The Whay Law Firm, Government Contract Attorneys Explain How The Buy American Act Affects your Pennsylvania Government Contract Bid Proposal
Learn More About TAA & BAA Compliance
The Whay Law Firm assists businesses in determining product compliancy with the Buy American Act. Although the law may appear straightforward, it is actually complex and nuanced, especially when you are working on Pennsylvania state and local levels. Violating the law, intentionally or not, may cause significant financial loss to prime contractors and/or sub-contractors on a U.S. government contract, or state and local contracts. The safest path to compliance is to engage Whay Law Firm’s government contract experts for a product-specific compliancy determination.
Following is a brief overview of the Buy American Act (BAA) and how it affects Pennsylvania contractors. Although the law and supporting process are complicated, the Whay Law Firm has extensive expertise in compliance determinations. Understanding the product manufacturing process is central to determining compliance, but for general understanding, we’ve outlined the basics, along with some exceptions below.
What is the Buy American Act?
The BAA (41 U.S.C. § 10a et seq.) was passed during the Great Depression at the end of Herbert Hoover’s presidency. The law represents a preference for materials being procured by the U.S. government for public use to be made within the United States. Similarly, third-party purchases must also comply with the law. An example of a third-party transaction is when a contractor purchases materials for a highway and other government-funded transit programs. Frequently, when funds appropriated by or otherwise made available by Congress are utilized, the BAA is in force. There are exceptions. For example:
- Trade Agreements Act
- Price Reasonableness
- Department of Defense
The Trade Agreements Act (TAA) is the codification of the World Trade Organization Government Procurement Agreement and is implemented at FAR 52.225-5. With it, the President can waive BAA requirements for certain goods from designated countries. As long as the procurement provides U.S.-made or products from designated countries, BAA requirements are satisfied.
Price reasonableness is considered if a product made in the U.S. is more expensive than a similar product made elsewhere. In some cases, the government agency may purchase the foreign product. To evaluate compliance when procurement is subject to the BAA and the lowest price is that of a foreign made product, the contracting officer adds 6% or 12% to the price of the foreign product.
The Department of Defense (DoD) has significantly different requirements from any civilian agency. DoD procurements subject to the BAA require that 50% of the component costs of end products be from the United States or a Qualifying Country.
If you are bidding on a contract with the State of Pennsylvania government or your local town government, state and town government agencies may impose additional Buy American Act regulations with which you must comply. Be confident you are meeting with all BAA requirements imposed by the federal government, PA government, and any local town requirements. The Whay Law Firm’s government bid attorneys will assist you with understanding the implications of the Buy American Act on your government contract bid and help you to determine which requirements apply to your state or local government contract to make sure that you are not over-certifying for requirements that are not cited in the RFP.
Don’t Risk BAA Violation and Penalties – Contact Our Pennsylvania Government Bid Attorneys
Do you know all the requirements of the state or local contract on which you are bidding? If federal government funds are being used, you may need to ensure you are complying with BAA. Call the Whay Law Firm before you submit your government contract bid. We will review the contract and your product manufacturing process to make a Buy American Act compliance determination.
