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Robert Tibbitts

Buy American Act and Services

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I currently have work under a government contract that we want to have a large International CRO provide services for. Some of the services the CRO will be providing are from workers located in India. How does the Buy American Act apply to services conducted in a foreign country? Thanks.

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I'm not sure it DOES apply. On the other hand, what kind of security requirements are in your contract?

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I don't have the contract yet. Just working on the possible issues with the project once it gets issues. Right now it doesn't look like any type of "secret" or enhanced security requirements will apply.

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FAR Subpart 25.1 and Buy American apply to contracts for supplies, or contracts for services involving the furnishing of supplies.  FAR Subpart 25.2 and Buy American apply to construction contracts.

But it might be that FAR Subpart 25.4 and Trade Agreements will apply to the acquisition, instead of Buy American.  

You can read all about it in FAR Part 25.

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There may not be a separate TAA clause for services, but the TAA does apply to services, and the general TAA clause - 52.225-5 applies. FAR Part 25.4 addresses the TAA, including its applicability to services. For example, 25.402(a)(2) states that the country of origin of a service is the country in which the firm providing the services is established. The DFARS coverage is of course in 225.4.

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2 hours ago, ron vogt said:

There may not be a separate TAA clause for services, but the TAA does apply to services, and the general TAA clause - 52.225-5 applies. FAR Part 25.4 addresses the TAA, including its applicability to services. For example, 25.402(a)(2) states that the country of origin of a service is the country in which the firm providing the services is established. The DFARS coverage is of course in 225.4.

FAR 52.225-5 requires the contractor to deliver U.S.-made or designated country end products. It does not require or prohibit the performance of services by a contractor established in any particular country or class of countries. Paragraph (b) states:

Quote

Delivery of end products. The Contracting Officer has determined that the WTO GPA and FTAs apply to this acquisition. Unless otherwise specified, these trade agreements apply to all items in the Schedule. The Contractor shall deliver under this contract only U.S.-made or designated country end products except to the extent that, in its offer, it specified delivery of other end products in the provision entitled “Trade Agreements Certificate.”

FAR 25.403( c )(1) restricts the purchase of other than U.S. or designated country services, but subsequent to award no FAR or DFARS clause requires or prohibits the contractor from using sources from nondesignated countries to perform work.

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Right -- a services contract subject to Trade Agreements may be awarded to a Delaware corporation wholly owned by Indians with 100% of the work intended be performed in India -- even though India is not a designated country.  On the other hand, that same contract could not be awarded to company chartered in the Bahamas Argentina or Brazil wholly owned by Americans with 100% of the work intended to be performed by Americans.  The only thing that matters is "the country in which the firm providing the services is established."

By definition, a contract subject to Trade Agreements cannot have been awarded as any sort of a small business set-aside, so it will not have the limitations on subcontracting terms common to set-aside contracts.

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On 8/18/2017 at 5:56 PM, ji20874 said:

On the other hand, that same contract could not be awarded to company chartered in the Bahamas wholly owned by Americans with 100% of the work intended to be performed by Americans.

Actually, Bahamas is a designated country, so that would be ok. But your statement would be true with a nondesignated country.

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Robert,

The Irish firm is okay if your contract is subject to Trade Agreements.  Does your contract include the clause at FAR 52.225-3 or -5?

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22 hours ago, ji20874 said:

Robert,

The Irish firm is okay if your contract is subject to Trade Agreements.  Does your contract include the clause at FAR 52.225-3 or -5?

At this point, why does it matter? He already has the contract and neither FAR 52.225-3 nor -5  apply to services--they apply to end products.

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If the contract includes the clause at FAR 52.225-3 or -5, then there is no traditional limitation on subcontracting (but the ITAR or NISPOM or something like that, or a homemade contract clause, could effectively limit subcontracting).  So a YES answer will be good for the original poster, because it means there is no traditional limitation on subcontracting.

A NO answer might suggest further inquiry into the question of whether work can be subcontracted.  For example, the contract might not contain either clause because it is a set-aside -- if it is a set-aside, then a limitation on subcontracting will be built into the contract, and the proposed subcontract will have to fit within that limitation.  But that's a second-level inquiry -- one step at a time.

Don is right -- the identity of the proposed subcontractor as Irish is irrelevant, and the proposed location of the work in India is also irrelevant to the question of whether the work may be subcontracted -- these questions apply to prime contract awards subject to Trade Agreements, not to subcontracts.  The question of whether the prime can issue the proposed subcontract is one of limitations on subcontracting, not Buy American/Trade Agreements.

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