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How to Clear the Path Through How to Clear the Path Through

ITARSITARS

And Better Prepare to Bid And Better Prepare to Bid for US Government Contracts for US Government Contracts

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IntroductionIntroduction

1.1. What Is “ITAR”?What Is “ITAR”?

2.2. Who Must Comply With ITARs?Who Must Comply With ITARs?

3.3. The Potential Market The Potential Market

4.4. Market “Longevity” Market “Longevity” (defense vs. commercial)(defense vs. commercial)

5.5. Step By Step Preparation Guideline Step By Step Preparation Guideline

6.6. Types of Government Assistance AvailableTypes of Government Assistance Available• FederalFederal• ProvincialProvincial

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1: What is ITAR1: What is ITARIInternational nternational TTraffic in raffic in AArms rms RRegulationsegulations

(ITARs)(ITARs)

The purpose/objective of ITARs is to insure that The purpose/objective of ITARs is to insure that armament designs, hardware and associated armament designs, hardware and associated software do not get into undesirable (as defined by software do not get into undesirable (as defined by the US) hands.the US) hands.

ITARs cover every aspect of who sees or does design ITARs cover every aspect of who sees or does design & manufacture of arms and various types of & manufacture of arms and various types of armament delivery systems.armament delivery systems.

Manufacturers designers, trainers and testers must Manufacturers designers, trainers and testers must comply with ITARs to become eligible to supply comply with ITARs to become eligible to supply components or assembled components to U.S. components or assembled components to U.S. defense contractors.defense contractors.

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2: Who Must Comply with ITARs?2: Who Must Comply with ITARs? Designers and/or manufacturers and/or assemblers of Designers and/or manufacturers and/or assemblers of

components and assemblies which are, or could be used in components and assemblies which are, or could be used in armaments, or armament guidance &/or delivery systems.armaments, or armament guidance &/or delivery systems.

The ownership and employees of such companies must be The ownership and employees of such companies must be ITAR – compliant, i.e. composed of companies and citizens ITAR – compliant, i.e. composed of companies and citizens of ITAR- approved countries. Dual citizenships must be of ITAR- approved countries. Dual citizenships must be vetted. vetted.

Companies supplying components that fall under ITARs to Companies supplying components that fall under ITARs to a non-approved country, or a non-approved chain of a non-approved country, or a non-approved chain of ownership are ineligible. ownership are ineligible.

Companies supplying products that are non-military in Companies supplying products that are non-military in nature, even though used aboard military guidance and nature, even though used aboard military guidance and delivery systems ex. Food containers, napkins, shoes, need delivery systems ex. Food containers, napkins, shoes, need not comply.not comply.

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3: The Potential Market 3: The Potential Market

Planned Canadian Military expenditures Planned Canadian Military expenditures (which will generate offsets) as of June (which will generate offsets) as of June 2006:2006:

• $2-3 billion – heavy lift long range transport $2-3 billion – heavy lift long range transport planesplanes

• $3-4.5 billion – Hercules replacement aircraft$3-4.5 billion – Hercules replacement aircraft• $3-4 billion – Heavy lift helicopters$3-4 billion – Heavy lift helicopters

Offsets on Canadian military purchases Offsets on Canadian military purchases from US suppliers are recently dollar for from US suppliers are recently dollar for dollar. dollar.

Offset contracts do not always have to be Offset contracts do not always have to be for parts for the program generating the for parts for the program generating the offset work.offset work.

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4: Market “Longevity” 4: Market “Longevity” (defense vs. commercial)(defense vs. commercial)

Defence contracts offer a balance to commercialDefence contracts offer a balance to commercial

cycles – which they do not follow - because they are cycles – which they do not follow - because they are based on government’s needs & timetablebased on government’s needs & timetable

Defence contracts are nominally “life of the Defence contracts are nominally “life of the program”, 20 – 30 years, subject to certain program”, 20 – 30 years, subject to certain conditionsconditions

• Advantage goes to suppliers “in early” on new Advantage goes to suppliers “in early” on new programsprograms

• Presence on 1 program helps subsequent bidsPresence on 1 program helps subsequent bids

Defence contracts can be used to build relationships Defence contracts can be used to build relationships that can cross over to commercial applications. For that can cross over to commercial applications. For ex: Boeing; Bell Helicopter Textron; Sikorsky.ex: Boeing; Bell Helicopter Textron; Sikorsky.

Defence contracts can lead to commercial Defence contracts can lead to commercial opportunities for companies in non-traditional opportunities for companies in non-traditional marketsmarkets

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5: Step By Step Preparation Guideline 5: Step By Step Preparation Guideline

Step 1 Step 1 Register with CCRRegister with CCR The Central Contractors Registration ( CCR )The Central Contractors Registration ( CCR )

Central Contractor Registration (CCR) is the primary registrant database for Central Contractor Registration (CCR) is the primary registrant database for

the U.S. Federal Government. the U.S. Federal Government. • CCR collects, validates, stores, and disseminates data in support of agency CCR collects, validates, stores, and disseminates data in support of agency

acquisition missions, including Federal agency contract and assistance acquisition missions, including Federal agency contract and assistance awards.awards.

The Central Contractors Registration Handbook can be obtained at:The Central Contractors Registration Handbook can be obtained at:http://http://www.ccr.gov/pdfs/CCR_Handbook.docwww.ccr.gov/pdfs/CCR_Handbook.doc

The TPIN NumberThe TPIN Number• Your TPIN number is a confidential password into your CCR information.Your TPIN number is a confidential password into your CCR information.

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5: Step By Step Preparation Guideline 5: Step By Step Preparation Guideline

Step 2 Step 2 Get a DUNS NumberGet a DUNS Number What is a DUNS Number?What is a DUNS Number?

• The Data Universal Numbering System The Data Universal Numbering System • (D-U-N-S(D-U-N-S) number is a unique nine-character identification number ) number is a unique nine-character identification number

provided by the commercial company Dun & Bradstreet (D&B). You must provided by the commercial company Dun & Bradstreet (D&B). You must have a different 9-digit D-U-N-S Number for each physical location and have a different 9-digit D-U-N-S Number for each physical location and different address in your company as well as each legal division that may different address in your company as well as each legal division that may be co-located.be co-located.

How do I get a DUNS Number? How do I get a DUNS Number?

• D-U-N-S Numbers can be requested from D&B at D-U-N-S Numbers can be requested from D&B at http://http://fedgov.dnb.com/webformfedgov.dnb.com/webform. At the D&B site you may search to see . At the D&B site you may search to see if you already have a D-U-N-S Number or request a new one.if you already have a D-U-N-S Number or request a new one.

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5: Step By Step Preparation Guideline 5: Step By Step Preparation Guideline

Step 3 Step 3 Obtain an NCAGE NumberObtain an NCAGE Number

What is an NCAGE Number?What is an NCAGE Number?

Nato Commercial and Government Entity CodeNato Commercial and Government Entity Code

• Foreign registrants in CCR must have a NATO Commercial and Foreign registrants in CCR must have a NATO Commercial and Governmental Entity (NCAGE) Code assigned.Governmental Entity (NCAGE) Code assigned.

• Non-USA registrants must also obtain a North Atlantic Treaty Organization Non-USA registrants must also obtain a North Atlantic Treaty Organization (NATO) CAGE (NATO) CAGE

How do I get an NCAGE Number? How do I get an NCAGE Number?

• NCAGE numbers can be obtained through: NCAGE numbers can be obtained through: http://www.dlis.dla.mil/Forms/Form_AC135.asphttp://www.dlis.dla.mil/Forms/Form_AC135.asp

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6: Government Assistance Available6: Government Assistance Available(Federal)(Federal)

Canadian Commercial Corporation (CCC)Canadian Commercial Corporation (CCC)

• CCC actsCCC acts as the official contracting body between the United States and as the official contracting body between the United States and Canada regarding Canada regarding ALLALL defense contracts > $100K defense contracts > $100K

• CCC provides performance guarantees to International Buyers CCC provides performance guarantees to International Buyers

• Prior to working with CCC, a company must be able to Prior to working with CCC, a company must be able to demonstrate that they have: demonstrate that they have:

1.1. A business plan clearly indicating A business plan clearly indicating Managerial capabilityManagerial capability Technical capabilityTechnical capability Financial capabilityFinancial capability

2.2. Sold this product beforeSold this product before3.3. Exported it beforeExported it before4.4. Adequate finances to support the project Adequate finances to support the project 5.5. An RFPAn RFP

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6: Government Assistance Available6: Government Assistance Available(Federal)(Federal)

Export Development Canada (EDC)Export Development Canada (EDC) • Export InsuranceExport Insurance• Foreign Buyer Financing Foreign Buyer Financing • Working Capital SolutionsWorking Capital Solutions• Contract and Insurance Bonding SupportContract and Insurance Bonding Support

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6: Government Assistance : Provincial

MDEIE -MDEIE - http://www.mdeie.gouv.qc.ca/page/web/portail/enhttp://www.mdeie.gouv.qc.ca/page/web/portail/en//

Strategy :Strategy :Québec government to support the Québec Québec government to support the Québec aeronautical industry. 5 key initiatives:aeronautical industry. 5 key initiatives:

1.1. Support prime contractors and equipment manufacturersSupport prime contractors and equipment manufacturers

2.2. Support the development of Québec Support the development of Québec SMEsSMEs

3.3. Maintain a pool of qualified workersMaintain a pool of qualified workers

4.4. Support innovation and productivitySupport innovation and productivity

5.5. Strengthen the partnership with the federal governmentStrengthen the partnership with the federal government

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6: Government Assistance Available6: Government Assistance Available(Provincial)(Provincial)

MDEIEMDEIE• Assistance to Quebec Aerospace Industry Assistance to Quebec Aerospace Industry

• FinancingFinancing• TrainingTraining• Other resourcesOther resources

Emploi QuebecEmploi Quebec• Human Resource Development SupportHuman Resource Development Support

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Contact UsContact Us

Steve Woloz & AssociatesSteve Woloz & Associateswww.swaassoc.com

Steve WolozSteve Woloz 514.944.8241514.944.8241