DOE Finalizes Export Control Contract Clauses Without Controversial Notification Provisions

import-export-600On October 23, 2015, the Department of Energy (DOE) finalized a proposed rule adding contract clauses that list and “recognize” the various export control laws that might be applicable to DOE contracts.  The two operative clauses, FAR 952.225-71 and FAR 970.5225-1, as implemented in the final rule are noncontroversial.  In fact, they do not impose any obligations on contractors that did not already exist, as the export control rules listed all apply even absent the contract clauses.

This rule is remarkable not for what it includes, but instead for what it leaves out.  When the DOE issued the proposed rule over two years ago, it caused some controversy.  The proposed rule contained, among other things, a contractual requirement that contractors “notify the contracting officer in a timely manner, in writing, of . . . any export control requirements it has determined apply to contract performance, [and] that it has taken appropriate steps to comply with such requirements.”  This vague notification provision would effectively have made many export control violations also into violations of the DOE contract – a recipe for needless trouble at minimum, and potential False Claims Act violations at worst.

The final rule eliminates those notice provisions.  In the comments, the DOE recognized concerns regarding False Claims Act liability, even going so far as to assure contractors that under the final rule, they “will not assume new liabilities due to insertion of the Export Clauses in DOE contracts.”  DOE contractors everywhere can breathe a small sigh of relief.