NATO AACP-2 VOL 2

AVAILABLE ELECTRONIC ONLY

INTRODUCTION

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.

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.

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.

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.

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.

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.

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.