement qualifies as certain foreign humanitarian assistance so the contracting officer can apply the exception. Provide accurate acquisition and program information that supports the correct clause/provision decision.
Contractor / Offeror
Review the solicitation provision and make the required representation about foreign-person status in 52.229-11. If awarded a contract after indicating foreign-person status, comply with the resulting 52.229-12 clause.
Agency Acquisition Personnel
Ensure acquisition planning and solicitation review processes account for the foreign procurement tax rules and the listed exceptions. Support consistent application across commercial and noncommercial buys.
Practical Implications
This section is a clause-coverage rule, so the main day-to-day task is deciding whether the solicitation must carry 52.229-11 and whether the award must carry 52.229-12.
A common pitfall is assuming commercial-item procedures automatically exempt the acquisition; they do not. The exceptions must be checked separately.
Another frequent error is misapplying the simplified acquisition exception by looking only at procedure type and not confirming the acquisition stays at or below the simplified acquisition threshold.
For urgent or humanitarian buys, the file should clearly document which exception applies and why, because the omission of the provision/clause depends on that determination.
Contractors should pay close attention to the foreign-person representation, since it can trigger the contract clause and related tax compliance obligations after award.
Official Regulatory Text
(a) Insert the provision at 52.229-11 , Tax on Certain Foreign Procurements—Notice and Representation, in solicitations, including solicitations using part 12 procedures for the acquisition of commercial products and commercial services, unless one of the following exceptions applies: (1) Acquisitions using simplified acquisition procedures that do not exceed the simplified acquisition threshold (as defined in 2.101 ). (2) Emergency acquisitions using the emergency acquisition flexibilities defined in part 18 . (3) Acquisitions using the unusual and compelling urgency authority per 6.303-2 . (4) Contracts with a single individual for personal services that will not exceed the simplified acquisition threshold on an annual calendar year basis for all years of the contract. (5) Acquisitions if the requiring activity identifies that the requirement is for certain foreign humanitarian assistance contracts which are payments made by the U.S. Government agencies pursuant to a contract with a foreign contracting party to obtain goods or services described in or authorized under 7 U.S.C. 1691 , et seq., 22 U.S.C. 2151 , et seq., 22 U.S.C 2601 et seq., 22 U.S.C. 5801 et seq., 22 U.S.C. 5401 et seq., 10 U.S.C. 402 , 10 U.S.C. 404 , 10 U.S.C. 407 , 10 U.S.C. 2557 , and 10 U.S.C. 2561 . (b) Insert the clause at 52.229-12 , Tax on Certain Foreign Procurements, in— (1) Solicitations that contain the provision at 52.229-11 , Tax on Certain Foreign Procurements—Notice and Representation; and (2) Resultant contracts in which the contractor has indicated that it was a foreign person in solicitation provision 52.229-11 , Tax on Certain Foreign Procurements—Notice and Representation.