Federal procurement and the False Claims Act: Another risk when it comes to your domestic origin claims - Reed Smith LLP
If you want to supply goods to the U.S. federal government, you'd better be prepared to show your products are either of U.S. origin, or there’s a good reason they don’t have to be. The government prioritizes using American-made goods and hiring American workers and, in most cases, if the government’s going shopping, it’s going to have to buy American. If you’re an American manufacturer, finding ways to supply your product to the government could be just the boost your company needs. But, before you start responding to RFPs, take a minute to make sure you’re in compliance with the relevant rules and regulations, because the legal web in this space is tangled, and noncompliance could seriously cost you.
For consumer-facing “Made in USA” (MUSA) claims, although the nuances are complicated, the overall legal framework is simple. Most products advertised as MUSA should be all or virtually all made in the United States, all the way back to raw materials. That’s not the right standard for products subject to domestic preference requirements under acquisition and procurement regulations. Under the Federal Acquisition Regulation and Defense Federal Acquisition Regulation Supplement, contracts subject to the Buy American Act (BAA) require components from domestic or qualifying countries to make up at least 65% of a manufactured end product’s cost for the product to qualify as domestically manufactured (for products delivered between 2024 and 2028). BAA requires suppliers to...
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