After Acetris Decision, Trade Agreements Act Compliance Questions Abound: Contractors Need Guidance

Merle M. DeLancey Jr., Jay P. Lessler, and James R. Staiger

The Federal Circuit’s recent decision in Acetris has left many contractors scratching their heads and asking questions. To recap, on February 10, 2020, the Federal Circuit held that, under the Federal Acquisition Regulation (“FAR”), to qualify as a “U.S.-made end product” under the Trade Agreements Act (“TAA”), a drug must be either “manufactured” in the United States or “substantially transformed” in the United States. (See Federal Circuit Holds Generic Drugs Manufactured in the U.S. from API Produced in India Qualify for Sale to U.S. under Trade Agreements Act (Acetris Decision).) This is a stark change from the Government’s long-held position that manufacturing and substantial transformation were one in the same.

As a result of the Acetris decision, federal contractors seeking to comply with or maintain compliance with the TAA are facing many questions. Some of the more prominent questions are below. Continue reading “After Acetris Decision, Trade Agreements Act Compliance Questions Abound: Contractors Need Guidance”

Federal Circuit Holds Generic Drugs Manufactured in the U.S. from API Produced in India Qualify for Sale to U.S. under Trade Agreements Act (Acetris Decision)

Merle M. DeLancey Jr., Jay P. Lessler, and James R. Staiger

Earlier today, the United States Court of Appeals for the Federal Circuit issued a decision that is sure to send shockwaves through the generic drug industry. In Acetris, the Federal Circuit held that a generic drug manufactured in the United States complied with the Trade Agreements Act (“TAA”) and could be sold to the Department of Veterans Affairs. The court made this determination even though the drug’s active pharmaceutical ingredient (“API”) came from a non-designated country, India. In reaching its decision, the court broke away from longstanding Customs and Border Protection (“CBP”) precedent that the country where the API was produced dictated the location of “substantial transformation” and thus the country of origin for any resulting drug. The court held that under the Federal Acquisition Regulation (“FAR”), to qualify as a “U.S.-made end product” under the TAA, a drug must be either “manufactured” in the United States or “substantially transformed” in the United States—but not be both.

For years, generic drug manufacturers that manufacture drugs in the United States from API produced in India and China have been precluded from selling their drugs to the U.S. Government under the TAA. The Federal Circuit’s Acetris decision opens up the U.S. Government market for generic drugs manufactured in the U.S. from API produced in India and China.

 

 

GSA’s Big Changes in 2020, Part 5: The Mass Mod Is Coming, the Mass Mod Is Coming . . . Wait, It’s Here!

Merle M. DeLancey Jr.

This is the last in a series of posts updating current and prospective Federal Supply Schedule (“FSS”) contractors about the big changes implemented or being implemented by the General Services Administration (“GSA”) in 2020—including consolidation of 24 schedules into one, streamlined schedule (called the Multiple Award Schedule or “MAS”). This post concerns GSA’s recent release of the Mass Modification (“Mass Mod”) implementing the terms and conditions for the MAS. Here is what you need to know: Continue reading “GSA’s Big Changes in 2020, Part 5: The Mass Mod Is Coming, the Mass Mod Is Coming . . . Wait, It’s Here!”

GSA’s Big Changes in 2020, Part 4: DUNS to UEI

Merle M. DeLancey Jr.

In addition to Federal Supply Schedule consolidation, GSA is replacing the official identifier federal government contractors use. Specifically, GSA is transitioning from and will stop using the Dun & Bradstreet (“D&B”) proprietary system for verification and validation of entities registering to do business with the federal government. Effective December 2020, GSA intends to have transitioned all government systems away from using D&B Data Universal Numbering System numbers (“DUNS”) and instead using new Unique Entity Identifiers (“UEI”). The UEI is a new, nonproprietary identifier that will be assigned through GSA’s System for Award Management (“SAM”) registration process.

Since as early as the 1960s, the federal government has contracted with D&B to provide DUNS numbers to companies seeking to contract with the federal government. Just like a CAGE (Commercial and Government Entity) code, an entity seeking to contract with the government must first contact D&B and obtain a DUNS number. A DUNS number is a unique nine-digit identifier for each entity performing or seeking to perform federal government contracts. Only after obtaining a DUNS number can a company then register in SAM. If a company needs to change its legal business name or physical address, it is must make such changes through D&B. Only after D&B updated a contractor’s DUNS record and made the data available to SAM could a contractor update its SAM registration. Continue reading “GSA’s Big Changes in 2020, Part 4: DUNS to UEI”

GSA’s Big Changes in 2020, Part 3: With GSA’s Schedule Consolidation, What Is Changing and What Is Not

Merle M. DeLancey Jr.

This is the third in a series of posts regarding the General Services Administration’s (“GSA”) consolidation of its federal supply schedules into one schedule contract. Our prior posts addressed GSA’s consolidation process in general and its use of Category Management in constructing the consolidated schedule. Here, we answer common industry questions regarding what is and is not changing as a result of schedule consolidation. Continue reading “GSA’s Big Changes in 2020, Part 3: With GSA’s Schedule Consolidation, What Is Changing and What Is Not”

GSA’s Big Changes in 2020, Part 2: Category Management and the New Consolidated Schedule

Merle M. DeLancey Jr.

This is the second in a series of blogs regarding the General Services Administration’s (“GSA”) Multiple Award Schedule consolidation. Previously, we addressed GSA’s three phases of consolidation. In this post, we focus on certain fundamental, structural changes to the consolidated schedule made during Phase I.

Category Management Comes to the GSA Federal Supply Schedule Program

Generally speaking, GSA’s restructuring can be labeled Category Management. Over the last year, the GSA Category Management Leadership Council and the Office of Management and Budget developed a government-wide category structure to support category management implementation across the federal government.

For years, there has been an increase in Special Item Numbers (“SINs”) under the 24 schedules. Schedules and SINs often overlapped. GSA preferred the overlap as opposed to having gaps in product and services offerings. The overlap, however, led to agency and Federal Supply Schedule (“FSS”) contract-holder confusion. And, as a result, contractors made sure to have their products and services listed under all potentially applicable schedules and SINs. This caused increased administrative work for all involved and less efficient agency purchasing as contracting officers sought to make sure contracting opportunities captured all potential vendors. Continue reading “GSA’s Big Changes in 2020, Part 2: Category Management and the New Consolidated Schedule”

GSA’s Big Changes in 2020, Part 1: Federal Supply Schedules Consolidation

Merle M. DeLancey Jr.

2020 may prove to be one of the most active years for federal contractors holding General Services Administration (“GSA”) Federal Supply Schedule (“FSS”) contracts and certain federal contractor registration requirements managed by GSA. This post is the first of a series on GSA’s changes and addresses GSA’s most publicized action—the consolidation of its federal supply schedules into one schedule.

As promised, in October 2019, GSA released a solicitation that consolidated the solicitations for its 24 federal supply schedules into one solicitation to obtain an FSS contract. GSA’s consolidation involves three Phases. Continue reading “GSA’s Big Changes in 2020, Part 1: Federal Supply Schedules Consolidation”