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sackanator

Made in America on GSA

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Background:  FFP contract award using GSA, publicized on GSA E-Buy as a small business set-aside.  Award amount was $92,112.00 which included a program counsel for operating the machine.  On GSA the product is listed as Made in America, at least for the main component currently listed at $43,002.52.  A duty free waiver was submitted to this office for Foreign supplier with a "Value of Foreign Supplies = $52,000.00".  Taiwan is not listed as qualifying country DFARS 225.872-1 & 225.003 (10). 

Since it appears that over 50% of the value of the item is made in Taiwan, and Taiwan isn't a qualifying country would FAR 25.105(a-c) apply for evaluation.  (12% since its a small business concern)  

Also if evidence suggests that they have the item listed as made in America but the duty free waiver indicates it was made/sent from Taiwan, would that be a bit deceiving.  I can't be sure because I don't have a breakdown of  the quote associated to the various components of the system.  In other words it might be possible the main component isn't part of the $52,000.00, however the "Product/Supplies Description" in the duty free waiver seems to indicate it is the main component.   

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I would reach out the GSA contracting officer for that contractor's MAS contract. When I was at GSA we received complaints like this all the time, as well as TAA complaints.  Since each CO deals with over 100 contractors, and each contractor can have thousands of items on their contract it is impossible for the GSA CO to monitor this.  However, if you raise it to their attention they should be able to investigate.

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4 minutes ago, Don Mansfield said:

What does Taiwan not being a qualifying country have to do with the price of rice in China?

DFARS 225.872-1(a) if I read it correctly states, "DoD has determined it inconsistent with the public interest to apply restrictions of the Buy American statute or the Balance of Payments Program", which I thought to understand this pointed to FAR 25.103(a) for exemptions of the BAA.      

     

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Right, but you already made the award, correct? Why do you care about the evaluation preference? Are you going to go back and evaluate the quotes?

If you wanted to apply the DoD rules to your acquisition, then you would have had to include DFARS 252.225-7000 and -7001 in the solicitation. Did you do that?

-7000 puts quoters on notice that you plan to add a 50% price factor to a quoted end product that is not a domestic or qualifying country end product, and requires quoters to list such products in their quotes. If you included DFARS 252.225-7000 in the RFQ, how did the quoter respond?

My guess is that the FSS contract includes the Trade Agreements Act clause. If you didn't apply the DoD rules to the acquisition, then the quoted product is compliant because Taiwan is a designated country.

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I did include a statement on the E-Buy RFQ "All applicable FAR, DFARS & AFARS clauses and provisions apply to this RFQ" knowing that GSA does not include DoD or AFARS clauses in their awards.  Not sure if that would hold much weight in a court room or is considered a proper statement.

There were two quotes received.   

My concern is that on GSA Advantage they list their product as made in the USA, thus no reason to evaluate their quote under FAR 25.105(a-c) since both quotes said that the products were made in the USA.  The quote that won was just slightly less than second lowest price.  If I would have used the 12% added price since it was a small business set-aside the second place quote which is known to be an American made product would have won.  As it was, we have had a lot of difficulty with the vendor that won the award.  If they claiming to have made in America products that are actually made/manufactored in Taiwan, I want to at least let GSA know about it.

Would a qualified country count if FAR 25.401(a)(1) applies?  Part 25 and its supplements is not my strongest point in understanding but aren't there minimum amounts (191K) to use the WTO GPA if this requirement was just shy of 100K.          

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Taiwan is a qualified country under the WTO GPA. 

Since this requirement was a small business set aside, if FAR 25.401(a)(1) lists acquisitions set aside for small businesses as an exception to the Trade Agreements, would I still be able to consider products from Taiwan, Italy or any of the other WTO GPA's under set asides to small business?

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If your solicitation included DFARS 252.225-7000 and -7001, then you could consider products other than domestic or qualifying country end products. However, you would have to follow the procedures at DFARS subpart 225.5, which may include adding a 50% factor to the price of the offered item. Look at the examples at DFARS PGI 225.504.

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sackanator - I assume you meant that Taiwan is a designated country under the WTO GPA, not a qualified country. Qualifying countries (not qualified) are very different from designated countries.

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Yep I did, just kidding.  I haven't spent enough time to be in complete understanding of the different terms under that FAR part. 

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I don’t get it.

How can BAA clauses ever apply to a GSA purchase, which by definition is subject to TAA clauses? You can’t have both. How can a GSA Schedule contractor (small or large) that has a GSA Schedule contract that can only include TAA  compliant products then on a GSA set aside order under that GSA Schedule seek exception to TAA under 25.401(a)(1)?

From the MAS Ordering Guide:

The Trade Agreements Act (TAA) applies to all GSA Schedule orders, regardless of dollar amount. GSA applies the TAA at the Schedule contract level, and, as a result, it applies to all Schedule orders, regardless of the dollar value. This means that all Schedule products and services must come from the United States or a designated country.

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Also, the reference to United States in the MAS Ordering Guide statement does not invoke the BAA clause and the dollar value BAA test but keeps the TAA clause and the TAA test that relies on substantial transformation not dollars.

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Whynot,

The use of a FSS doesn't excuse DoD from DoD-specific regulations pertaining to foreign acquisitions. Regarding the use of FSSs, DFARS 208.404(a)(iii) states:

Quote

When a schedule lists both foreign and domestic items that will meet the needs of the requiring activity, the ordering office must apply the procedures of part 225 and FAR part 25, Foreign Acquisition. When purchase of an item of foreign origin is specifically required, the requiring activity must furnish the ordering office sufficient information to permit the determinations required by part 225 and FAR part 25 to be made.

Let's assume that FAR 52.225-5, Trade Agreements, is in the FSS contract. As such, then the listed items must be U.S.-made or designated country end products (unless they specified otherwise in their response to FAR 52.225-4). Now, assume DoD wants to order something off of the schedule, but the DoD does not apply the TAA to that particular item for some reason (let's say it's not listed at DFARS 225.401-70). Assume further that the conditions for the use of DFARS 252.225-7000 and -7001 apply (see DFARS 225.1101(1) & (2)). As such, the solicitation for the FSS order will contain DFARS 252.225-7000, which requires offerors to provide domestic or qualifying country end products. Not all U.S.-made or designated country end products meet the definition of "domestic end product" or "qualifying country end product" as defined in DFARS 252.225-7000. As such, the DoD will use the procedures in DFARS 225.502 to evaluate offers from FSS contractors of TAA-compliant products that are not domestic end products or qualifying country end products.

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Thanks. Great answer.

However, as written  DFARS 208.404(a)(iii)  seems to only require DoD COs to "apply the procedures" and the like without actually including the actual provisions and clauses. I don't think that you can have both TAA and BAA clauses being operational at the same time.

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Whynot,

You wouldn't be able to apply the procedures without the offeror's response to DFARS 252.225-7000. That's how the offeror would tell you the type of end product being offered.

I don't see a problem with the TAA and BAA applying to the same acquisition. They are not mutually exclusive. That's why there are clauses like DFARS 252.225-7036, Buy American—Free Trade Agreements--Balance of Payments Program, and FAR 52.225-11, Buy American—Construction Materials under Trade Agreements.

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On ‎9‎/‎14‎/‎2016 at 0:56 PM, sackanator said:

Background:  FFP contract award using GSA, publicized on GSA E-Buy as a small business set-aside.  Award amount was $92,112.00 which included a program counsel for operating the machine.  On GSA the product is listed as Made in America, at least for the main component currently listed at $43,002.52.  A duty free waiver was submitted to this office for Foreign supplier with a "Value of Foreign Supplies = $52,000.00".  Taiwan is not listed as qualifying country DFARS 225.872-1 & 225.003 (10). 

Since it appears that over 50% of the value of the item is made in Taiwan, and Taiwan isn't a qualifying country would FAR 25.105(a-c) apply for evaluation.  (12% since its a small business concern)  

Also if evidence suggests that they have the item listed as made in America but the duty free waiver indicates it was made/sent from Taiwan, would that be a bit deceiving.  I can't be sure because I don't have a breakdown of  the quote associated to the various components of the system.  In other words it might be possible the main component isn't part of the $52,000.00, however the "Product/Supplies Description" in the duty free waiver seems to indicate it is the main component.   

 

Setting aside the TAA/BAA applicability, two concerns I'd have.  These are just possibilities:

1.  When the offeror does not have a connection to the manufacturer, they may (in my experience) just list the item as US origin on their GSA Schedule.  The reason is that they do not know where it will be coming from (since they are not buying from the original manufacturer), as they will not actually buy the item until an end-user steps and purchases.  Note that GSA for the most part does not indicate or distinguish the offeror's relationship with the manufacturer, nor does it seek this information with new offers... so offers for item X may appear side-by-side, one from a company buying from the manufacturer (and knowing the actual country of origin) and the other not.    As a buyer you may (or may not, some product types are regulated) may be permitted to buy used / refurbished / not from the OEM equipment - but as a practical matter you should know when this is happening.  A blanket "made in USA" that doesn't match reality raises this question. 

2. As mentioned above, TAA relies on a substantial transformation test.  The product may have shipped from Taiwan but was previously substantially transformed in the US (or a qualifying country.).   This may make it technically compliant.   But you have to ask...what was it doing in Taiwan?  Does this pass the sniff test for various other regulations, like security or other procurement regulations?  We live in global economy but...to make a $50K product in a qualifying country, then to ship it to a non-qualifying country to sell it back to the U.S....that might be worthy of further investigation as to why the product is moving so far and who's touching it.  

At a minimum, upon receipt I'd contact the manufacturer and, to the degree possible, ensure you have clean title to the machine, any software licenses it may include and rights to whatever warranties it should include.  I might also check to see what they say about where it was made.  I might withhold acceptance until I'm confident of these things. 

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1 hour ago, jayandstacey said:

When the offeror does not have a connection to the manufacturer, they may (in my experience) just list the item as US origin on their GSA Schedule.

Assuming they are certifying that their offered products are U.S.-made or designated country end products IAW FAR 52.212-3(g)(5), offerors would be risking liability for making a false statement. Not to say it doesn't happen--I just wonder if these offerors know the risk they are taking.

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The product was a Manford machine http://www.manford.com.tw/.  There is no indication that " they do not know where it will be coming from (since they are not buying from the original manufacturer)".  The duty free waiver for the product coming from Taiwan with a value of Foreign Supplies $52,000 and total dollar value approximately $92,000 to me shows they knew they would be buying direct from the manufacturer. 

This was done as an RFQ on GSA E-Buy, during the solicitation period the company rep that provided the quote for the Manford called me from Taiwan.   

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On ‎9‎/‎15‎/‎2016 at 7:38 AM, Desparado said:

I would reach out the GSA contracting officer for that contractor's MAS contract. When I was at GSA we received complaints like this all the time, as well as TAA complaints.  Since each CO deals with over 100 contractors, and each contractor can have thousands of items on their contract it is impossible for the GSA CO to monitor this.  However, if you raise it to their attention they should be able to investigate.

I reached out to the contracting officer of the FSS that was used to order the machine. 

I have a concern about the listing under contract GS-21F-XXXXX.  They list the machine as a made in United States of America.  We did an award

                for this product stating All applicable FAR and DFARS clauses and provisions  are applicable.  After awarding a contract to this company and seeing that

                the product was made in America, we did not apply FAR part 25.105 for reasonableness of cost.  This was a small business set aside, thus a 12%

                inclusive of duty should have been added to the price of their quote, otherwise the alternative product that is made in America should have been

                the winning quote.

               

                I mention this because the manford website Caution-http://www.manford.com.tw/ < Caution-http://www.manford.com.tw/ >  says

                they are based out of Taiwan and the attached duty free shows that this machine was shipped out of Taiwan.

This was the response "Are you referring to the Buy American Act if so, that does not apply to MAS contracts, also the Small Business set-aside does not apply, and Taiwan is a TAA compliant country under 52.225-5.

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The "Made in America" under TAA is not the same as under BAA. GSA is TAA. As such any such statement under a TAA contract cannot be relied upon that it meets the BAA test.

I don't think the Balance of Payment clauses invoke both TAA and BAA clauses for a single item. These clauses identify items that are either TAA or BAA not both TAA and BAA.

You can't have a single item be subject to both TAA and BAA.

Under the GSA, for applicable DoD orders, the CO needs to apply the BAA price evaluation factor to determine price reasonableness. You don't need a BAA clause to do this but only have to follow the procedures.

 

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Besides, GSA Schedule 70 items should automatically qualify for the BAA Commercial IT exemption, as it is an IT schedule limited to commercial items, kinda fits.

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