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jb208

FAR 13 BPAs and Applicability of Trade Agreements

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Here's the situation:

I'm looking at awarding multiple FAR 13 Blanket Purchase Agreements for the repetitive purchases of commodities well below the micro-purchase threshold. The commodities being purchased all perform the same general function, but they come in different shapes, sizes, colors, and materials. We don't know what exact item we need until the actual need arises, preventing the consolidation of orders. No single purchase will exceed the micro-purchase threshold, and the total value of all purchases made under each BPA is reasonably expected to exceed $500,000.

How does the Buy American Act and the Trade Agreements Acts in FAR 25 apply to these BPAs? Seeing as BPAs are not contracts, and each call made against the BPAs will be below the micro-purchase threshold, one could argue the point that FAR 25 doesn't apply on the basis that each individual call is the contract. But then again, "bulk funding documents" may be used and the total value of all calls against each BPA will definitely exceed the applicable thresholds for BAA and TAA.

Clearly, the safest route is to assume the BAA and TAA apply to the BPAs. Due to marketplace conditions and manufacturing capabilities, it's anticipated that it will take a mix of products manufactured overseas in both TAA and non-TAA countries to meet our needs. Sources of domestically manufactured products don't really exist, so I don't expect the BAA to be an issue due to non-availability. However, it's the inclusion of non-TAA items that concerns me. Restricting these BPAs to only TAA compliant items will severely limit our ability to fulfill our needs.

What factor determines the applicability of the BAA and TAA regarding FAR 13 BPAs: the aggregate value of BPA, or the individual value of each call?

I've been searching for answers, precedents, and anything else I could find. I'm curious what the experts in the field think about this. Due to the complexity of the BAA and TAA, I probably should seek out legal counsel. However, I'm not quite ready to do that yet.

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Regarding the TAA, FAR 25.403( b )(3) states:

If, in any 12-month period, recurring or multiple awards for the same type of product or products are anticipated, use the total estimated value of these projected awards to determine whether the WTO GPA or an FTA applies. Do not divide any acquisition with the intent of reducing the estimated value of the acquisition below the dollar threshold of the WTO GPA or an FTA.

I could not find an analogous rule for the BAA.

In your situation, what would be the value of awards in the busiest 12-month period?

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In any given year, the aggregate value of calls against a single BPA would likely be anywhere from $150k to $1M, with most exceeding $204k.

FAR 25.403( b )(3) certainly helps to substantiate the applicability of the TAA. If I follow where you're going with this, I'm anticipating your thoughts are that FAR 13 BPAs should be treated analagous to contracts under the BAA and TAA, and that the acts not only apply to the BPAs themselves, but also to each individual call against the BPA, regardless of individual call dollar value?

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I was trying to determine which clause would go in your BPA. If the WTO GPA applied pursuant to FAR 25.403( b )(3), then I think that your BPA would have to include FAR 52.225-5, which would apply to all calls. That clause requires delivery of U.S.-made or designated country end products.

Do any of the exceptions at FAR 25.401( a ) apply?

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Maybe you could consider setting the requirement aside for Small Business (SB), which eliminates TAA applicability per the FAR (FAR 25.401 (a)(1)). This does bring a potential issue of dealing with Non-Manufacturer Waivers for items that domestic SBs can't make in the U.S., but I presume you will be able to use some of the SBA's Class Waivers for your procurement (and request individual waivers, as applicable). Regardless, this would be an easier process that looking into TAA waivers. A set aside may be okay since there may be an adequete amount of U.S. SB dealers that can meet your requirement.

http://www.sba.gov/content/non-manufacturer-waivers

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None of the exceptions at FAR 25.401 apply to this acquisition, except the possibility of using a set-aside.

Regarding the use of a set-aside, I was anticipating using full and open competition to waive the BAA on the basis of non-availability IAW FAR 25.103( b ). However, I think this is where I started leading myself astray. I was reading FAR 25.103( b )(3) and saw that a written determination of non-availability is not reqired when using FAOC and no offers for domestic end products are received. Even though my market research is very comprehensive, I question whether my agency would agree that it's comprehensive enough for the HCA to sign off on a written individual determination.

What I overlooked was FAR 25.103( c ) regarding unreasonable cost. I don't see anything that states FAOC must be provided for when making a determination of unreasonable cost, which brings me to another question: Would it be reasonable to exempt the acquisition from the BAA requirements on the basis of unreasonable cost if no offers for domestic end products are received?

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Would it be reasonable to exempt the acquisition from the BAA requirements on the basis of unreasonable cost if no offers for domestic end products are received?

No. You need a domestic offer in order to determine its cost to be unreasonable. See FAR 25.105.

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