NATO AACP-2 VOL 2

Abstract

<u>INTRODUCTION</u> <br>1. The Conference of National Armaments Directors (CNAD) invited the NATO Group on Acquisition Practices (AC/313) to develop guidelines which would assist contracting efforts in the framework of NATO co-operative programmes. <br>2. The attached guidelines, which cover both the Project Definition (PD) and Design and Development (DD) phases of co-operative programmes, have been established to respond to the task assigned by the Conference. They take account, as far as possible, of the views which have been expressed by industry, during a series of joint meetings between representatives of AC/313 and the NATO Industrial Advisory Group (NIAG). However, it must be recognized that the views of Industry are unlikely to be in complete accord with those of Governments and the resolution of differences will be a matter for negotiation on a case-by-case basis. <br>3. In some NATO co-operative programmes, one of the participating nations performs the contracting function on behalf of all participants. In such cases, that nation normally adheres to its national procurement laws and regulations. Although national practices may, in certain circumstances, be required to be waived to accommodate NATO requirements, mandatory national statutes and established national policy must be respected. Nevertheless, the majority of contract clauses are subject to discussion and acceptance between the buyer and seller taking into account the type of procurement, the type of contract being negotiated and the best interests of NATO and its member states. <br>4. Not all of the contractual provisions covered by these guidelines will necessarily apply to a particular programme. On the other hand, the circumstances of a programme may well require provisions additional to those addressed in this document. The provisions of these guidelines are basically applicable in the case of total funding by governments; in the case of partial funding adapted clauses may be drafted. The guidelines are built, to a certain extent, upon previous NATO documents and Allied Acquisition publications which are referred to herein. They contain for each contractual term, wherever practicable, both a note of the key features or principles and a sample clause. It is stressed that the sample clauses are not "standard clauses", but are intended to serve as basic material to assist those negotiating particular contracts in devising terms appropriate to the individual case. Negotiation on the terms appropriate to particular programmes will be necessary and is not intended to be excluded by the provision of the attached guidelines and sample clauses. <br>5. The nature of the work to be undertaken by the Contractor under each phase and the balance of risk between the Contractor and Governments will vary depending upon the circumstances of each programme. The indicated applicability (PD or DD) of each provision therefore needs to be interpreted in a flexible manner. Indeed, in some cases, certain provisions contained in the Guidelines for Feasibility Studies may be appropriate to a particular PD contract; and where options for productions equipment are included in a DD contract, it will be necessary for the related contractual provisions to be those appropriate to the production phase. The contractual provisions for a programme must also properly reflect and be consistent with the provisions of any inter-governmental MOU for the programme. These guidelines should not therefore be considered in isolation. <br>6. The treatment of Technical Information will be particularly important and care must be taken to ensure that participants secure adequate rights to meet their purchasing objectives (e.g. competition) for subsequent phases recognizing that the ownership and use of Technical Information is of particular concern to both Governments and Industry. Although the underlying principles for the treatment of Technical Information are likely to be applicable to contracts involving the development of software, contracts for software- intensive programmes may require special provisions; national Intellectual Property experts should be consulted in such cases. <br>7. The establishment of international industrial consortia may well become an important aspect not normally encountered in national contracting - with the need for appropriate financial and performance guarantees. It is likely that greater sophistication may be called for in the pricing arrangements and other incentives with each successive phase of a programme. A clearly defined contracting strategy may well need to be established during MOU negotiation to ensure the timely placing of taut contracts.