The Department of Veteran Affairs (“VA”) waived the protections of the Buy American Act (“BAA”) for a drug procurement because no offeror could meet the BAA requirement. But, the Court of Federal Claims (“COFC”) ruled on this issue that the waiver does not override the Trade Agreements Act (“TAA”), meaning that the VA must procure products from countries designated under the TAA, even if the Solicitation was silent on the issue.
The VA issued a solicitation to procure Tamsulosin, a drug, under a BAA small business set-aside. Then, the VA conducted an analysis and concluded that there were no domestic sources for Tamsulosin. As a result, the VA then requested a domestic nonavailability waiver from the SBA’s Made in America Office, which was granted. The VA reissued the solicitation with the BAA waiver with no mention of the TAA.
All of the quotes submitted to the VA offered Tamsulosin sourced from a non-TAA designated country (India), except for one: The DaVinci proposal.
Nonetheless, the VA twice overlooked the DaVinci submission and awarded the contract to a reseller sourcing Tamsulosin from India. DaVinci protested that neither the nonavailability waiver nor the procurements’ classification as a BAA small business set-aside exempts the VA from its TAA obligations.
On Thursday August 7th, the COFC agreed and opined that the VA, by invoking the nonavailability waiver, removed the BAA requirements from the solicitation. The court held that in the absence of the BAA, the TAA controls international procurement preferences.
The BAA applies to small business set-asides with domestic producers. However, since there was no domestic producer, the VA received a waiver allowing international procurement. When domestic preferences are waived, the TAA governs international procurement preferences.
The far-reaching implications of the DaVinci opinion will affect Agency procurement, industry submissions, supply chain management, and how the BAA interacts with the TAA and nonavailability waivers. If you wish to discuss further, feel free to consult with the Centre Law trade team at [email protected] and [email protected] to discuss how DaVinci affects your business today.
