DoD, GSA and NASA Final Rule: Trade Agreements Thresholds

by Sudarsanan Sivakumar

  • International Trade Law

Like clockwork, Trade Agreements Act thresholds are revised every two years to determine the minimum value a contract must meet or exceed for the World Trade Organization Government Procurement Agreements and Free Trade Agreements to apply. On February 23, 2024, the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) issued a final rule that amends the Federal Acquisition Regulation (FAR) to include the updated Trade Agreements Act (TAA) thresholds.

FAR 25.402(a)(1) states that for supply, service and construction contracts that meet or exceed the stated thresholds, the Buy American Act (BAA) requirements and other discriminatory provisions are to be waived by the government. In other words, the government must treat offers of eligible products from specifically designated countries on the same scale as domestic products offers.

FAR 25.403(b) summarizes the threshold as:

Trade Agreement Supply Contract
(equal to or exceeding)
Service Contract
(equal to or exceeding)
Construction Contract
(equal to or exceeding)
WTO GPA $174,000 $174,000 $6,708,000
Australia FTA $102,280 $102,280 $6,708,000
Bahrain FTA $174,000 $174,000 $13,296,489
CAFTA-DR (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua) $102,280 $102,280 $6,708,000
Chile FTA $102,280 $102,280 $6,708,000
Colombia FTA $102,280 $102,280 $6,708,000
Korea FTA $100,000 $100,000 $6,708,000
Morocco FTA $174,000 $174,000 $6,708,000
USMCA- Mexico $102,280 $102,280 $13,296,489
Oman FTA $174,000 $174,000 $13,296,489
Panama FTA $174,000 $174,000 $6,708,000
Peru FTA $174,000 $174,000 $6,708,000
Singapore FTA $102,280 $102,280 $6,708,000
Israeli Trade Act $50,000

The revisions made to the contracts at or below the Simplified Acquisition Threshold (SA) and for Commercial Products (including Commercially Available Off-the-Shelf (COTS) Items) or for Commercial Services do not impose any new obligations or affect the applicability of clauses and provisions. The only impact of these revisions is the changes made to the thresholds themselves.

It is important for contractors to take note of the threshold changes that take place every two years. While not significant, it minimizes and, in some cases, even eradicates the full force of the Buy American Act (BAA).

If you would like to know more about the impacts and compliance issues of the Buy American Act and the Trade Agreements Act, feel free to contact the author, Sudarsanan Sivakumar, or any of our other experts at Centre Law and Consulting.