TAA Compliance - What is it?

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on Tuesday, June 02, 2015 9:45:00 AM

TAA stands for the Trade Agreement Act. Enacted in 1979, this is an act of Congress that governs trade agreements negotiated between the United States and other countries in regards to….you guessed it, trades. TAA compliancy applies to U.S. government acquisitions over a certain dollar threshold, for the purchase of supplies or services. Ok, now that I’ve sounded super official in my explanation, I will tell you, in layman’s terms, what that means. Basically TAA tells the government that for large scale purchases of products and services, they may only buy U.S. made products, or products from designated countries that we have special contracts in place.

Now, you think that would mean U.S. manufacturing would be booming! Well, like any act, tax or law, there are a lot of exceptions and loopholes around this act. For instance, the act only protects projects that reach a certain dollar figure. This changes with time and I believe the last figure I saw was projects more than $208,000. For many government procurements, my guess is this number is conservative and it is easily surpassed.

And what of those designated countries? There are a lot of them and the list continues to grow every year. Here are the countries that are considered TAA compliant.

Lastly, one of the biggest loopholes I see is that the TAA stipulates that the “end product” must be manufactured or substantially transformed in the United States or one of those designated countries. Substantially transformed? I looked into what that means, and as far as I can tell, that it is determined on a case by case basis, but could simply mean changing the name of the product.

Up until 1979, TAA’s cousin BAA (Buy American Act), which was signed in in 1933 by former President Herbert Hoover, required the U.S. government to prefer only U.S. made products during the bid and procurement processes. (Don’t confuse this with the Buy America Act that was implemented in 1982. The Buy America Act governs mass-transit related procurements.)Although BAA only called for preferential treatment, it didn’t stipulate more than 100 other countries to consider as equal to the United States. This act still exists, however TAA supersedes it.

Now, even though I wish the TAA had a larger incentive or push to acquire products made right here in the U.S. and less from overseas, there is a substantial benefit to purchasing TAA compliant products.For instance, these agreements that the U.S. has in place with other TAA approved countries help to regulate materials and humane practices for products the government purchases. But at Kendall Howard, we make it simple. No need to worry if your product has been manufactured or substantially transformed in a TAA approved country because all products are TAA compliant! When you buy Kendall Howard products, you know you are buying a product made right here in the USA!

Any questions, comments or concerns?Or do you need a certificate of origin to submit with your next GSA or government bid contract? Send us an email at sales@kendallhoward.com and we would be more than happy to help!

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