November 9, 2015

Telecommunications Firm to Pay Us $1 Million to Settle Alleged Violations of the Trade Agreements Act

The TAA is implemented through mandatory contract clauses in government contracts over the threshold amount and country of origin representations and certifications made by companies responding to a federal contract solicitation, as prescribed by the Federal Acquisition Regulation Part 25.4 and FAR 52.225-3 through 52.225-6. A product’s country of origin must be disclosed when it is manufactured in a nondesignated country.

Telecommunications Firm to Pay Us $1 Million to Settle
Alleged Violations of the Trade Agreements Act

PRESS RELEASE FROM THE DEPARTMENT OF JUSTICE
ADC Telecommunications Inc. will pay the United States $1 million to resolve allegations that the company submitted false claims to federal agencies when it sold telecommunications goods manufactured in countries prohibited by the Trade Agreements Act (TAA).

From October 2005 through December 2008, ADC manufactured and sold telecommunications hardware, such as communication modems, extender modules and shelf adapters to various federal agencies through its General Services Administration (GSA) Multiple Award Schedule contract. This settlement resolves allegations disclosed by the company that it knowingly manufactured and sold products from countries such as China that do not have reciprocal trade agreements with the United States and are not on the list of designated countries. The client government agencies included a number of federal agencies, including the Departments of Defense, Homeland Security and Interior.

Compliance with the TAA is required by GSA Multiple Award Schedule contracts. Goods purchased under these contracts must be manufactured in one of a list of designated countries deemed to trade fairly with the United States.

“Protecting the federal procurement process is central to the mission of the Department of Justice,” said Stuart Delery, Acting Assistant Attorney General for the Department of Justice’s Civil Division. “It is incumbent upon contractors that supply products to federal agencies to abide by the legal requirements designed to protect U.S. trade interests.”

“This settlement demonstrates this office’s commitment to ensure that products sold to the government are made in countries that respect and adhere to our nation’s trade policies,” said Ronald C. Machen Jr., the U.S. Attorney for the District of Columbia. “We expect all companies who do business with the United States to understand and comply with the laws that govern their transactions.”

GSA Inspector General Brian Miller stated “We appreciate ADC’s cooperation in the OIG’s investigation of this matter.”

This matter was jointly handled by the GSA Office of the Inspector General, the Justice Department’s Civil Division and the U.S. Attorney’s Office for the District of Columbia.

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