On December 30, 2021, the FAR Council issued a final rule to update the trade agreements thresholds implemented under the Trade Agreements Act (“TAA”).  The new thresholds take effect January 1, 2022.

The TAA thresholds are adjusted every two years and set the value a contract must meet or exceed in order for the World Trade Organization Government Procurement Agreement (“WTO GPA”) and free trade agreements (“FTAs”) to apply.  For supply, service, and construction contracts that meet or exceed the stated thresholds, Buy American Act (“BAA”) requirements are waived in accordance with the TAA, and the Government is required to treat eligible products and services from designated countries on an equal basis as domestic products and services.

The updated thresholds, to be listed in FAR 25.402(b), are provided below.

Continue Reading New Trade Agreements Act Thresholds Take Effect January 1, 2022

The government is moving forward with further changes to Buy American Act (“BAA”) regulations.  But based on yesterday’s public meeting to discuss the July 30 notice of proposed rulemaking (“NPRM”) to revise existing BAA regulations, it remains to be seen exactly where those changes are headed.

As discussed in our prior client alert, the NPRM implements Executive Order 14005 (“Ensuring the Future Is Made in All of America by All of America’s Workers”) by proposing three major changes to existing BAA regulations: (1) higher domestic content thresholds; (2) enhanced price preferences for “critical” items and components; and (3) new domestic content reporting requirements for “critical” items and components.  The agenda for the public meeting covered each of these changes, as well as other questions raised in the NPRM related to BAA waivers and exceptions.

Continue Reading Buy American Act Update: FAR Council Holds Public Meeting on New Proposed Rule

The American Rescue Plan, signed into law last month, includes $1.9 trillion in economic stimulus, healthcare, and related funding.  And just last week the Biden administration released an infrastructure proposal, the American Jobs Plan, that includes $2.3 trillion in transportation, connectivity, power, and other critical infrastructure investments.

Contractors are right to view these plans as massive opportunities — but should be cognizant of the regulatory strings that often attach to government spending.  In general, these can include Federal Acquisition Regulation (FAR) and agency-specific FAR supplements for federal procurements, as well as the nonprocurement uniform requirements (2 C.F.R. Part 200) and related agency-specific regulations that attach to Federal grant funds even when disbursed by state or local entities.

Now, some Congressional members are seeking to add new restrictions that would significantly overhaul the existing domestic preference regime for Federal procurements — mere weeks after the promulgation of new Buy American regulations and the release of a new Executive Order to further tighten the application of these rules.

Continue Reading U.S. Senators Propose Trade-Pact Waivers Amidst Focus on Domestic Preference Laws

A long-standing dispute over the approach to country of origin determinations under the Trade Agreements Act (“TAA”) may soon be resolved, as the Federal Circuit recently heard oral argument in one of two cases presently examining key aspects of this statute.  Among other questions presented, the court may decide the standard for determining whether a product may be considered a U.S.-made end product — a question that could have far reaching implications for product manufacturers across all industries.

Continue Reading How Much Is Enough? Federal Circuit Appeal May Decide Level of U.S. Manufacturing Required Under the TAA

Last month, GAO released a report analyzing federal agency implementation of the Buy American Act (“BAA”), 41 U.S.C. §§ 8301-8305.  As we have previously reported, BAA enforcement is an area of focus for the Trump Administration, which has repeatedly emphasized the need to “Buy American and Hire American,” including in an April 2017 executive order.  And for government contractors, compliance with the BAA and other domestic sourcing regimes also has been an increasingly common subject of litigation, particularly under the civil False Claims Act, as we have detailed in this space.

In keeping with this Buy American focus, GAO was commissioned to report on (A) the extent to which federal agencies procure non-domestic end products through the use of BAA exceptions and waivers, and (B) the ways in which the government’s largest buyers provide training and guidance to implement BAA requirements.  Although GAO found that only a relatively small percentage of goods purchased were foreign end products, GAO also found that this number could have been misstated due to reporting errors and system limitations.  Moreover, GAO found that the level of BAA training varied significantly among the agencies it canvassed.  GAO’s findings, which are discussed in greater detail below, offer a window into the government’s view of its own compliance with the BAA’s complex and often confusing regulatory scheme.

Continue Reading GAO Report Shows That Agencies Buy Only A Small Percentage of Non-American Goods, But Buy American Act Implementation Remains A Challenge

(This article was originally published in Law360 and has been modified for this blog.)

The Government Accountability Office (GAO) recently issued a bid protest decision regarding the application of the Berry Amendment’s domestic sourcing requirement to a U.S. Department of Defense (DOD) solicitation for leather combat gloves with touchscreen capability.  In that decision, the GAO found that the nonavailability exception to the Berry Amendment applied to the glove’s kidskin leather even though the agency determined, through market research, that this type of leather was available domestically.  Importantly, this decision provides an opportunity for stakeholders to consider the nuances associated with the Berry Amendment’s nonavailability exception and to reflect upon the complex regulatory landscape of domestic sourcing requirements.

Continue Reading Domestic Sourcing Requirement Doesn’t Fit DOD’s Gloves

Last month, the Government Accountability Office (GAO) issued a bid protest decision regarding the application of Buy American Act (BAA) requirements to a solicitation for construction.  In this decision, GAO rejected the agency’s determination that an offeror’s bid was nonresponsive because the offeror failed to provide certain required information for the evaluation of a potential BAA exception.  A summary of the decision and our takeaways are below.

Continue Reading Pragmatism Wins the Day in GAO Buy American Protest

Last year, we wrote about a trial court’s decision to dismiss a False Claims Act (“FCA”) complaint regarding alleged Trade Agreements Act (“TAA”) non-compliances because the relator failed to plead fraud with “particularity” under Rule 9(b).  That decision offered a sweeping rebuke of speculative FCA claims, and emphasized why it can be difficult to present a valid FCA claim based on a potential violation of a complex regulatory scheme like the TAA.

Last month, the United States Court of Appeals for the Seventh Circuit unanimously affirmed that decision in United States ex rel. Berkowitz v. Automation Aids, Inc., — F.3d — , 2018 WL 3567836 (7th Cir. July 25, 2018).  In doing so, the Seventh Circuit provided additional guidance about various topics, including the Rule 9(b) standard for implied certifications and the power of the materiality defense.  Our takeaways are below.
Continue Reading Alleged Sales of Non-TAA-Compliant Products Under GSA Schedule Contracts Are Not False Claims, 7th Circuit Holds

Due to the government’s increased focus on domestic preference requirements – for example, through President Trump’s formal policy and action plan for agencies to “scrupulously monitor, enforce, and comply” with the so-called “Buy American Laws,” and Congress’s proposed legislation to make certain Buy American requirements more robust – contractors should not be surprised if there

[A modified version of this blog post was published in Law360.]

Last month, Senators Dan Sullivan (R-AK) and Maria Cantwell (D-WA) introduced legislation to “improve the requirement to purchase domestic commodities or products” under the National School Lunch Program (the “NSLP”) and the School Breakfast Program (the “SPB”).  Even if this legislation fails to make it out of Committee, it signals a continued trend to strengthen the “Buy American” requirement under these programs.

Continue Reading Bipartisan Legislation Aims To Strengthen “Buy American” Requirement Under National School Lunch Program