Big A Conference Buy American Act Presentation

Topics: World Trade Organization, International trade, General Agreement on Tariffs and Trade Pages: 5 (769 words) Published: August 13, 2015
The Buy American Act
 Congress passed the Buy American Act (BAA) in 1933 to

encourage purchases of American-made goods by the
Federal Government.

 The act was altered significantly in 1979 when Congress

passed the Trade Agreements Act (TAA).

 The BAA applies to acquisitions over the micro-purchase

threshold of $3,000.

 When it applies, the Buy American Act does not stop a

federal agency from purchasing a foreign product.

Trade Agreements Act
Congress passed the Trade Agreements Act (TAA) in 1979 to meet

certain requirements under the General Agreement on Tariffs and Trade (GATT).

 The TAA gave the President the authority to waive the BAA

requirements for certain procurements and that waiver authority was delegated by the President to the U.S. Trade Representative (USTR).

 The USTR has waived the BAA for eligible products in acquisitions

covered by various trade agreements such as the World Trade
Organization Government Procurement Agreement (WTO GPA,
which includes 39 countries, including, most recently, Taiwan), North American Free Trade Agreement, and the Israeli Trade
Agreement Act, etc.

Clearing up the Terminology
 Definitions
are in FAR 25.003
Confusion

· BAA – “Domestic End Product”
· TAA – “U.S.-made end product” and “Designated Country end product”
· BAA “Exception” vs. “Exemption” from BAA (or “Waiver” of BAA)  BAA – “Domestic End Product”: A "domestic end-product" is one that is (1) an unmanufactured end product mined or produced in the U.S.; or (2) an end product manufactured in the U.S. if it is composed of at least 50 percent U.S.-made component.

 Component is “an article, material, or supply incorporated directly into an end product or construction material”. FAR 25.003.

Details on the Terminology
 TAA – “U.S.-made end product”: an article mined, produced or

manufactured in the US or that is substantially transformed in the US into a new and different article of commerce with a name, character or use distinct from that of the article or articles from which it was transformed. [FAR 25.003]  TAA – “Designated Country end product”: a WTO GPA country end product, an FTA country end product, a least developed country end product, or a Caribbean Basin country end product. Lists of countries for each type are in the Definitions FAR 25.003.

 BAA “Exception” vs. “Exemption” from BAA or “Waiver” of BAA  Applicability of the BAA & TAA: 
· BAA applies to purchases over $3,000
· TAA Thresholds – Under the TAA, the requirements (additional cost evaluation penalty for foreign offers) of the BAA are waived for purchases over specific thresholds. The thresholds are based on type of contract (for supplies, services or construction) and the country of origin.

Exceptions
The exceptions to the BAA are as follows:
 
1) Public Interest as determined by the head of the agency;
2) Nonavailability of domestic sources, as determined by
class or an individual determination by the Contracting
Officer;
3) Unreasonable cost;
4) Commissary resale of the product;
5) Information Technology that is a commercial item.

TAA Exemption

 To fall under a TAA exemption, a supply or service

must originate from a "designated country."
See FAR 25.003, Definitions, for the lists of such

countries.

The Trade Agreements Act classifies three
types of products:
1. U.S.-made end product: an article mined, produced or
manufactured in the US or that is substantially transformed in the US into a new and different article of commerce with a
mane characteristic or use distinct from that of the article or articles from which it was transformed.
2. Designated country end products: WTO GPA country end
product, an FTA country end product, a least developed
country end product or a Caribbean Basin Country End Product (i.e. produced in a country that has signed the GPC).
3. Noneligible products: produced in a country that has not
signed the GPC....
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