More suppliers of consumer electronics to federal agencies are being put on notice by the government that their products do not meet the requirements of the federal Trade Agreements Act (TAA).  Federal Acquisition Regulation (FAR) 52.225-5 limits the sources of electronics and other end-products offered to the government on supply contracts to World Trade Organization Government Procurement Agreement countries; Free Trade Agreement countries, least developed countries; and Caribbean Basin countries.

Problems arise when vendors, or their upper tier distributors, change where the country where their manufacturing is sourced from a designated country to a non-designated country.  That’s when end-products which were previously compliant become non-compliant, often without the knowledge of the federal supplier.  The risks to the supplier are very real.  Whistle-blower rules encourage disgruntled employees, competitors and anyone else to file false claim suits on the government’s behalf when non-compliant products are discovered.  Litigation has become a bonanza for private attorneys who bring these suits against vendors.  Litigation defense, settlement and finding of liability can be financially ruinous to the defendant.

VARs and other resellers face added risk, as they may have extensive catalogs and dozens or hundreds of suppliers, and must therefore rely upon those suppliers for accurate country of origin data.

Any vendor using a federal supply contract would be well served by frequently reviewing their catalogs for compliance with TAA requirements.  When non-compliant products are found, they should be removed immediately from the supply contract (they may still be offered as open-market items) and check each new product to be offered.

Scott Orbach is author of Getting a GSA Schedule and President of EZGSA.  He has overseen awards of GSA Schedules for more than 450 companies.