Trade Agreement Act Changes 2016
Trade Agreement Act (TAA) chaos reined for Schedule holders during the summer of 2016. The summer is over now, but TAA ramifications remain. While their ultimate goal of increasing TAA compliance is laudatory, their sudden, stringent methods of enforcement have left many contractors befuddled, frustrated, and without their products advertised on GSAAdvantage!
The Facts
GSA’s summer enforcement has most affected Schedule 75, Office Supplies.
Until this summer, GSA Contracting Officers (CO) warned Schedule holders that non-compliant items were listed; the Schedule holder was asked to remove the offending items via modification and upload a new pricelist. Now GSA has shifted its stance so that full responsibility for TAA compliance lies with vendors. Instead of notifying vendors or warning about non-TAA compliant products, contracts are simply removed from GSAAdvantage!.
When an item is manufactured in a country of origin (COO) that is not TAA compliant (e.g., China, Venezuela, Turkey), the contractor’s Authorized FSS Pricelist is being removed from GSAAdvantage!, which automatically takes the contractor out of compliance with the GSA Schedule’s terms and conditions. Additionally, post-modification uploads may be rejected if an item’s COO does not match GSA’s records from the manufacturer or the vendor may be required to provide an updated Letter of Supply proving the COO information they have on file.
Some companies manufacture the same item in more than one place. If any of these places is a non-TAA compliant country, the item is removed from the Schedule, even if the item listed on the Schedule is actually manufactured in the TAA compliant country.
Most resellers and distributors (for Schedule 75 especially), receive new manufacturer’s pricelists quarterly. However, resellers and distributors are finding themselves behind the ball, because GSA appears to have a direct line to the manufacturers and their stated COO on a weekly, and even daily, basis.
The Consequences
Each of these conditions is resulting in the contractor’s Authorized FSS Pricelist being removed from GSAAdvantage!. This affects the contractor’s bottom line and a decrease of government sales.
Because GSA is able to update their own COO files on an overnight basis (a manufacturer reports a change in COO, which results in non-TAA compliance), contractors are finding themselves in SIP upload hell. For instance, a contractor may have uploaded an approved FSS Pricelist that is rejected overnight due to such a change. The contractor then finds the offending line item, removes it from the contract, and receives another approval for upload from their CO. Before this spreadsheet can be uploaded, another change occurs. And so on and so on.
We urge vendors to consider all TAA changes as contract modifications, taking all the care with re-creating a pricing spreadsheet that you would with any mod.
Best Practices
When awarded a GSA Schedule, contractors provide GSA with a description of their tracking system for maintaining TAA compliance. If this system it is not working, the contractor must revisit that system and update it, as product compliance now requires daily scrutiny.
EZGSA is advising resellers and distributors to assign an employee to be responsible for TAA compliance and COO maintenance for each of their manufacturers. We suggest that this designated person create a reporting mechanism; establish a close relationship with a representative from each manufacturer the contractor represents so that they can be made aware of COO changes at the same time as, or before, GSA. In this manner, the designated employee can alert his or her appropriate co-worker of the need for removing line items and re-uploading a pricelist before it is removed from GSAAdvantage! by the government systems.
Those companies already utilizing EZGSA Contract Management services will receive an overview about this process. We are also available to actually create and implement the process, as an additional service. Please feel free to contact us at 301-913-5000 or mcohen@ezgsa.com for more information.