Capitol Supply, Inc. was fined more than $6m in penalties and fees for lacking proper procedures to track country of origin compliance. Under the Qui Tam provision, the original whistleblower act, a former employee alleged that Capitol Supply falsely certified products sold to the government as compliant with the Trade Agreement Act (TAA). The courts requested information to certify or demonstrate the country of origin of products sold. Although the original request was sent in 2010, Capitol Supply failed to fully respond.
A full audit was performed, and it was discovered that country of origin (COO) information was neither recorded nor retained prior to the auditors’ initial request . Further, GSA conducted several Contractor Assistance Visits (CAVS) without discovering that Capitol Supply did not retain COO information. Still, it was found that Capitol Supply controlled the scope of the visit but provided limited sample data.
In 2011, Capitol Supply received a “cure notice” to fix issues related to TAA in 2011. But a lack of supporting data, good report cards, and slow responses did not protect Capitol Supply from litigation or damages.
All GSA vendors should take time to review processes and procedure they have in place to ensure compliance with the TAA. A contractor must regularly verify with the manufacturer that the country is within a designated country and meets the requirements of the GSA and TAA. You can check the latest list of TAA designated countries.
Determining TAA compliance isn’t always simple. There are complex issues that can affect whether a product is compliant. Review our post that talks about how to remain compliant.
Steps our team takes to help determine TAA compliance:
- Review list of TAA compliant countries
- Provide guidance concerning TAA compliance
- Work with government contractor and GSA to provide the required certifications
- Process the required modifications to remove non-compliant products from your GSA Schedules
Vice President for Coley GCS, LLC, a Government Contracts Consulting, Coaching and Training company. Daniel is a Certified Federal Contracts Manager (CFCM) and leads the day-to-day operations of Coley’s consulting practice. He has two decades of experience with the acquisition, management, and marketing of Federal, State, and Local government contracts. Daniel specializes in all aspects of GSA Schedules management and marketing and has helped hundreds of Coley clients remain compliant with the terms of their GSA contract while helping them expand their business.