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TAA Exception to BAA


Whynot

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If TAA is an exception to BAA is it reasonable to first look at the exceptions to BAA per FAR 25.202 before activating the TAA provisions? Specifically, if items qualify for the Information technology that is a commercial item exception to BAA per FAR 25.202(a)(4) why would it be necessary to go to the TAA provisions? Under TAA, there is no such exception. Presumably an item could be exempt under BAA and not be TAA compliant although TAA is an exception to BAA. How is this possible?

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If TAA is an exception to BAA is it reasonable to first look at the exceptions to BAA per FAR 25.202 before activating the TAA provisions? Specifically, if items qualify for the Information technology that is a commercial item exception to BAA per FAR 25.202(a)(4) why would it be necessary to go to the TAA provisions? Under TAA, there is no such exception. Presumably an item could be exempt under BAA and not be TAA compliant although TAA is an exception to BAA. How is this possible?

If the acquisition were subject to the [World Trade Organization] WTO [Agreement on Government Procurement] GPA, then the purchase restriction at FAR 25.403( c ) would still apply. If you are non-DoD, see the clause prescription at FAR 25.1101( c ).

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The agency must do 2 things before inserting the TAA clause:

Subpart 25.11 – Solicitation Provisions and Contract Clauses

25.1101 (c ) (1) Insert the clause at 52.225-5, Trade Agreements, in solicitations and contracts valued at $204,000 or more, if the acquisition is covered by the WTO GPA (see subpart 25.4) and the agency has determined that the restrictions of the Buy American statute are not applicable to U.S.-made end products. If the agency has not made such a determination, the contracting officer must follow agency procedures.

FAR 25.402(a) (1) The Trade Agreements statute (19 U.S.C. 2501, et seq.) provides the authority for the President to waive the Buy American Act and other discriminatory provisions for eligible products from countries that have signed an international trade agreement with the United States, or that meet certain other criteria, such as being a least developed country. The President has delegated this waiver authority to the U.S. Trade Representative. In acquisitions covered by the WTO GPA, Free Trade Agreements, or the Israeli Trade Act, the USTR has waived the Buy American statute and other discriminatory provisions for eligible products. Offers of eligible products receive equal consideration with domestic offers.

Note that the agency must review the acquisition first for BAA applicability before implementing TAA. If there are restrictions that require the mandatory use of BAA then TAA is not triggered. I suggest that if BAA is not required at all then there is no need to proceed with implementing the TAA waiver to BAA. There is simply no need for the TAA waiver if the acquisition is not restricted by the BAA – there is nothing to waive.

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Whynot,

The inclusion of FAR 52.225-5 is not contingent on whether the BAA applies. The clause prescription is clear. The second condition: "and the agency has determined that the restrictions of the Buy American statute are not applicable to U.S.-made end products" is determinative of whether you should use that particular FAR clause, not whether the TAA applies. If an agency determined that the restrictions of the BAA are applicable to U.S.-made end products, then they would have to use their own clause, not the FAR clause.

You're getting tripped up by FAR 25.402( a )(1).

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Question: If we did away with Buy American Act and Trade Agreements Act ... indeed, if we did away with most if not all of FAR Part 25 ... would we streamline and shorten acquisitions, or would it make no difference?

Just wondering.

H2H

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Guest Vern Edwards

You'd have one less certification to worry about and one less basis for protest, so it would streamline the process to that extent.

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Vern,

True. And I was also thinking it would remove one vector for False Claim Act (FCA) litigation.

Plus, it might reduce complexity and allow people to focus on other areas, or so it seems to me.

H2H

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  • 8 months later...

Apologies for resurrecting an old topic, but I have a specific situation related to this that has me thinking in circles. I can't formulate a logical response to a client about an intended acquisition strategy, though admittedly not everything we do is logical.

My agency has a multiple-award GSA BPA with three resellers of Hewlett-Packard (HP) LAN switches and related equipment. This was awarded competitively. The three vendors are given fair opportunity to compete for individual calls.

We now have a need to purchase a moderate quantity of part number J9150A, which is (for the purpose of this discussion) a plug-in module for a LAN switch. The purchase will be on the order of 30 units, and we estimate that to be on the order of $21,000.00.

The LAN switches these modules will be plugged into are made in Mexico. Assume for the purposes of this discussion that the modules themselves are made in China (the truth is more complicated, but does not further this discussion).

Part number J9150A is available through GSA Advantage, but (according to our BPA holders and HP direct) is "TAA compliant" only if assembled at point-of-sale with a switch. The logic is, the switch is made in Mexico and is expensive, whereas the module is made in China and is cheap; the unit is considered made in Mexico as a whole and is therefore TAA compliant. Our BPA holders will not accept a call against our GSA BPA for the module itself, citing GSA's website at:

http://www.gsa.gov/MASDESKTOP/section3_10.html

In relevant part: "All Schedule products and services must come from the U.S. or a designated country."

At least one of our BPA holders also has a NASA SEWP contract, and will accept an order for the modules that way. NASA SEWP:

https://support.sewp.nasa.gov/link/portal/15028/15032/Article/283/Are-SEWP-products-BAA-TAA-Buy-American-Act-Trade-Agreement-Act-compliant

In relevant part: "...the TAA is applicable to all SEWP Contracts. In accordance with the TAA, only U.S.-made or designated country end products shall be purchased under SEWP contracts unless an exception exists and is documented by the Contracting Officer..."

Specific questions:

1. Both the GSA contract and the SEWP contract contain the clause at 52.225-5, so why the seemingly different treatment between GSA and NASA? GSA says all products must come from the US or a designated country, whereas NASA says "...unless an exception exists..." The exception here would be that the product is made in China and nowhere else. FAR 25.403( c )( 1 ).

2. The modules are "information technology that is a commercial item," FAR 25.103( e ), and therefore the Buy American Act does not apply. If I were to proceed on the open-market, and justify the brand-name-only purchase of these parts, I could buy the modules made in China. Recall the estimated value is $21,000.00. 52.225-1 does not apply (see 25.1101( a )( 1 )( ii )). If the value of this purchase were greater than $25K but less than $204K, 52.225-3 would not apply (see 25.1101( B )( 1 )( i )( b )). If neither 52.225-1 nor 52.225-3 apply, then neither of the corresponding provisions at 52.225-2 or 52.225-4 would apply either; this means contractors would not even be required to inform me of the country of origin of these products at all. Correct?

3. If the value of this purchase were greater than $204K, 52.225-5 would apply IAW 25.1101( c )( 1 ). Don answered that above, when he wrote: "The inclusion of FAR 52.225-5 is not contingent on whether the BAA applies. The clause prescription is clear." Like Whynot, I have also been tripped up by 25.402( a )( 1 ), where on first reading it seems that the TAA waives the BAA, so if the BAA doesn't apply, then there is nothing to waive. However, I note 25.402( a )( 1 ) says that the TAA "...provides the authority for the President to waive the Buy American statue and other discriminatory provisions;" the BAA may not apply, but other discriminatory provisions may exist. The operative restriction at 25.403( c )( 1 ) is: "...acquire only U.S.-made or designated country end products or U.S. or designated country services, unless offers for such end products or services are either not received or are insufficient to fulfill the requirements..." If all offers were for modules made in China, then I purchase the modules made in China. If one offer is for modules made in either the US or a designated county, then I cannot purchase the modules made in China. That's the "discriminatory provision." Correct?

4. Why is it that I can purchase up to $204K worth of information technology commercial items made in China on the open market, and nobody would even know or care, but I (apparently) can't buy them through GSA?

5. How would you all recommend proceeding? I'm leaning towards an open-market purchase order and calling it a day. My head hurts.

Thanks,

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GeoJeff, how I have handled situation like yours in the past it's to conduct a small business set-aside on a GWAC. Switches are waived from the non-manufacturers rule and small business set-asides are an exception to the TAA. As a bonus, your agency will receive small business credit, with almost 20 small business HP-resellers.

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  • 2 weeks later...
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