Recent GAO Decision Underscores Importance of Understanding Buy American Act

10.7.2010 - Posted in E&B Alerts - Government Contracts

The Buy American Act (BAA) requires that federal agencies purchase only domestic-manufactured end products for public use, subject to certain exceptions. The Trade Agreements Act is one such exception. It provides that eligible products from countries specified in the World Trade Organization's "Government Procurement Agreement" (WTO GPA) are entitled to "non-discriminatory" procurement by certain named United States federal agencies. Thus, pursuant to Executive Order No. 12,260, BAA requirements are waived for products subject to the WTO GPA.

Recently, in HID Global, Inc., B-403103 (Sept. 15, 2010), the Government Accountability Office (GAO) denied a protest alleging that the Government Printing Office (GPO) erroneously failed to invoke the TAA exception in a solicitation for passport covers. In this case, the protestor HID Global, Inc. (HID), asserted that a request for proposals issued by the GPO, for specialized passport fabric, was in essence a procurement by the State Department, the intended end-user of the passport fabric.

The identification of the actual procuring agency was significant because the GPO is not among the agencies listed in the WTO GPA, while the State Department is listed. Nonetheless, HID maintained that the State Department's "intimate involvement" in the solicitation process established it as a de facto procuring agency. Because the State Department is listed in the WTO GPA, the protestor argued that the solicitation should have been subject to the more favorable treatment under the TAA exception. As evidence of this "intimate involvement," HID argued that although the RFP stated that "the GPO, in cooperation with its partner, the Department of State" was responsible for conducting the solicitation, it was the State Department itself that actually drafted the solicitation specifications, conducted the procurement, evaluated offerors, and personalized the passports.

The GAO rejected this argument, stating that although the GPO's procurement of passport covers would indeed require a cooperative partnership between the two agencies, it did not consider such evidence "compelling indicia that the State Department was a co-procuring agency," and refused to "ascribe to the State Department a status that the agencies themselves did not."

The HID Global case underscores the often complex nature of the various statutory mandates to federal agencies regarding the country of origin for products purchased for public use. Contractors should be familiar with the operation of the BAA and the WTO GPA's list of agencies when responding to solicitations.