25.504-2 WTO GPA/Caribbean Basin Trade Initiative/FTAs
Source: FAR 25.504-2 on acquisition.gov
When acquisitions are covered by WTO GPA, Caribbean Basin, or FTAs, noneligible products are eliminated if eligible or U.S.-made products are offered, and award goes to the lowest-priced qualifying offer.
Overview
FAR 25.504-2 provides a practical example of how to evaluate offers under acquisitions covered by the World Trade Organization Government Procurement Agreement (WTO GPA), the Caribbean Basin Trade Initiative, or Free Trade Agreements (FTAs). The example demonstrates the process for eliminating noneligible products and determining award based on eligible and U.S.-made end products, in accordance with FAR 25.502(b). The scenario involves four offers with varying statuses (U.S.-made, domestic, eligible, noneligible) and prices. The analysis shows that offers of noneligible products are eliminated when there is an offer of a U.S.-made or eligible product, and that further distinctions between domestic and non-domestic U.S.-made products are unnecessary if both are treated equally. The award is made to the lowest-priced eligible offer remaining after applying these rules.
Key Rules
- Elimination of Noneligible Products
- Offers of noneligible products are eliminated if there is an offer of a U.S.-made or eligible product under WTO GPA/CBTI/FTA coverage.
- Equal Consideration for U.S.-Made and Eligible Products
- If U.S.-made end products (not domestic) are given the same consideration as eligible products, further analysis of domestic status is not required.
- Award to Lowest Remaining Offer
- After eliminating noneligible offers, the contract is awarded to the lowest-priced eligible or U.S.-made offer.
Responsibilities
- Contracting Officers: Must correctly identify and eliminate noneligible offers, ensure equal treatment of eligible and U.S.-made products, and award to the lowest-priced qualifying offer.
- Contractors: Must accurately identify the status of their products (eligible, U.S.-made, domestic, noneligible) and understand how these affect evaluation.
- Agencies: Must ensure compliance with trade agreement requirements and proper documentation of evaluation decisions.
Practical Implications
- This example clarifies the evaluation process for acquisitions subject to trade agreements, helping avoid improper elimination or selection of offers.
- Contractors should be precise in product classification to remain competitive.
- Common pitfalls include misclassifying products or misunderstanding the elimination process, which can lead to protest or disqualification.
Example 1.
| Offer A | $304,000 | U.S.-made end product (not domestic) |
| Offer B | $303,000 | U.S.-made end product (domestic), small business |
| Offer C | $300,000 | Eligible product |
| Offer D | $295,000 | Noneligible product (not U.S.-made) |
Analysis: Eliminate Offer D because the acquisition is covered by the WTO GPA and there is an offer of a U.S.-made or an eligible product (see 25.502(b)(1)). If the agency gives the same consideration given eligible offers to offers of U.S.-made end products that are not domestic offers, it is unnecessary to determine if U.S.-made end products are domestic (large or small business). No further analysis is necessary. Award on the low remaining offer, Offer C (see 25.502(b)(2)).