US Trade Agreements Act Compliance Attorneys and Buy American Act (BAA Compliance) Lawyers Helping Government Contractors and Manufacturers Avoid Civil and Criminal Liability for Non-Compliance.  

Buy American Act and Trade agreement act TAA compliance lawyersSelling products or performing construction projects for the US government can be very lucrative. However, you can only benefit to the extent that you a compliant with the Buy American Act requirements(BAA)  or the Trade Agreement Act compliance laws (TAA).

The U.S. Department of Justice (DOJ) has published statistics on False Claims Act (FCA) settlements and judgments for fiscal year (FY) 2023, this was the highest number of settlements and judgments recorded. Of $2.68 billion in FCA settlements and judgments, a substantial amount ($1.8 billion) was attributable to healthcare fraud, trade agreements fraud and Buy American fraud.

Many companies find themselves being reactive to government investigations or defending themselves against criminal charges for either BAA compliance or TAA compliance violations. 

At Watson & Associates, LLC, with offices in Washington DC and in Denver, Colorado,  we provide compliance services to federal government contractors, subcontractors manufacturers, and health care equipment manufacturers, and IT and construction companies who are doing business directly, or indirectly with the federal government.

Federal enforcement agencies have increased the amount of Trade Agreements Act compliance investigations and Buy American Act False Claims Act cases against government contractors and product providers.

Basics From a High Level

The Trade Agreements Act (“TAA”) as stated in Federal Acquisition RegulationFAR 52.225-5 allows the President to waive Buy American Act (“BAA”) requirements for certain goods from designated countries.  If your products are subject to the TAA legal rules, then the BAA general does not apply. 

As mentioned before, construction companies, manufacturers, small businesses, and large DOD defense contractors are under more scrutiny from DOJ and OIG agencies. BAA compliance and Trade Agreements Act compliance investigations have become more common and government contractors and subcontractors/ manufacturers must be prepared to deal with government investigators and federal prosecutors. The contracting officers in many agencies are now paying more attention to this area of procurement.

Get Compliant and Reduce Your Exposure to Civil and Criminal Liability

Many of the clients that call us, are already under federal investigation or have been charged or indicted for violation of BAA compliance or TAA compliance requirements. Due to the obvious increase in Buy American Act investigations by the Department of Justice (DOJ) or Office of Inspector General (OIG), many companies are seeking help becoming either BAA compliant or TAA compliant. We help clients to address their current situations and program the company for future engagement with the federal government 

Reality of What Can Happen 

The domestic preference rules are alive and well. Federal prosecutors have increased their oversight in both areas. Below are real cases.

2023

In 2023 there was an increase in procurement fraud cases, To avoid jail time and the risk of high verdicts, the government settled one of the Department’s largest procurement settlements ever – $377 million. This large U.S. defense contractor, resolved allegations that the company violated the FCA by improperly billing commercial and international costs to its government contracts. 

Virginia tactical gear & equipment company agrees to pay more than $2 million to settle allegations related to Buy American Act: Virginia-based tactical gear and equipment company paid nearly $2.1 million to resolve False Claims Act allegations that it did not comply with the Buy American Act requirements (“BAA”), Trade Agreements Act (“TAA”) and Berry Amendment when selling textile-based products to the Department of Defense.

Colorado Company and Owner Agree to Pay $625,000 for Alleged False Claims Related to Buy American Act Violations. The Department of Justice announced today that Instec Inc. (Instec), located in Boulder, Colorado, and Dr. Zhong Zou, Instec’s owner and president, have agreed to pay $625,000 to resolve allegations that the company and Zou violated the False Claims Act by failing to comply with the requirements of the Buy American Act (BAA) when selling scientific instruments to federal agencies and national laboratories.

Connecticut and New York Companies Agree to Pay Over $900,000 for Providing Chinese-Made Containers to Department of Defense

SoNo International LLC (“SoNo”) and Ark Capital Equipment LLC (“Ark”) have agreed to jointly pay $904,000 to the federal government to resolve allegations that they violated the False Claims Act by supplying the Department of Defense with shipping containers made in China and/or made from Chinese steel.

Get Your Free Buy American Act Compliance Checklist Here

What are the Buy American Act Exceptions?

Under FAR 25.103 When one of the following exceptions applies, the contracting officer may acquire a foreign end product without regard to the restrictions of the Buy American statute:

(a) Public interest. The head of the agency may decide that domestic preference would be inconsistent with the public interest. This exception applies when an agency has an agreement with a foreign government that provides a blanket exception to the Buy American statute.

(b) Nonavailability. The Buy American statute does not apply with respect to articles, materials, or supplies if articles, materials, or supplies of the class or kind to be acquired, either as end items or components, are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of satisfactory quality.

What is a Domestic End Product under Buy American Regulations?

The definition of domestic end product. The Buy American Act includes unmanufactured end products mined or produced in the United States. The statute also defines end products as those manufactured in the United States, provided that

  • the cost of the components mined, produced, or manufactured in the United States exceeds 50% ( or 55%) of the cost of all components, or
  • the end product is a commercially available off-the-shelf (COTS) item.
  • This is an area where contractors face false claims charges (criminal and civil).

How Do You Comply with the Buy American Act? What are the BAA Percentages?

The underlying thought when getting help becoming BAA compliance is to understand the percentages.  Except for an end product that consists wholly or predominantly of iron or steel or a combination of both, the cost of its U.S. and qualifying country components exceeds 60 percent of the cost of all its components, except that the percentage will be 65 percent for items delivered in calendar years 2024 through 2028 and 75 percent for items delivered starting in calendar year 2029.  but see paragraph (d) of this section. This test is applied to end products only and not to individual components. See More On Buy in America Act Frequently Asked Questions.

What are Components under Buy American Act Rules?

A component under BAA regulations  is any “article, material, or supply incorporated directly into an end product or construction material.” See 48 CFR. 25.003.   This is an area where there are numerous disputes during a Buy American Act fraud case or false claims charge.  Be aware that components could potentially be considered as mined, produced, or manufactured in the United States, regardless of their actual place of origin, if

  • the end product in which they are incorporated is manufactured in the United States, and
  • the components are of a class or kind determined by the government not to be mined, produced, or manufactured in the United States

Are You Buy American Compliant? How to Calculate the Cost of Components.

Under Buy American Act compliance regulations cases, the costs of components are generally calculated based on allowable costs incurred by the contractor in purchasing or manufacturing the components. The statutes and cases suggest that

  • for components purchased by the contractor, the cost of components includes the acquisition costs (including transportation costs to the place of incorporation into the end product or construction material), and any applicable duty (regardless of whether a duty-free certificate of entry is issued); and
  • for components manufactured by the contractor, the cost of components includes all costs associated with the manufacture of the component (including transportation, as discussed above), and allocable overhead costs, but excluding profits and any costs associated with the manufacture of the end product.

What is Commercial Off the Shelf Under BAA Regulations?

Commercially available off-the-shelf (COTS) items for purposes of Buy American compliance typically  include any item of supply (including construction material) that is

  • a “commercial item,”
  • sold in substantial quantities in the commercial marketplace; and
  • offered to the government without modification, in the same form in which it is sold in the commercial marketplace.

What is “Manufactured” Under Buy American Regulations?

BAA regulations typically require that your end products at least 50-55% of all components be manufactured in the USA or designated country of origin. Government procurement rules do not conclusively preclude all item processing overseas, so long as certain other requirements are met. These are all complex factual and legal disputes involved during government investigations along with civil and criminal trials.

STRATEGIZE IN THE NEXT 30 DAYS – MINIMIZE CIVIL AND CRIMINAL EXPOSURE OR  JAIL TIME AND START A SOLID DEFENSE IN YOUR CASE – GET THE INFORMATION HERE

What is the Trade Agreements Act? What are TAA Compliance Requirements?

The Trade Agreements Act (TAA) is the regulation and or governing statute that implements numerous multilateral and bilateral international trade agreements and other trade initiatives. The Trade Agreement Act TAA compliance requirements apply to all government contracting GSA Schedule contracts unless the solicitation or awarded contract specifically excludes it. The Trade Agreement Act limits the country of origin for products sold through your GSA Schedule contract, in general, this means the following may be sold:

  1. Articles that are wholly the growth, product, or manufacture of the U.S. or a compliant country, or
  2. Articles that are substantially transformed in the U.S. or a designated country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed.

Remember that it is the responsibility of each GSA Schedule contractor to ensure that product information is accurately incorporated into the contract and displayed on GSA Advantage throughout the life of the contract. It is a good practice to periodically review the country of origin of products offered on your GSA contract, as manufacturers sometimes change their manufacturing points. If you determine that a product country of origin has changed, the following directions can assist you in updating GSA Advantage. See the essential steps to becoming TAA compliant.
For more information about the TAA, refer to clause 52.225-5 Trade Agreements.

How to Become TAA Compliant?

TAA compliance attorneys and lawyersIn order to become TAA compliant, organizations must adhere to certain requirements set forth by the Trade Agreements Act (TAA). The exact steps vary depending on the type of agreement and level of compliance needed. Generally, however, organizations should:

– Ensure that all purchasing complies with the Trade Agreements Act rules and regulations;

– Develop a process for evaluating supplier offers to ensure they meet TAA requirements;

– Train personnel on the specifics of Trade Agreements Act compliance;

– Work with suppliers to verify that their products are eligible for purchase under the Trade Agreements Act;

– Track any documents or forms provided by suppliers related to eligibility; and

– Review contracts to make sure that any foreign products are compliant with the TAA.

. See information about substantial transformation under the TAA and how to ensure your medical products and IT computer product meets Trade Agreement Act requirements.

What is Substantial Transformation Under the Trade Agreements Act?

The Trade American Act TAA requires that foreign end products be substantially transformed in the United States before being sold to the government. Substantial transformation is defined as a significant change in the product’s form, function, or character of an article. Many government contractors do not correctly assess whether their products are substantially transformed.

Watson & Associates, LLC – What We Do

Our Trade Agreement Act compliance lawyers defend manufacturer qui tam lawsuits when whistleblowers allege that the manufactured products do not comply with Trade Agreement Act statutes. The goal is to avoid false claims litigation and leave the company open to exposure to high civil fines and criminal liability and exposure. Our Trade Agreement Acts attorney help you to take immediate steps for Trade Agreements Act compliance. See information about the exceptions to the Trade Agreements Act.

  • TAA BAA compliance assessment of components and manufacturing processes
  • Analysis of complex government procurement systems where multiple players are involved
  • Representation with DOJ and IG investigations
  • Buy American Act bid protests
  • Minimizing civil liability and reducing criminal fines
  • Negotiations
  • Buy American Act fraud defense
  • BAA compliance defense in Buy American False Claims cases
  • Trade Agreement Act compliance internal investigations for compliance
  • GSA TAA Fraud Cases
  • BAA vs TAA compliance requirements – Litigation and appeals

Tips on Becoming TAA Compliant

Avoid Buy American Act Fraud Cases & Trade Agreement Act False Claims Cases

Watson & Associates attorneys help contractors and suppliers defend against False Claims Act fraud cases from the Department of Justice that allege Buy American Act fraud and  U.S. Trade Agreements Act non-compliance. If you are facing fines and criminal charges for products manufactured in China or other prohibited countries, give our federal defense law firm a call for immediate representation and defense.

BAA & TAA Compliance Legal Support in All States

Nationwide Buy American Act  Compliance Attorneys : Our government contracting BAA compliance lawyers provide legal counsel to federal contractors throughout the United States and overseas including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming, and Virgin Islands. Call our Buy American Act compliance lawyers today for immediate help becoming BAA compliant. 1-866-601-5518.

Call Watson’s Buy American Act Lawyers and  TAA Trade Agreements Act Compliance Attorneys

Get Immediate Help:If you want to minimize or avoid false claims act fines, civil and criminal liability. As a government contractor, our Buy American Act compliance lawyers and government compliance attorneys can provide immediate legal advice. Representation if you are facing a TAA vs BAA investigation, high-profile case or some other problem.

If you are an overseas manufacturer, IT or medical products and equipment  manufacturer, or somehow are involved in components for end products for federal government contracts, contact Watson & Associates BAA compliant law firm and TAA Trade Agreement Act compliance lawyers at 1.866.601.5518 for immediate help.