You may remember in 2006 when GSA auditors discovered that OfficeMax, Staples, and Office Depot listed products that were manufactured in prohibited countries on their GSA contract. The net result was a fine of $22 million for all three vendors. When contracting with the Federal Government you must ensure your products are compliant with the Trade Agreements Act (TAA). GSA has appointed Industrial Operations Analysts (IOA) to stop these TAA violations even for small business vendors.
So how would you respond to an auditor if asked these questions: Do you know where your products are manufactured? Are any of your products composed of pieces from different countries? Do your products have parts made in non-compliant countries that are assembled in a compliant country?
The answer will be based on where the product was “substantially transformed into a new and different article of commerce with a name, a character or a use different from that of the article or articles from which it was transformed.” For more clarification go to FAR 25. If the country is one of the compliant countries, then you may be okay. But it is the vendor’s responsibility to understand the TAA and to determine the country of origin of those products. For acceptable countries, the list can be found in FAR Part 25 or at this site: http://www.arnet.gov/far/current/html/52_223_226.html#wp1169151. We suggest you examine all lists of acceptable countries to include, Designated Countries, Free Trade Agreement Countries, Least Developed Countries, or Caribbean Basin Countries so you know if your products are compliant with the TAA. And as changes occur, make sure you have the most current version. But there are exceptions worth noting for small business set-asides and sole source acquisitions listed in FAR 25.401.
When a vendor completes the On-line Representations and Certifications Applications (ORCA) that asks them, “Are any end products delivered to the Government by Foreign (non-domestic) end products?” The vendor must answer yes or no or provide information with specific offers to the Government. If they answer ‘yes’, they are to list those products and their corresponding country of origin. When signing a contract, the vendor will be required to complete a Trade Agreements Certificate as prescribed in Far 25.1101 for “the offeror to certify that each end product, except those listed in paragraph (b) of this provision, is a U.S.-made or designated country end product, as defined in the clause of this solicitation entitled “Trade Agreements” and “(b) The offeror shall list as other end products those supplies that are not U.S.-made or designated country end products.” If there is no exception on the certificate, the products must conform to the certificate.