ZEISS is required by federal acquisition regulations/law (the “FAR”) to accept all DPAS rated orders that it receives, unless it cannot meet the requirements of the order.

DPAS (Defense Priority & Allocations Rating System) is a federal program designed to prioritize the production and delivery of goods and services critical to National Defense. Under this system, certain government contracts receive a rated order status - either DX or DO.

DX and DO rated orders must be prioritized over all other orders, including unrated government orders and commercial (non-government) orders.  

Acceptance of these orders is required, unless there is a legitimate reason for rejection.

ZEISS is only required to confirm availability and delivery dates after receiving the actual order – not at the solicitation/offer stage (SAOs).  However, engaging in this stage will help clarify and predict future requests and expectations. 

As a seller, understanding DPAS is crucial because ZEISS is legally obligated to comply with these priorities. Failing to do so can result in severe penalties. 

Therefore, it's essential for everyone to recognize when a contract is rated and how to manage our resources accordingly.

An Overview of the DPAS Rating System

• DX Rated Orders (e.g., DX-A1)
  • Most urgent government needs
  • Only the President or the Secretary of Defense can authorize these types of orders
  • MUST be prioritized over all DO-rated, unrated, and commercial (non-government) orders
  • Acceptance Required
    • Unless a legitimate reason for rejection applies
    • Acceptance must be acknowledged within 10 working days of receipt of order
    • Once accepted, must be prioritized in production and delivery schedules over all other orders
    • May require adjustment of existing schedules and resource allocations
  • Rejection
    • May reject only if you cannot meet the requirements of the order (e.g., you cannot meet the delivery date, lack production capacity, etc.)
    • Rejections must be communicated within 10 working days, and must provide a reason for the rejection

• DO Rated Orders (e.g., DO-C1)
  • Most common government rating
  • All DO-rated orders are considered equal and do not take priority over one another
  • Must be prioritized over all unrated and commercial (non-government) orders
  • Acceptance Required
    • Unless a legitimate reason for rejection applies
    • Acceptance must be acknowledged within 15 working days of receipt of order
    • Once accepted, must be prioritized in production and delivery schedules over all unrated and commercial orders
    • May require adjustment of existing schedules and resource allocations
  • Rejection
    • May reject only if you cannot meet the requirements of the order (e.g., you cannot meet the delivery date, lack production capacity, etc.)
    • Rejections must be communicated within 15 working days, and must provide a reason for the rejection

• Unrated Government Orders
  • Not subject to prioritization under DPAS
  • Treated like all commercial (non-government) orders
  • Must be delayed or rescheduled if there are DX or DO rated orders to fulfill

• Commercial (Non-Government) Orders
  • Orders place by the private sector
  • Not subject to prioritization under DPAS
  • Must be delayed or rescheduled if there are DX or DO rated orders to fulfill

Practical Steps for Assessing DPAS Rated Orders

1. Review and Understand the Rating
2. Acknowledge Receipt of the Order
3. Assess Production Capacity (verify internally)
4. Determine & Communicate Acceptance or Rejection of the Order (within the required timeframe)
5. Adjust Schedules & Timelines
6. Notify Subcontractors
7. Document Everything!

The Bottom Line:

DX and DO rated orders are government-mandated priorities.

Understanding how to manage these orders will ensure compliance with regulations, prevent legal issues, and help maintain a healthy relationship with our government and government-contracted customers.

Therefore,

1. Understand the Implications
2. Be Prepared
3. Perform with Strict Adherence to the Contract

DPAS ratings can generally be found here (please see yellow below):

Please reach out to a member of the Legal team with any questions.

Best regards / Mit freundlichen Grüßen,

Nicole Vollmer

__________

Nicole D. Vollmer

Corporate Counsel

Compliance & Legal Affairs

ZEISS Business Services (ZBS)

Carl Zeiss, Inc.

6250 Sycamore Ln N

Maple Grove, MN 55369, USA

Mobile: +1 612-666-7700

Phone: +1 914-681-7881

nicole.vollmer@zeiss.com

www.zeiss.com