How and Why to assure TAA Compliance with your GSA Contract

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When it comes to GSA contracts, there are many important elements that you need to consider before you apply for these government contracts. Following these government rules allows you to take advantage of the large government market and can help grow your businesses. One of the important rules that you need to follow is the Trade Agreement Act (TAA). TAA compliance can go a long way in making sure that your GSA contract goes smoothly, and you can take advantage of the large government market. Failure to stay TAA compliant can have serious consequences for your businesses. 

TAA Compliance

The Trade Agreements Act is an attempt by the United States government to enable fair and honest international trade. The TAA requires that the United States Government can only get products from countries that are apart of this act. Since the GSA is a part of the United States Government, they can only get U.S. made products or products that are TAA compliant. The only agency that has the potential to not work with TAA companies is the VA and only for goods that are required to save lives.

 

This can make it harder for companies because a large percentage of Asia and South America are not a part of the TAA, which limits the suppliers and the companies that can sell goods through GSA contract companies and to the United States Government. It is important to note that the country where the product is put together is a part of the TAA. There is also no cost associated when it comes to TAA compliance.

 

The TAA requires that at least 50 percent of the product’s overall manufacturing cost is from the United States or another country that is a part of the TAA. This means that not all of the parts or the whole thing is assembled in a TAA country, but you need to make sure that you are staying under the 50 percent threshold. It’s an important distinguishing factor for companies that have their product made in multiple countries. This will help to ensure that you are staying compliant with the TAA.

TAA Compliance and Your GSA Contract

There are several things that your company can do to make sure that you remain TAA compliant. The first way to make sure that you are staying TAA compliant is to work with manufacturers who have a good reputation and can show documentation that they are compliant with the TAA. This can go a long way in making sure that you are staying TAA compliant because working with manufacturers who do not have a good reputation can make it harder for you in the future.

 

You should also make sure you keep your files up to date and organized by having all the documents and agreements from your supplier. This can help in the case you are audited. However, having all of this documentation can also allow you to check up on your suppliers and make sure that they are staying TAA compliant. If your product is made in multiple countries, having all the documents can help make sure that you are staying above the TAA compliant 50 percent threshold for products. It is also important to keep current documents because if the supplier moves to a non-TAA country, then you need to fix that problem or remove them from the GSA schedule contract.

 

It may also be helpful to stay current on United States Customs border patrol protection information. Staying knowledgeable about customs can also help make sure that you are staying compliant. The United States Customs and Border Protection is responsible for determining if your product meets the requirements for substantial transformation. Finally, it is important to get help from attorneys if you have many sales in a country that is not TAA compliant. The attorneys will be able to advise in ways to potentially resolve the issues and help protect you if you are facing possible sanctions from not being TAA compliant.

Consequences of Non-Compliance with the TAA

If you are not staying TAA compliant, you are taking on a large number of risks with consequences that can be very expensive. For starters, if you fail to be TAA compliant, you are giving your competition a huge advantage. Your competition can use that information to get an investigation done on your company. If you are found to be not TAA compliant, you could potentially face large fines, or even have your contract canceled altogether. You also face the possibility of being banned from doing federal contracting. This could potentially be a business’s ender because you could receive bad press, and you are no longer able to take advantage of the large government market.

It is important to note that the punishment can vary depending on certain situations surrounding your case. However, these potential consequences should make it clear that it is not worth risky when it comes to being and staying TAA compliant. When it comes to exposing these TAA violations, they can come from anyone because no rules are stating how they should be exposed. This means that your competition can be the ones to let the government know. 

Conclusion:

When it comes to the TAA and GSA contracts, it is very important that you and your business remain TAA compliant. The United States Government has a huge market that can greatly expand your business. However, the government wants to make sure that these products are coming from certain countries. Staying TAA compliant can sometimes be a challenging circumstance. But by working with the right suppliers and getting the proper documentation needed, you can make sure that you are staying compliant with the TAA. If you fail to stay TAA compliant, it is important that you correct the situation as soon as possible or remove the product from your GSA contract. Failure to take action can lead to your competition getting an advantage because you are facing potentially hefty fines or possibly being banned from selling to the United States Government altogether.

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2 Responses

  1. How does one calculate “cost of manufacture” of a finished product, say, a computer system? Do we need to calculate how long it took to manufacture say, the motherboard in one country, the processor in another country, etc., vs. assembling all of the components into one computer system in the US? Thank you.

    1. You are close, you need to open a spreadsheet and list each component or service that went into the final product and assign a cost and Country to each. Then you can add up the cost for each country. This will reveal the percentages of what the Country of Origin is.

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