HELP - Can you explain this? WTO Agreement on Government Procurement and the Buy American Act

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Permalink Reply by Stephen Peteritas on November 12, 2010 at 10:00am

I can't but I featured both discussions so hopeful that means this will find it's way in front of some eyes who can do the explaining.

Permalink Reply by I.J on November 13, 2010 at 10:08am

Hi Candace,

Please see FAR 25.402 and FAR 25.403. These should help clarify.

FAR 25.402 General.
(a)(1) The Trade Agreements Act (19 U.S.C. 2501, et seq.) provides the authority for the President to waive the Buy American Act and other discriminatory provisions for eligible products from countries that have signed an international trade agreement with the United States, or that meet certain other criteria, such as being a least developed country. The President has delegated this waiver authority to the U.S. Trade Representative. In acquisitions covered by the WTO GPA, Free Trade Agreements, or the Israeli Trade Act, the USTR has waived the Buy American Act and other discriminatory provisions for eligible products. Offers of eligible products receive equal consideration with domestic offers.
(2) The contracting officer shall determine the origin of services by the country in which the firm providing the services is established. See Subpart 25.5 for evaluation procedures for supply contracts covered by trade agreements.

It continues on to FAR 25.402(b)

FAR 25.403 World Trade Organization Government Procurement Agreement and Free Trade Agreements.
(a) Eligible products from WTO GPA and FTA countries are entitled to the nondiscriminatory treatment specified in 25.402(a)(1). The WTO GPA and FTAs specify procurement procedures designed to ensure fairness (see 25.408).
(b) Thresholds.
(1) To determine whether the acquisition of products by lease, rental, or lease-purchase contract (including lease-to-ownership, or lease-with-option-to purchase) is covered by the WTO GPA or an FTA, calculate the estimated acquisition value as follows:
(i) If a fixed-term contract of 12 months or less is contemplated, use the total estimated value of the acquisition.
(ii) If a fixed-term contract of more than 12 months is contemplated, use the total estimated value of the acquisition plus the estimated residual value of the leased equipment at the conclusion of the contemplated term of the contract.
(iii) If an indefinite-term contract is contemplated, use the estimated monthly payment multiplied by the total number of months that ordering would be possible under the proposed contract, i.e., the initial ordering period plus any optional ordering periods.
(iv) If there is any doubt as to the contemplated term of the contract, use the estimated monthly payment multiplied by 48.
(2) The estimated value includes the value of all options.
(3) If, in any 12-month period, recurring or multiple awards for the same type of product or products are anticipated, use the total estimated value of these projected awards to determine whether the WTO GPA or an FTA applies. Do not divide any acquisition with the intent of reducing the estimated value of the acquisition below the dollar threshold of the WTO GPA or an FTA.
(c) Purchase restriction.
(1) Under the Trade Agreements Act (19 U.S.C. 2512), in acquisitions covered by the WTO GPA, acquire only U.S.-made or designated country end products or U.S. or designated country services, unless offers for such end products or services are either not received or are insufficient to fulfill the requirements. This purchase restriction does not apply below the WTO GPA threshold for supplies and services, even if the acquisition is covered by an FTA.
(2) This restriction does not apply to purchases of supplies by the Department of Defense from a country with which it has entered into a reciprocal agreement, as provided in departmental regulations.

Permalink Reply by Jaime Gracia on November 13, 2010 at 10:30am

It looks like the FAR previsions I.J. mentions seem to be the best answer, as ARRA provisions can be waived if they interfere with WTO GPA. I also found some explanations from our friends up north in Canada explaining ARRA and doing business with U.S.

http://www.canadainternational.gc.ca/sell2usgov-vendreaugouvusa/pro...

Permalink Reply by Candace Riddle on November 13, 2010 at 11:19am

Thank you Jamie and I.J. - The Canadians had the state/ local info I was looking for.

"Buy American can still apply in many cases because the ARRA bill was drafted so that stimulus money was allocated to the federal agencies and departments, who then grant the money to state and municipal projects. When states and municipalities are the procuring entities, most U.S. international trade obligations do not apply.
There are 37 states of which are signatories to the WTO GPA and therefore have free trade obligations at the state level to foreign signatories of the WTO GPA. As a recent signatory at the sub-federal level, Canada will have open access to procurement in these 37 states and is therefore exempt from Buy American provisions at the state level."

Bingo!