The The Trade Agreements Act (TAA) and its companion, the Buy American Act (BAA), both set policies for a preference for increased domestic purchases by the federal government and its contractors. However, the TAA is designed as kind of a counterweight to the BAA. The BAA (passed in 1933), “the first of the major domestic content restriction laws, requires federal agencies to apply a price preference for ‘domestic end products’ and use ‘domestic construction materials’ for covered contracts performed in the United States.” So, the BAA encourages use of US-produced goods.
The TAA, on the other hand, waives some of those requirements in favor of certain countries. The TAA permits waiver of BAA “domestic content restrictions” with respect to certain “countries that have trade agreements with the United States.” So, for “covered end products or construction materials imported from a designated country” where they are manufactured or transformed “are treated as domestic end products or materials for purposes of the BAA.”
A recent change to the FAR updates the thresholds at which the TAA becomes applicable to federal procurements. Because these thresholds can change, it can have an impact on which contracts are applicable to the TAA versus the BAA.
At SmallGovCon, we have noted some important aspects of the TAA, including:
- In 2025, we wrote about a decision where the COFC held that the TAA can apply to small business set-asides.
- In an older decision, however, GAO held that the TAA does not apply to small business set-asides
- We discussed how it applies in its related FAR clause, FAR 52.225-5
- We discussed that, if the TAA applies to your contract, you can deliver a U.S.-made end product if it is merely manufactured in the United States, even if the components are foreign made.
The recent rule change updates the dollar amounts where the TAA becomes applicable and is effective March 13, 2026. The FAR was updated “to incorporate revised thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements.” The effect of this rule change is that “eligible products and services will receive equal consideration with domestic offers if the estimated value of the contract meets or exceeds the new thresholds set by” this rule change.
For instance, the updated numbers for WTO GPA are:
- Supply contract (equal to or exceeding): $174,000. This is the same as the prior standard.
- Construction Contract (equal to or exceeding): $6,683,000. The old threshold was $6,708,000.
The values are different for various free trade agreements, such as that with Bahrain, for which the construction threshold has increased from $13,296,489 to $13,749,689.
The rule has updated various provisions to include “new thresholds in FAR subpart 25.4, Trade Agreements, and other sections in the FAR that include trade agreements thresholds (i.e., FAR 22.1503, 25.202, 25.402, 25.603, 25.1101, and 25.1102).”
For instance, FAR 25.202 Exceptions, will have an updated threshold number:
The old language stated : “(c) Acquisitions under trade agreements. For construction contracts with an estimated acquisition value of $6,708,000 or more, see subpart 25.4.”
The new language states: “(c) Acquisitions under trade agreements. For construction contracts with an estimated acquisition value of $6,683,000 or more, see subpart 25.4.”
The new threshold for construction agreements is actually slightly lower than the old number. This means that construction contracts with an estimate value that is slightly lower in dollar value than before will be able to use products from eligible countries in construction projects. Be sure to use the new thresholds if you work in a field where these rules are applicable.
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