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Trade Agreements Act (TAA) and Buy American Act (BAA)

The Trade Agreements Act (TAA) limits the countries from which products sold can originate from for Government Contracts. Essentially, products that are from, manufactured in, or substantially transformed in the United States or a designated country register as compliant. For services, the location of the company indicates the country of origin. You can find a list of approved countries in the FAR Clause – https://www.acquisition.gov/far/52.225-5

The Buy American Act (BAA) is a bit more stringent and slightly more complex. It was originally passed in 1933 and determines that there shall be preference for United States goods manufactured or produced in the United States. In certain cases, this preference can be waived. This happened with some large trade agreements but is often dependent on the type (goods, services, construction) and the size of the procurement.

According to Executive Order 10582, when “materials constitutes 50 percent or more of the cost of all the products used in such material…the executive agencies shall either (1) add 6 percent to the total bid or offered price of materials of foreign origin, or (2) add 10 percent to the total bid or offered price of materials of foreign origin,” with a few exclusions. DFARS adds to this by requiring an evaluation factor of 50 percent for DOD projects.

There have been two additional Executive Orders (13858 and 13788) that are intended to strengthen and implement Buy American Act compliance and procedures among Federal departments.


Buy American Act and its associated Executive Orders:


DFARS Clause:


The information provided is for informational purposes only. It is not legal advice. Contact your attorney if you require legal advice.

Kathi BleaseTrade Agreements Act (TAA) and Buy American Act (BAA)