September 12, 2016

Important update for TAA enforcement for all government contractors

Under direction from GSA’s Central Office, the Southwest Supply and Acquisition Center (SSAC) has issued a revised TAA letter to contractors reversing the deadlines and threatened contract cancellation from its previous letter. The new, more reasonable approach requests that contractors conduct an internal review on all products and then delete non-compliant items and correct any erroneous country of origin information in GSA Advantage.

A similar notice was issued today to contractors holding Furniture Schedules, which gives them 30 days to complete the review and make any necessary modifications. No additional documentation or express certification of compliance is required at this time.

Despite the softened approach, the Trade Agreements Act continues to be a critical compliance and liability area for federal contractors, especially in light of the recent publicity in this area. GSA staff has told us that they anticipate significant activity from GSA’s Office of Inspector General in this area. To the best of our knowledge, a similar letter will go out to all multiple award schedule holders shortly.

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UPDATE, May 13, 2016: GSA’s public relations issue just got a lot worse. ABC News is now reporting on the GSA Advantage “Made in America” misrepresentations and how it is costing American jobs. Expect enforcement of TAA compliance to accelerate in light of all the negative press.

Contractors selling products on GSA Schedules need to be aware of a new, highly time-sensitive GSA initiative to verify compliance with the Trade Agreements Act (TAA). The TAA requires GSA contractors to only deliver products wholly manufactured or substantially transformed in the United States or other designated countries. FAR 52.225-5, Trade Agreements, defines substantial transformation as the process of changing an article “[consisting] wholly or in part of materials from another country…into a new and different article of commerce, with a name, character, or use distinct from the original article”.

In early May 2016, GSA sent draft letters on Trade Agreements Act (TAA) certifications to Multiple Award Schedule (MAS) contract holders with products contracts managed through GSA’s Southwest Supply and Acquisition Center (SSAC). The draft, linked here, will require contractors to:

Submit a spreadsheet certifying the Country of Origin (COO) for all contract products on an individual line basis,
Provide a Certificate of Origin or certification from the manufacturer verifying that all products represented as manufactured in the US or a designated country are TAA-compliant, AND
Provide a Quality Assurance Plan describing the contractor’s compliance program (This requirement does not appear on the final letter)

The draft lists a deadline as five (5) business days from receipt of the letter to respond. GSA told us that it would consider establishing a staggered schedule of review for contractors with multiple suppliers and many products, but this flexibility could vary with each contracting officer’s discretion. GSA reserves the right to remove the entire Advantage! catalog of contractors who are not responsive.

This GSA enforcement action stems from an investigation by Truth in Advertising and a complaint from a constituent Schedule 73 flatware manufacturer through Senator Charles Schumer (D-NY). While GSA Schedule contracts have always required only TAA-compliant products be listed, this is a first for GSA’s enforcing this requirement in such a comprehensive, time-sensitive manner.

Aronson Fed Point:

Original Source:

Buy American Act, False Claims Act, Qui Tam, Regulatory Compliance Bureau, Trade Agreements Act (TAA) , , ,
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