25.403
World Trade Organization Government Procurement Agreement and Free Trade Agreements
FAR 25.403 requires contracting professionals to accurately determine acquisition value and apply trade agreement rules, ensuring only eligible U.S. or designated country products/services are acquired above WTO GPA and FTA thresholds.
Overview
FAR 25.403 outlines the requirements for applying the World Trade Organization Government Procurement Agreement (WTO GPA) and Free Trade Agreements (FTAs) to federal acquisitions. It specifies how eligible products from WTO GPA and FTA countries must be treated, establishes methods for calculating contract value thresholds to determine coverage, and details purchase restrictions under the Trade Agreements Act. The section ensures that procurement procedures are fair and that only U.S.-made or designated country end products or services are acquired when covered by the WTO GPA, unless exceptions apply. Special calculation rules are provided for leases and recurring purchases to prevent circumvention of thresholds.
Key Rules
- Nondiscriminatory Treatment
- Eligible products from WTO GPA and FTA countries must receive nondiscriminatory treatment in covered procurements.
- Threshold Calculation
- Specific methods are provided for calculating the estimated value of acquisitions (including leases and recurring purchases) to determine if WTO GPA or FTA coverage applies. All options must be included, and acquisitions cannot be divided to avoid thresholds.
- Purchase Restrictions
- For acquisitions covered by the WTO GPA, only U.S.-made or designated country end products or services may be acquired, unless such offers are unavailable or insufficient. This restriction does not apply below the WTO GPA threshold or to certain DoD purchases.
Responsibilities
- Contracting Officers: Must ensure proper threshold calculations, apply nondiscriminatory treatment, and enforce purchase restrictions as required.
- Contractors: Must offer eligible products/services and understand threshold and eligibility requirements.
- Agencies: Must oversee compliance with trade agreement provisions and ensure acquisitions are not structured to evade thresholds.
Practical Implications
- This section prevents discrimination against eligible foreign products/services and ensures compliance with international trade agreements.
- Accurate threshold calculations are critical to determine applicability and avoid improper exclusions.
- Common pitfalls include miscalculating contract value, improperly dividing acquisitions, or failing to apply purchase restrictions when required.