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Commercial IT exception


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A question for the GSA experts: is commercial Information Technology subject to the purchase restrictions of the Trade Agreements Act? More specifically, can a commercial IT product made in China be placed on a GSA contract?

There is a statutory exception to the Buy American Act for commercial Information Technology. However, because they exceed the TAA threshold, GSA contracts are subject to the TAA. According to at least one PCLJ article, it is an open question whether the TAA applies to IT, since the TAA itself operates as an exception to the BAA. Briefly, commercial IT isn't covered by the BAA, so there is nothing for the TAA to except.

Here's the reasoning. The BAA says: give a preference to domestic goods by adding a price differential to all non-US goods. Commercial IT is an exception to the BAA, so the BAA does not even apply to the purchase of commercial IT.

Next, the TAA says: we will waive the preference when products from designated countries are offered. However, all non-US or non-designated country products are prohibited.

So the question: since commercial IT is not covered by the BAA at all, and the TAA is an exception to the BAA, (i.e. there is no preference to waive) does the TAA prohibition apply either?

With any luck, one of our GSA members knows whether commercial IT products made in China can or cannot be placed on a GSA contract.

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I hit my level of incompetance at Part 25. I have read it for years, taken a formal class, taken continuous learning modules, and asked coworkers. I still do not have the big picture on it and rely on my legal office to interpret the finer details.

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Yes, a commercial IT product can be placed onto GSA Advantage without it being TAA-compliant; however, these items need to be conditioned upon bundling as part of a larger TAA system. Good luck finding TAA-compliant keyboards, mice, or webcams, but you will see them all over GSA Advantage. The Vendor may sell those non-TAA compliant items as part of your TAA-compliant laptop, though. Kitting that non-TAA compliant mouse with your TAA-compliant laptop substantially transforms the nature of what you are purchasing (see FAR Section 25.003).

You will also find several unscrupulous Vendors convincing GSA contracting officers to add non-TAA items onto the contract by staying they are made in a TAA-compliant county. There have been a few cases where these companies get caught and end up paying the price under the False Claims Act, but that is the exception, unfortunately.

I would think you would have a case to purchase non-TAA items on GSA Advantage exceeding $25k if you did a small business set-aside for an item on the non-manufacturer rule list.

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  • 3 weeks later...

metteec,

"Yes, a commercial IT product can be placed onto GSA Advantage without it being TAA-compliant; however, these items need to be conditioned upon bundling as part of a larger TAA system. Good luck finding TAA-compliant keyboards, mice, or webcams, but you will see them all over GSA Advantage."

Schedule 70 contains FAR clause 52.225-5 TRADE AGREEMENTS. Para ( b ) of that clause states in part "...Unless otherwise specified these trade agreements apply to all items in the Schedule.." Are you asserting that the Schedule 70 Solicitation contains language that exempts TAA compliance for computer peripherals or other IT items if they are "bundled" with a "system" ??? Please show us where we can find this language as contractors would be very happy to "bundle" non-TAA compliant items with their "systems."

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Take a look at the definition of a "designated country end product" in the clause that you referred to. I included a sample of a non-TAA product available for purchase against the GSA FSS:

https://www.gsaadvantage.gov/advantage/catalog/product_detail.do?gsin=11000023612897

In order to purchase that product, the Government would need to purchase it as part of a larger configuration that underwent substantial transformation in a designated end-country.

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metteec,

Since the product is not available for separate sale, it cannot be purchased from schedule as it is not TAA compliant. That which can be bought (the "system" a you refer to it) IS TAA compliant (as it went through alleged substantial transformation). While this practice appears to be a potential loophole, I doubt one could bundle Non TAA compliant standard computer peripherals that are typically sold separately, bundle them in packages and claim substantial transformation by packaging them in the same bag. Again, I am not a products expert but simply using common sense.

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  • 3 months later...

To the OP - I've heard the argument whispered but never put to the test - or even attempted. The tide of practice seems heavily (100%) against it, both inside and outside GSA.

The OP's argument is simple logic:

  • GSA requires TAA compliant products
  • TAA is an exemption (subset, if you will) of BAA.
  • IT products are exempt from BAA

Therefore...Any IT product should be allowed on GSA regardless of origin.

Methinks the Government would say that they don't care about TAA's origin, they are extracting the TAA singularly and applying it.

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