• Trade Agreement Act Clause 52.225-5

    Posted on April 13, 2021 by in Allgemein

    Before considering this case, it is important to address some key definitions of the Buy American Act and the Trade Agreements Act of 1979 („TAA“). Under the Far buy American Act for deliveries (FAR 52.225-1), a contractor is required to provide only „domestic finished products“ unless he has identified foreign end products in his Buy American Certificate accompanying his offer or proposal. A „national final product“ is defined as an item manufactured in the United States, in which the cost of its components, extracts, manufactured or manufactured in the United States, exceeds 50% of the cost of all its components. However, if the final product is a commercial item („COTS“), it is not subject to component testing. This means that the only requirement for COTS items is that they are manufactured in the United States, regardless of the source of the components. The TAA waives the Buy American Act to allow the government to purchase products made in certain countries with which the United States has friendly trade relations. THE FAR clauses transposing the TAA (FAR 52.225-5 and 52.225-6) apply to calls and contracts valued at or above USD 182,000. Under these clauses, a contractor may offer „end-of-country products manufactured or designed in the United States“ regardless of buy-american restrictions. A finished „u.S.-made“ product is defined in FAR 52.225-5 as „an item extracted, manufactured or manufactured in the United States or that is essentially processed in the United States into a new and other commercial product, with a name, character or use different from that of the item or item from which it was processed.“ b) Delivery of finished products. The contract agent found that the WTO ACCORD and free trade AGREEMENTs apply to this acquisition.

    Unless otherwise stated, these trade agreements apply to all items in the calendar. Under this contract, the supplier only supplies finished products manufactured or designated in the United States, unless its offer indicates the delivery of other finished products in the „commercial contract certificate“ provision. The government appealed against the COFC`s decision to the Federal Circuit, which was confirmed. The Federal Circuit found that it had an error based on CBP`s determination, but that it had to reconcile its own determination of the country of origin of the product with the requirements of the AAT.