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FAR 25 - Buy American Act and Trade Agreements


MileHighAcq

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If I was the staff reviewer of the solicitation/contract file and you had inserted any clause in the solicitation/contract other than the one prescribed by FAR, I would reject your file and send it back unapproved.

And I wouldn't engage in any Socratic Q&A or listen to your bs argument.

And the next time one of your files came to me I would go over it with a scanning electron microscope.

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2 hours ago, Lionel Hutz said:

You follow the clause prescription -  "Insert the clause at 52.225-11, Buy American-Construction Materials under Trade Agreements, in solicitations and contracts for construction that is performed in the United States valued at $7,032,000 or more."

That dollar value in the prescription changes to match the WTOGPA threshold.  So, it will only be used to apply the BAA to construction contracts that are covered by the WTOGPA, i.e., "Construction Materials under Trade Agreements."  You are not using that clause because 25.4 applies.  You are using that clause because the BAA itself has a waiver for construction materials purchased under trade agreements and 52.225-11 implements the BAA restrictions and applicable waiver. Yes, you use the clause for small business set-asides because the BAA applies to small business set-aside contracts.

If the value of the contract is below the threshold, you follow the applicable prescription - "Insert the clause at 52.225-9, Buy American-Construction Materials, in solicitations and contracts for construction that is performed in the United States valued at less than $7,032,000."

So add clause 52.225-11 to a small business set-aside over $7,032,000 - a clause which applies the BAA, but also waives the applicability of the BAA for designated countries IAW trade agreements, even though FAR 25.401(a)(1) exempts small business set-asides from the applicability of trade agreements...

maybe it's just me, but that does not compute.  

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1 hour ago, ji20874 said:

I wouldn't say the -3 and the -11 clauses are analogous.  

The prescription for the -3 clause says to use the clause if no exception in 25.401 applies (see FAR 25.1101(b)(1)(i)(C)).  But FAR 25.401(a)(1) speaks to set-asides, so I would not use the -3 clause if a procurement was a set-aside.

I think the -3 and -11 are analogous in that both implement the BAA in conjunction with TA (i.e. waiving the requirements of the BAA for designated countries). The problem arises because the prescription for clause 52.225-11 does not account for it, whereas there is no problem with the inapplicability of the -3 clause because the prescription for the -1 clause accounts for the possible inapplicability of the -3 clause due to the procurement being set aside for small business concerns.

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13 minutes ago, Don Mansfield said:

I said the clauses were analogous, not the prescriptions.

I wouldn't say the -3 and -11 clauses are analogous.

 

2 hours ago, MileHighAcq said:

So add clause 52.225-11 to a small business set-aside over $7,032,000...

Follow the FAR -- that's your job.  The prescriptions in FAR 25.1101 and 25.1102 are correct.

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1 hour ago, ji20874 said:Follow the FAR -- that's your job.  The prescriptions in FAR 25.1101 and 25.1102 are correct.

I do. But that doesn’t mean I don’t ask questions when the FAR doesn’t seem to make sense. The writers of the FAR are not infallible. Parts of the FAR are poorly written, obtuse, and barely intelligible.

In my mind the prescriptions at FAR 25.1102 for construction materials should parallel the prescriptions for supplies at FAR 25.1101. The fact that they doesn’t is a mistake/oversight in my opinion.

Clause 52.225-11 is clearly meant to be included when TA applies. When TA doesn’t apply, be it because it’s below the threshold or because the procurement is set aside for small businesses, it makes no sense to use clause 53.225-11 - I don’t care what the FAR says.

Yes, I will follow it, but I will also ask questions, and try to find satisfactory answers.

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2 hours ago, MileHighAcq said:

Yes, I will follow it, but I will also ask questions, and try to find satisfactory answers.

You won't find answers bickering here. I gave you the best answer you're going to get at this website several posts ago. If you want a better answer write to the FAR councils. I think the civilian agency council handles Part 25.

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I don't recall this having been mentioned in any of the above, but noncompliance with the clause prescription at FAR 25.1102(c) for whatever reason would constitute a FAR deviation. See the definition of "deviation" at FAR 1.401(b):

Quote

The omission of any solicitation provision or contract clause when its prescription requires its use.

Of course, someone among you is almost certainly going to argue that using the clause in accordance with its prescription would be a deviation as defined at FAR 1.401(a), since you argue that its use is inconsistent with FAR 25.401(a)(1).

Either way, someone among you could argue that whichever you decide to do you must proceed in accordance with FAR 1.403. See also FAR 1.405.

Forgive me if any of this was mentioned in any earlier post.

Seeking a deviation on the basis of the arguments presented in this thread might be a way to resolve the controversy.

We work in a utopia of rules.

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16 hours ago, MileHighAcq said:

even though FAR 25.401(a)(1) exempts small business set-asides from the applicability of trade agreements...

No, it does not.  FAR 25.401(a)(1) exempts small business set-asides from the applicability of FAR Subpart 25.4.  

FAR Subpart 25.4 contains regulations that implement the Trade Agreements ACT.

An acquisition can be outside the scope of Subpart 25.4 and yet still be covered by other laws, such as the BAA, that ALSO have provisions that deal with the WTOGPA.

Each statutory authority stands on its own.  Conceivably, you could have 10 different statutes that implement portions of a trade agreement.  Or perhaps its the other way around and the one trade agreement addresses the requirements of 10 different statutes.  Either way, if one of those statutes and its implementing regs says it does not apply to a subset of acquisitions, that does not mean the other 9 also do not apply.

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On 3/17/2022 at 7:45 AM, Vern Edwards said:

There is no conflict between FAR 25.401(a)(1) and FAR 52.225-11, which implements the Buy American Act.

 

1 hour ago, Don Mansfield said:

Before this discussion, I would have said that FAR 52.225-11 implemented the Trade Agreements Act. Now I'm not sure.

Ha! So Lionel has got you thinking. I told you that two days ago.

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58 minutes ago, Vern Edwards said:

 

Ha! So Lionel has got you thinking. I told you that two days ago.

That's not what he's got me thinking about. I'm trying to make sense of his claim that there's a difference between implementing trade agreements and the Trade Agreements Act. If he answers my question in the affirmative, then I'd understand him (not saying I would agree with him). If he answers in the negative, then I'm back to not understanding him. And I'm hoping he doesn't say that the clause implements the BAA again. I know that and that's not what I'm asking him.

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I think you are misinterpreting FAR 25.401(a)(1). I think that because I have read the Trade Agreements Act. It mentions small business only once, at 19 USC § 2511. That section reads, in pertinent part, as follows:

Quote

(a) Presidential waiver of discriminatory purchasing requirements

Subject to subsection (f) of this section, the President may waive, in whole or in part, with respect to eligible products of any foreign country or instrumentality designated under subsection (b), and suppliers of such products, the application of any law, regulation, procedure, or practice regarding Government procurement that would, if applied to such products and suppliers, result in treatment less favorable than that accorded--

(1) to United States products and suppliers of such products; or

(2) to eligible products of another foreign country or instrumentality which is a party to the Agreement and suppliers of such products.

*     *     *

(f) Small business and minority preferences

The authority of the President under subsection (a) of this section to waive any law, regulation, procedure, or practice regarding Government procurement does not authorize the waiver of any small business or minority preference.

 

I think that all 25.401(a)(1) means is that the Trade Agreements Act does not preclude the use of small business set-asides.

I do not think it means that agencies cannot waive the Buy American Act with respect to countries with trade agreements when conducting a small business set-aside, which is all that FAR Subpart 25.4 and 52.225-11 do. If it meant that, it would mean that small businesses and the government would have to abide by the Buy American Act under a set-aside even when domestic construction materials are too expensive or unavailable.

Think of what the implications would be for bonding, which is not an issue under supply contracts.

But what do I know?

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21 hours ago, Don Mansfield said:

Ok. Would you also say that FAR 52.225-11 implements one or more of the laws listed at FAR 25.400(a)(2)?

Yes, it implements the trade agreements listed.  The clause even has Alt 1 that accounts for acquisitions that exceed most of the agreement thresholds, but not all of them.

The BAA allows the government to waive its application if the price of foreign construction material is unreasonable.  This is implemented in the clause (paragraphs (b)(4), (c ), and (d)) by allowing the contractor to submit evidence that the cost of domestic construction materials exceeds the cost of foreign material by more than 20 percent. The KO can then add that domestic construction material to the list of materials to which the BAA requirements do not apply. (Paragraph (b)(4).)

The Trade Agreements Act does not provide for a waiver based on ‚Äúunreasonable cost.‚Ä̬† If the clause were implementing the TAA, it would say the contractor is required to provide domestic or designated country construction materials, with the only exception being a KO determination that there were no offers for such products or that the offers for those products are insufficient to fulfill the requirements of this solicitation.¬† See, e.g., FAR 52.225-5(b) and FAR 52.225-6(c).

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24 minutes ago, Lionel Hutz said:

If the clause were implementing the TAA, it would say the contractor is required to provide domestic or designated country construction materials, with the only exception being a KO determination that there were no offers for such products or that the offers for those products are insufficient to fulfill the requirements of this solicitation.

But the clause says:

Quote

In addition, the Contracting Officer has determined that the WTO GPA and Free Trade Agreements (FTAs) apply to this acquisition.

If the WTO GPA and FTAs apply, doesn't that contradict a broad interpretation of 25.401(a)(1)?

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2 hours ago, Vern Edwards said:

But the clause says:

If the WTO GPA and FTAs apply, doesn't that contradict a broad interpretation of 25.401(a)(1)?

Yes it does.  I don't support a broad interpretation of 25.401(a)(1).  I do not think FAR 52.225-11 is attempting to implement 25.401(a)(1).

On 3/17/2022 at 5:29 PM, Lionel Hutz said:

 If all we are doing is looking at FAR 25.1102 and FAR Clause 52.225-11, which was the original question, then there is no need to worry about FAR 25.401(a)(1).  FAR Clause 52.225-11 implements BAA requirements and waivers under BAA authority.  It has nothing to do with the TAA or FAR 25.401(a)(1).

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4 hours ago, Lionel Hutz said:

Yes, it implements the trade agreements listed.  The clause even has Alt 1 that accounts for acquisitions that exceed most of the agreement thresholds, but not all of them.

Ok, now I understand your position. Earlier, you wrote:

Quote

If the Supreme Court struck down the waiver authority of the TAA, clause 52.225-11 would not need to be changed as it does not rely on TAA authority.

Doesn't the authority to treat least developed country construction material as designated country construction material rely on TAA authority (specifically 19 U.S.C. 2511(b)(4))? So, if the TAA waiver authority were struck down, FAR 52.225-11 would then have to be changed?

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6 hours ago, Don Mansfield said:

Doesn't the authority to treat least developed country construction material as designated country construction material rely on TAA authority (specifically 19 U.S.C. 2511(b)(4))? So, if the TAA waiver authority were struck down, FAR 52.225-11 would then have to be changed?

No.  The BAA states it does not apply to any articles, materials, or supplies procured pursuant to a least developed country designation.  41 U.S.C. § 8303(b)(1)(B).  So, even if the TAA no longer excepted materials from least developed countries, the BAA still has its own exception that applies.

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29 minutes ago, Lionel Hutz said:

No.  The BAA states it does not apply to any articles, materials, or supplies procured pursuant to a least developed country designation.  41 U.S.C. § 8303(b)(1)(B).  So, even if the TAA no longer excepted materials from least developed countries, the BAA still has its own exception that applies.

Now I'm back to not understanding you. The authority to make a least developed country designation comes from the TAA. Correct? 

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40 minutes ago, Don Mansfield said:

Now I'm back to not understanding you. The authority to make a least developed country designation comes from the TAA. Correct? 

No.  The UN designates countries as LDCs.  (https://unctad.org/topic/least-developed-countries/recognition) 

See also the definition of LDCs in the TAA: "The term 'least developed country' means any country on the United Nations General Assembly list of least developed countries." 19 U.S.C. § 2518(6).

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3 hours ago, Lionel Hutz said:

No.  The UN designates countries as LDCs.  (https://unctad.org/topic/least-developed-countries/recognition) 

That's not true. The US Trade Representative makes the designation subject to the approval of the Trade Policy Staff Committee. Here's an explanation from FAC 2005-69:

Quote

19 U.S.C. 2511(b)(4) allows the President to designate least developed countries as eligible countries under the Trade Agreements Act of 1979, allowing non-discriminatory treatment of the products of such countries in acquisitions subject to the World Trade Organization Government Procurement Agreement. This statutory authority has been delegated to the USTR. The USTR selects the countries for such designation from the United Nations (UN) Least Developed Countries List. USTR consults with other government agencies on trade policy matters through the Trade Policy Review Group (TPRG) and the Trade Policy Staff Committee (TPSC).

The authority to make the designation comes from the TAA. Agree?

Changes to such designations would require changes to the definition (3) of designated country (least developed country) in the clause at FAR 52.225-11, correct?

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