Buy American Act Requirements
Buy American Act Compliance (BAA) Lawyers & 41 USC 10a Consultants
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When questions arise about meeting the Buy American Act requirements (BAA) or meeting the “made in the USA” American government contractors frequently retain Watson & Associates, LLC when there is a bid protest or simply being proactive. Our Buy American law lawyers and consultants absorb the fine details of each case and perform our due diligence. Companies are finding themselves subject to DCMA investigations and audits for not meeting the Buy American standard.
An adverse result can cost a company huge fines or even jail time. Our clients appreciate our attention to detail and our straight talk approach to Buy American statutory issues.
Buy American Act Legal and Consulting Services
We help by:
- Providing overall legal opinions as to the level of being TAA compliance or meeting the made in the USA requirement under the Buy American Act;
- Maintaining compliance with Buy American Provisions
- FAR and DFARS regulatory and compliance consulting
- Representing American government contractors in COFC bid protest and GAO bid protests;
- Developing Buy American Act requirements checklists and policies.
- Helping companies with import export compliance concerns
To be able to help you assess whether your situation complies with the Buy American Act, our attorneys require details about the end product’s manufacturing process and break down and percentage of manufacturing. We also apply the test for TAA countries of origin as well as considering each of the products components and parts when it comes to international trade.
(Partial waiver for domestic components test) the Buy American Act (“BAA”)(41 U.S.C. §10a and 10b).
- This BAA waiver would allow a commercial off the shelf (COTS) item to be treated as a domestic end product if manufactured in the United States without requiring the vendor or manufacturer to track the various Buy American countries of origin of the various components or materials of the delivered COTS end-product.
What is the Buy American Act 1933 (BAA) FAR Part 25, 10 USC 10a-10d and 41 USC 8301? The Buy American provision (“BAA”) governed under 41 USC 10a- 10d and 41 USC 8301–8305) was passed by Congress in 1933. The BAA Statute essentially develops a preference for American made products. This preference is especially important in federal procurement because of taxpayer spending.
Similar, and offer confused with the Buy American Act is the Buy America Statute, implemented in 1983. The Act comes under the Surface Transportation Act of 1982 ( 49 USC 5323(j)). It applies to mass-transit-related procurements valued over $100,000 and funded at least in part by federal grants
Waiver allowed. Under procurement regulations, the Contracting Officer can waive Buy American certification requirements for end products if the domestic product is 25% or more expensive than an identical foreign-sourced product, if the product is not available domestically in sufficient quantity or quality, or if doing so is in the public interest.
GAO and COFC FAR Buy American Act Bid Protests: As a government contractor, you may find yourself being subject to a bid protest at the GAO or U.S. Court of Federal Claims. Whether you are the protestor or intervenor, making sure that you comply with the harsh bid protest rules is essential to your success.
At Watson & Associates, each attorney helps clients facing allegations of statutory noncompliance in a bid protest. We help our clients to navigate through the facts while still complying with bid protest regulations. When clients need assistance with Free Trade Agreements Act and International Trade regulations, our TAA attorneys can help.
What FAR Requirement Clauses Should You Look For in RFP ?
One mistake that government contractors make when bidding on projects is to assume that since the RFP does not include FAR clause 52.225-1 that addresses Buy American Act requirement for supplies, they should still look to see if the RFP includes FAR Part 25, DFARS clause 252.225-7001 by reference. This FAR clause expressly states that it “implements 41 USC 83, which asks contractors to deliver only domestic end products, unless they certify that they are delivering other end products. Government contracting officers tend to use DFARS clause 252.225-7001, instead of FAR clause 52.252-1. DFARS 225.1101(2)(i).
BBA statutory exceptions are allowed for the following cases:
- If the head of the government agency makes a determination that compliance would be “inconsistent with the public interest”
- Where iron or steel products are not produced in the United States in sufficient and available quantities
- Inclusion of USA products would increase overall project cost by 25 percent
Buy American Act Penalties in Government Contracting
A federal construction contractor that violates the BAA can face harsh violations penalties that can include downward adjustments in contract price or even a termination for default.
Government contracts may also be liable under the False Claims Act. Since companies have to submit a certificate of compliance with the Buy American Act, any violation can lead to noncompliance for any invoiced work that was not in compliance.
The BAA statute also allows the federal government to initiate suspension and debarment actions against those companies that fail to comply.
FAR 25 Price Adjustment
The Buy American Act allows for a price preference for buying domestic end products over foreign end products. Only for proposal evaluation reasons, the contracting agency adds a specified percentage premium to the price of foreign end products if there is an offer of a domestic end product that is not otherwise lowest-priced.
In civilian government contracting agencies, the Buy American Act price adjustment is either 6 or 12 percent. For DOD government procurements, the price adjustment is 50 percent. See DFARS 225.105.
If the proposed price of the domestic offer stays remains higher than the price of the foreign offer after applying the evaluation preference, the price of the domestic offer will be determined to be unreasonably high. The contract would then be awarded to the foreign offer. See FAR 25.103(c), FAR 25.105(c); DFARS 225.103(c), 225.502(c)(ii)(E)(2).
Buy American Provisions of Recovery Act: This provision has a different application than the Buy American Act. The Act, (41 USC 10a-10d), applies to procurements of supplies and construction materials for the federal government. The BAA is also provided for under Federal Acquisition Regulation (FAR 25.)
41 USC 10a 10d BAA Provisions and Standard Exemptions
Under 41 USC 10a and 10d, one exemption to the Buy American provisions is price reasonableness. If an American made product cost substantially more that a foreign product, the contracting officer can use the price reasonableness exemption to purchase the foreign made product.
Made in the United States? FAR Assessment: When companies assess whether they meet the FAR American made legal requirements, they should look at the end product that is bought by the Government. To see whether products are made in the United States, contractors should look at the definition of components and what are parts of the end product, cost associated with the end product. Under FAR 52.225-1 and FAR 52.225-9, government contractors should be mindful of the penalties for violating the BAA. This is where Watson & Associates’ BAA attorneys can help.
What is the American Made Definition?
To assess the definition of the “American made” the Buy American Standard and Compliance regulations undergo a two-part test:
- The end-product must be U.S.manufactured, and
- More than 50 percent of all component parts cost parts must also be made in the USA and U.S. manufactured.
If you meet the “American made” basic test, then the government can consider your items should be considered American made products under the statute.
Buy American Provisions
(a) In general
Notwithstanding any other provision of law, and unless the head of the department or independent establishment concerned shall determine it to be inconsistent with the public interest, or the cost to be unreasonable, only such unmanufactured articles, materials, and supplies as have been mined or produced in the United States, and only such manufactured articles, materials, and supplies as have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured, as the case may be, in the United States, shall be acquired for public use.
This section shall not apply with respect to articles, materials, or supplies for use outside the United States, or if articles, materials, or supplies of the class or kind to be used or the articles, materials, or supplies from which they are manufactured are not mined, produced, or manufactured, as the case may be, in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality. This section shall not apply to manufactured articles, materials, or supplies procured under any contract the award value of which is less than or equal to the micro-purchase threshold under section 428 of this title.
Contact our Buy American Act Law Attorneys & Consultants
For immediate help from one of our Buy American Act compliance lawyers for bid protest litigation, or FAR 25 compliance consulting under BAA and Trade Agreements Act, Call Watson & Associates, LLC at 1-866-601-5518.