Domestic Products Preferred in Contracts with the Federal Government
Provided by HG.org
During certain Presidential Administrations, there are certain preferences in domestic products for contracts awarded to businesses that work for or with the federal government. When these preferences are made, the business and employees have a greater responsibility to ensure that products, materials and resources are not outsourced but processed through domestic businesses and clients.
The Federal Acquisition Regulation or FAR that seriously affects government contracts with businesses in the United States was changed during the Trump Administration which increases the need to ensure that American products are purchased with greater frequency than anything provided by foreign countries. The changes to the FAR affect domestic companies to increase the use and sale of American made and sold products, and this affects the acquisition of cheaper and mass produced materials and resources that may have been obtained through foreign clients. The rewrite the FAR affects these companies and organizations and could increase costs for everyone.
The FAR is explained prior to the government contract being awarded to the company. The owners of a business are made aware of the stipulations of what this entails before they confirm working with a government agency for products or services. However, the increase in costs for everyone could lead to fewer contracts accepted and worked by United States companies. If are only purchased through permitted companies or clients within the country, other resources and business relationships are either not possible or may need to halt until the company resumes normal business operations and transactions. The increase
in costs for materials is then passed onto the American citizens.
The Acts in Effect for Contracts
There are competing and contradictory Acts in place with the Trade Agreements Act and the Buy American Act were federal requirements are changed based on which takes precedence. These regulations affect the supply chains for contracting companies and which suppliers are possible based on the flexibility of the law and what has been explained through the federal government contract. Because of the need to increase American product purchases and sales, this could affect the relationships that have already been fostered over years of careful consideration and compromise with buyers, sellers, suppliers and distributors for products.
Billions in federal sales could be removed from the companies that are involved in the BAA stipulations that increase United States products while reducing and sometimes eliminating foreign agreements and relationships. The interplay necessary to ensure mutual profits and increased international relationships and clients is downgraded to unnecessary when the Buy American Act replaces or supersedes the Trade Agreements Act. The increase in costs for materials increases the costs for products to anyone willing to purchase them. Even with an exclusive government contract, the company and American people may lose revenue to the country through eliminating or reducing foreign interests and cooperation.
The Program of Domestic Preferences
When the FAR is changed, the specifics of government contracts have either new requirements or the necessary elements are altered from what has been needed previously by a company. Focusing on the Buy American Act, a business is pressured into following different protocols than ordinary circumstances. Generally, the owner of a company is given the option to either expanding between both the BAA and the TAA or using his or her judgment on what conditions to apply to the contract when each Act is in effect. However, the supply chain is altered when the BAA takes precedence, and this will either decrease or increase costs for each level of the products or services that are churned out by the government contract based on the supplies and resources available.
Government contracts have the usual standards, procedures and methods employed where materials and personnel must be hired or acquired. Through the BAA, the company involved in these arrangements is monitored, developments are observed and adjustments to supply chains and resources are changed in a timely manner. When adapting to these administrative orders, the business must ensure the most up to date information is applied to the deal and management is in line with these situations.
Legal Help with Domestic Preferences in Government Contracts
The lawyer that is hired by the owner of a company is needed to ensure the most up to date changes are understood and followed to avoid violations. When the FAR is changed or executive orders change how a government contract works, the lawyer becomes indispensable in keeping the business from breaking or violating certain terms and conditions of the contractual agreements.
Read more on this legal issueBidding Process on a Federal Government Contract
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.