Selling to the US Government: A Brief Guide for Irish and NI Companies

Irish and Northern Irish companies expanding to the US market should consider selling to the US government as part of their expansion strategy. Last year, the US government purchased almost $500 billion in products and services—it is the single largest customer in the world and it pays its bills. By law, the US government publishes its formal solicitations for purchases valued at more than $25,000 on An Irish/Northern Irish company can customize its search for opportunities to sell its products and services to US government.

An Irish/Northern Irish company does not need to have a formal presence in the US to bid on and perform government contracts, but do keep in mind the earlier post about using a US entity as a ‘lightning rod.’ In order to bid on, and perform, a US government contract a Northern Irish/Irish company would have to (i) obtain a US Taxpayer Identification Number; (ii) possess Dun & Bradstreet number; (iii) been in business for at least 2 years; (iv) have acceptable past performance rating; (iv) offer commercial items at fair and reasonable prices; (v) submit offers in English; (vi) accept payment in US Dollars; (vii) accept the Buy American Act (“BAA”); and (viii) comply with the Trade Agreements Act (“TAA”).

The BAA provides a required preference for American goods (BAA does not apply to services) in direct government purchases. Under the BAA, “American goods” are items manufactured in the US; and more than 50% of the cost of all components of the item must be of US origin. The nationality of the contractor is not considered when determining if a product is of domestic origin. The definition of manufacturing is made on a case-by-case basis. Packing or re-assembling an item in the U.S. is probably not enough for the manufacturing to be deemed to have taken place in the US; assembly of an end-item, though, in the US probably is enough for the manufacturing to be deemed to have occurred here. Manufactured articles are considered domestic if they have been manufactured in US from components “substantially all” of which have been mined, produced or manufactured in US. “Substantially all” is defined in regulations to mean that the cost of foreign components does not exceed 50% of the cost of all components. Note that the component test of BAA been waived for acquisitions of commercially available off-the-shelf (COTS) items

A Northern Irish/Irish company can apply to federal agencies to waive BAA provisions for foreign made products, regardless of: (i) the product; and (ii) the procuring entity source of funding. Agencies may purchase foreign end products and use foreign construction material if: (i) procurement of domestic goods or use of domestic construction materials would be inconsistent with public interest; (ii) domestic end products or construction materials are unavailable; (iii) contracting officer determines that costs of domestic end products or construction materials would be unreasonable; (iv) agency is procuring IT that is a commercial item; (v) goods are acquired specifically for commissary resale; (vi) products to be used outside the US (not listed in Federal Acquisition Regulations); and (vii) purchases below the micropurchase threshold ($3,000) (not listed in Federal Acquisition Regulations).

The TAA provides that the US government may acquire only US-made or designated country end products. End Products are defined as “those articles, materials and supplies to be acquired for public use.” Designated Countries include World Trade Organization Government Procurement Act countries, such as Ireland and the UK. TAA always applies to ID/IQ task orders. Country of origin is normally determined by reference to the last country in which the goods were “substantially transformed”—that is, subjected to a process that gives it a new name, use or essential character. Irish and Northern Irish companies can seek guidance by reference to the customs ruling letters or by requesting a binding ruling from U.S. Customs and Border Protection as to the country of origin of any specific product.

The US Trade Representative sets dollar thresholds for TAA applicability by country and type of procurement:

  • If estimated cost of procurement is over TAA threshold, then TAA governs; and
  • If estimated cost of procurement is less than TAA threshold, then BAA governs.