GSA Multiple Award Schedule (MAS) contracts have many compliance requirements to ensure that contractors provide products and services that align with federal procurement regulations. This fall, GSA renewed efforts to take action to remove non-compliant products from GSA contracts and GSA Advantage!. In the coming months, GSA will be removing items from a contractor’s Schedule if they are not in compliance with Trade Agreements Act (TAA) regulations, include prohibited hardware and telecommunications, as well as non-authorized refurbished items. Compliance with the terms and conditions of your Multiple Award Schedule is critical to the success of your contract, so let’s cover what you need to know about these non-compliant products.
The first portion of products we will discuss are those that are not in compliance with FAR clause 52.204-23 Prohibition on Contracting for Hardware, Software, and Services. This one is more niche, but nonetheless still important to follow. This clause refers to the covered entity Kaspersky Lab, any successor entity to Kaspersky Lab, any entity that controls, is controlled by, or is under common control with Kaspersky Lab, or any entity of which Kaspersky Lab has majority ownership. The removal of items covered under this clause will include any items developed or provided by a covered Kaspersky Lab. Additionally, any hardware, software, or service developed or provided in whole or in part by Kaspersky Lab its affiliates, or subsidiaries.
FAR clause 52.204-25 covers the Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment. This was a big change to the FAR in 2020 and is something that could potentially affect a lot of contractors. The prohibition specifies telecommunications equipment produced in The People’s Republic of China such as Huawei Technologies Company or ZTE Corporation or any affiliated entities. This also includes telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense reasonably believes to be an entity owned, controlled by, or connected to the government of the People’s Republic of China.
In addition to items that are from the People’s Republic of China, items that are not compliant with FAR clause 52.225-5 Trade Agreements will also be removed from GSA Schedules in the coming months. TAA compliance means the “final products” you sell through your GSA Schedule as a product manufacturer or GSA reseller cannot be made in certain countries including, China, India, Indonesia, Iran, Iraq, Malaysia, Pakistan, Russia, Sri Lanka, and more. If the items you sell to GSA have been “substantially transformed” in the United States or in a signatory country designated by the TAA then your items will not be removed from the Schedule. This is a very nuanced regulation, so we suggest you consult with your legal counsel and/or a consultant to ensure you are abiding by the TAA. The full list of TAA-compliant countries can be found here.
To ensure your company follows TAA compliance, it’s important you are keeping a close eye on the manufacturing of your products. Countries such as China, India, Russia, and Malaysia, violate TAA compliance if a product is “substantially transformed” within these countries. Moreover, correct documentation of the Country of Origin (COO) is vital, including origin markings, most current COO, and the correct COO code.
As GSA tries to remove non-TAA-compliant products as well as prohibited technologies, they are also weeding out products that are mid-designated as “made in the US.” In 2020, the Trump Administration released Executive Order (EO) 13881, “Maximizing Use of American-Made Goods, Products, and Materials” requesting an update of the Buy American standards. The Federal Acquisition Regulation (FAR) Council made all the substantial changes effective January 21, 2021.
Additionally, President Biden issued Executive Order 14005 for “Ensuring the Future is Made in All of America by All of America’s Workers.” The goal is to procure goods, products, and materials produced in the United States. As the Executive Branch ramps up efforts to buy American made products and items sourced from the United States, any items that have been mislabeled or incorrectly designated will be removed. Products can be removed if they don’t meet requirements laid out in the Executive Orders and the updates to the Buy American Act (BAA) including raising the domestic content threshold from 55% to 60%.
Previously allowed under some Special Item Numbers (SINs), refurbished, reconditioned, and repaired items will soon be removed from GSA Schedules. This set of removals will extend to remanufactured items offered under a SIN where remanufactured items are not allowed. This rule change mostly impacts contractors selling under Large Category A, Office Management where toner cartridges are the only remanufactured item allowable under SIN 339940, SIN 339940 OS4, and SIN 339940OVER and refurbished, reconditioned, and repaired items are not within the scope of the MAS solicitation. Under Large Category C, Furniture and Furnishings, SIN 33721RSB includes remanufactured furniture that meets the FAR prescribed definition of “factory rebuilt to original specifications.” This means these items are not considered refurbished, reconditioned, or repaired items and are exempt from the removal.
It's important to remember that it's your responsibility to ensure your product information is accurately incorporated into your GSA Schedule and displayed on GSA Advantage! throughout the life of your contract. It's good practice to routinely review the Country of Origin of products offered on your GSA contract because sometimes manufacturers change their manufacturing points. If you find out that a Country of Origin has changed for a product, you should make sure you update your GSA Advantage! to reflect the changes. It’s also important to take steps to ensure non-compliant products are not offered on your MAS contract. GSA Contracting Officers may take corrective action if contractors repeatedly offer non-compliant products. For more information about GSA initiatives to remove non-compliant products, visit the Vendor Support Center, Supply Chain Risk Management section.
At Winvale, we know GSA contractors have to keep up with a lot of rules and regulations throughout the life of their contract. For more questions, advice, and guidance concerning TAA compliance and noncompliance, feel free to reach out to one of our consultants.