Final Determination Concerning Notebook Computer’s Country of Origin
In response to the question “Where do General Services Administration (GSA) contract articles originate?”, Customs and Border Patrol (CBP) released a Notice of Final Determination on March 10, 2015 resolving ambiguity concerning whether or not a notebook style computer that is manufactured in a non-designated country has been “substantially transformed” by the installation of software or an operating system that is from a designated country.
As per Federal Acquisition Regulation (FAR) 25.4, all GSA sales must comply with the Trade Agreements Act (TAA). This act of congress can restrict the procurement of goods and services for federal contracts if the goods or services are not in compliance with the TAA. To be compliant, at least half of the cost of manufacture or the location where the product is “substantially transformed” must be a TAA Designated Country. In order for an article that has been made with parts from another locality to be considered substantially transformed, it must be changed into a wholly new and different article of commerce and exhibit a new name, character, or use from the previous article.
In its determination, the CBP found that downloading an operating system or software from a designated country does not amount to a substantial transformation for purposes of U.S. Government procurement. CBP explained that if most of the major components are sourced in a non-TAA country, then the computer was not transformed by the addition of either software or an operating system. If your GSA schedule contract offers products that are manufactured in the United States or a TAA Designated Country, you are compliant. However, it is wholly your responsibility to determine if your products are compliant.
To learn more about compliance with the TAA ruling concerning country of origin for notebook computers, you can read the Final Determination in the Federal Register or contact BH Sky Associates directly for additional information.
About BH Sky
BH Sky Associates, based in Princeton, New Jersey, and Washington, D.C., helps clients identify, negotiate, secure, market and manage procurement opportunities and contracts at federal, state, and local levels of government. It is New Jersey’s only company specializing in GSA/VA Schedule Contracts and Government Market Intelligence. BH Sky offers professional consulting services to small and mid-size companies in a wide range of industries seeking to do business with the government. For more information, view our videos or contact us directly by phone 866.468.7420 or email..