WHAT CONTRACTORS NEED TO KNOW AS FOCUS ON “BUY AMERICA” GROWS
President Biden indicated in his recent State of the Union speech that his administration will expand Buy America/Build America (BABA) requirements for iron and steel to other products used in infrastructure projects. Contractors that do not work on such projects, however, should be on guard. Anytime an issue like the Buy American Act (BAA) receives considerable political attention there is the definite potential for provisions to be misapplied in attempts to show support for the overall objective. This is especially true for contracts covered by the Trade Agreements Act (TAA), an act that applies to most multiple award Indefinite Delivery Indefinite Quantity (IDIQ) contracts. Few political leaders know that there is a Trade Agreements Act, and fewer still know what it says. Contractors must be prepared to work with agency contracting officials who may have been told by leadership to follow BAA rules even when TAA clearly controls a contract. A review of the basics may help. First, for non-construction contracts, the Buy American Act only applies to open-market purchases up to $183,000. This level is set every other year by the US Trade Representatives office. The current level will stay in place until the end of calendar year 2023. Open market purchases are acquisitions that are not made against a standing contract, such as multiple award IDIQ. Second, the Trade Agreements Act applies for all non-construction open market purchases above $183,000, again through the end of the 2023 calendar year. Third, the TAA applies to all purchases made through GSA Schedule contracts, most other GSA IDIQ’s, the NASA SEWP contract, and similar vehicles. Fourth, if the TAA applies to an acquisition, the BAA usually does not. The only consistent exception is in the case of Schedule buys when a company quotes open market items up to the $183,000 BAA threshold. Open market items up to that dollar amount are covered by BAA, regardless of whether those items are being purchased in a package with Schedule items. Stories of agency contracting officials attempting to add BAA requirements to TAA-covered purchase orders are legion. Companies should always attempt to remove extraneous clauses, whether BAA or something else. There is already plenty with which companies need to comply and no company should get in trouble for failing to comply with a contract clause that should not have been added to a task order. The best defense for contractors is a good offense. Be prepared with a one-page overview of how the BAA and TAA work, using applicable FAR sites if necessary.