Delving Into Public Sector MythBusters #2: GSA Only purchases products made in the US
Updated: Sep 1, 2022
While I was at NeoCon, I had the privilege to speak with many new contacts. I heard a lot of myths regarding selling to Federal. On one hand, this is always heartbreaking to me. On the other hand, considering this series, it provided me with a lot of content we can explore together! My walk of the show was very limited and honestly not well planned after seeing the manufacturers I knew. I literally grabbed a friend, and we walked the 3rd floor, 10th floor, and 11th floor and stopped anywhere that looked interesting. This led us into a lot of great showrooms of companies we have never heard of before and a lot of products that were made outside of the US. Which leads us to the myth for this issue: GSA only buys products made in the US.
Before we can 100% dive into this myth, I feel the need to dig into 3 specific government terms (which of course have acronyms!!!)
Trade Agreements Act (TAA): “The Trade Agreements Act (TAA) of 1979 was enacted to foster fair and open international trade. Under TAA, the products and/or services offered on your GSA Schedule contract are required to be only U.S. made or TAA designated country end products.” A product that meets TAA is produced or substantially transformed in what GSA refers to as “Designated Countries.” GSA’s site details TAA and also links to a TAA Compliant Countries Listing https://gsaschedule.com/reporting-compliance/trade-agreements-act/
Buy American Act (BAA): Originally created in 1933, we have heard this more and more in the past 6 years as both President Trump and President Biden have announced executive orders to increase the government spending with US companies. A general overview of what constitutes products that meet BAA are that they are Made in the US and 55%+ (this percentage is something that will be increasing) of the cost of components are made in the US.
Buy America Act: This applies to purchases by the government of iron and steel and specifically applies to infrastructure and not furniture.
Now that we are all on the same page with TAA and BAA, let’s dig into the myth that “GSA only buys products made in the US.” I am not a lawyer, but I will present the information as best as I can based on the recent discussions I have had and calls I have been on. If you have specific questions, I recommend a good GSA lawyer or contract administration consultant to work with.
When a federal agency is buying on GSA contract, the TAA trumps the BAA because TAA is part of the Federal Acquisition Regulation (FAR) and is legislation, which supersedes an executive order. This does not mean that a Contracting Officer (CO) will not check the box for BAA, but legally TAA is what applies. Which means any products that meet the TAA requirements- again 120+/- countries- can be presented as a part of the solution to meet the RFP specifications. This does not mean the CO will not enforce BAA for the bid response and then it is up to you whether you: 1. Want to respond or 2. Want to protest it after the award.
I do not have exact numbers, but everyone I asked agrees that about 60% of furniture is bought on GSA contract leaving about 40% to be purchased open market, below the micro-purchase threshold, as a set aside, by a GC, etc. So, how does TAA and BAA work in those purchases? If the CO states that BAA applies, then it most definitely does. My recommendation would be to ask the CO if they would consider TAA products in the response and if they would give it any consideration if it was substantially less than other bids. If you do not ask, you can respond with TAA products and let the CO know that this is the solution you've chosen - you could actually win if the TAA products are substantially less than the BAA products, but you could also be wasting your time responding to the RFP so you need to evaluate if it is worth your time.
With all of the talk in the media about Buy American and creating jobs in the US I can definitely see why someone may think that GSA only buys products made in the US, but this is absolutely false.
If you have something you hear often that you know is a myth and you want me to explore the topic or maybe you have something you’ve heard and you’re not sure if it is a myth or not, please reach out and we can explore it together in an upcoming article.