In our previous blog, we talked about the significant opportunity the U.S. Department of Defense (DoD) represents for Canadian exporters regardless of their field of business. So how do you go about seizing that opportunity? The first step is to get up to speed on some of the basic mechanisms of the Canada-U.S. Defense Production Sharing Agreement (DPSA).
The DPSA views Canadian companies as vital to North America’s industrial base and puts their bids on equal footing with those of U.S. firms. While it opens the door for the U.S. DoD to buy from Canadian companies, the actual laws and regulations that govern purchases are detailed in a different document called the Defense Federal Acquisition Regulation Supplement (DFARS).
A few parts of DFARS are especially relevant for Canadian firms:
- DFARS 225.872 — which waives limitations of the Buy American Act
- DFARS 252.225-7013 — which allows Canadian goods to be shipped to the U.S. duty-free
- DFARS 225.870-8 — which recognizes Public Services and Procurement Canada site and employee security clearances as valid
- DFARS 225.801-1 — which identifies CCC as Prime Contractor for all contracts over USD $250,000
Together, these four clauses protect your exports from the ebb and flow of protectionism in U.S. trade policy and provide preferential access to the U.S. market. And because Canadian companies that export to the U.S. DoD don’t generally need an export permit from the Government of Canada, deals can move quickly.
Who do you want to sell to?
While defence procurement in the U.S. is managed by the DoD, each individual armed service has its own procurement office and executes its own procurements. In other words, there are offices for the Army, Navy, Air Force, Marine Corps, Space Force, Coast Guard and other agencies and organizations. Some of the key offices are:
- The Office of the Assistant Secretary of the Navy for Research, Development and Acquisition (includes the U.S. Marine Corps)
- The Office of the Assistant Secretary of the Army for Acquisition, Logistics and Technology
- The Office of the Assistant Secretary of the Air Force
- United States Coast Guard Acquisition Directorate
Each of these offices in turn operates a range of sub-organizations that specialize in different fields of procurement such as research and development, infrastructure, commercial products and support services. So it’s a good idea to investigate the needs of the various individual branches and see if there’s a sweet spot for what you have to offer.
One centralized agency to get familiar with is the Defense Logistics Agency, which is responsible for furnishing many non-military supplies and services including food, fuel, medical supplies and spare parts.
Help is at hand
If it seems daunting to have to acquaint yourself with the buying needs of 22 different procurement organizations, don’t worry: you don’t have to go it alone. As the prime contractor specifically named within DFARS, CCC can help you get oriented to surface the opportunities most relevant to your business.
In our next and final post in this series, we’ll walk through the five steps every exporter must follow before preparing a bid for the U.S. DoD.