Canada and U.S. Go For The Gold TOGETHER (Guest Author Judy Bradt)

Just as the Olympics were about the begin, two countries shared the podium with a joint victory of enduring value. The agreement signed February 16th between the United States and Canada on government procurement has four significant features that make a big difference for Canadian — and American – companies. (And, as I write this, I just realized something cool: it was signed on the same day as I myself became a dual national…)

So far, reports have focused very little on the most valuable parts! (Haven’t seen the details? Download the agreement itself HERE.)

First, the things that matter most — in order of importance!

• Both countries agreed to future negotiations on further opening markets on both sides of the border. That a positive attitude, mutual trust, and the promise of more prosperity as the world economics recover.
• The agreement breaks new ground — for the first time, opening sub-federal markets in both countries for the long term. That’s another benefit that will out-last the recession.
• And, yes, it does provide relief from a number of the Buy American provisions that flowed down with the American stimulus package.

Now, here’s what’s so impressive about how this agreement came to be:

• It achieves something negotiators were unable to achieve under NAFTA: coverage of state and provincial procurement.
• It’s a tribute to the successful advocacy driven by the tenacity and creativity of small Canadian companies hard-hit by the Buy American provisions of the Stimulus. Hats off to the leadership of the Canadian Federation of Municipalities, in particular. The resolution they passed in April of 2009 got international attention that really turned up the heat.
• It’s also a testament to the strength of the Canada-U.S. relationship. In fact, there are so few irritants between the two countries that when something IS a problem, it really stands out.
• It reflects an extraordinary amount of cooperation and collaboration not only between government and industry, but also, in Canada especially, among the provincial governments. Anyone who has experienced frustration with inter-provincial trade barriers knows how remarkable that is! The premiers gave swift consideration to the deal, and also presented a united voice of approval to the agreement when it was announced.
• The pressure on Canadian lawmakers to negotiate exceptions to Buy American provisions flowing down to state government contracts meant that Canada was willing to make the changes through the framework offered by the United States — the World Trade Organization Government Procurement Agreement.
• Once negotiators were using that framework to ease barriers on Stimulus-funded projects, it became much simpler to ease discriminatory barriers on other sub-federal procurement, too.

One could claim that the directly-measurable economic impact of the Buy American provisions in the Stimulus were a pretty small part of the overall two-way trade relationship. However, the flow-down of Stimulus funds affected untold billions of dollars of business. Furthermore, the symbolic effects of the new barriers were huge and insidious, damaging thousands of supplier relationships with uncertainty and risk aversion.

Buy American — Fast Facts

• The original Buy American Act of 1933 covers only federal procurement, not private sector / commercial purchasing, nor state and local government purchasing. It’s still in force, and provides the legislative authority for several variations of related regulations and implementation.That’s another reason why the recent agreement was so important to get: when these provisions are passed into law, they last a long time!

• Definitions of “American-made” are different for U.S. government procurement than they are under Customs and Tariff laws!
• The Buy America (no “n”) Act, which came decades later, applies preference for U.S.-made iron, steel, and manufactured products used in state and local transportation construction projects that receive federal grant funding from the Federal Highway Trust Fund. There are different provisions for highway projects funded through the Federal Highway Administration, and rolling stock purchases and other procurements funded through the Federal Transit Administration.

• Other Buy American provisions flow down to state and local government projects along with funds from the Airport Improvement Program (AIP) administered by the Federal Aviation Administration for Construction and Equipment Grants.
• The Buy American provisions in the American Reinvestment and Recovery Act (aka ARRA or Stimulus) require state and local recipients of grants for construction and public works to give preference to American-made iron, steel and manufactured products.
• The 2010 Bilateral U.S.-Canada agreement created Buy American exceptions on state and local construction or public works projects:
  • worth more than US$7.804 million
  • that receive ARRA funding via one of seven grant programs
  • and that opened for competition on or after 16 Feb 2010 and before 30 September 2011.
  • Buy American provisions DO flow down from prime contractors to subcontractors.

• All these laws also allow grant recipients to apply for exceptions for which you might qualify. Successful application for exceptions, or “waivers,” requires both eligibility AND advance buy-in from key stakeholders.
• Canadian Trade Commissioners in the United States can offer guidance on which rules apply to you, whether or not you have a problem, and how to go about fixing it. See more at www.infoexport.gc.ca and www.sell2usgov.ca.

Do Buy American Provisions Apply At State And Local? What To Ask

Identification Questions & Steps to Successful Waivers

The general issues that determine whether Buy American-type provisions apply are:

• The ultimate consumer: are they covered by a trade agreement, or free to discriminate?
• The source of funds: do Buy American obligations flow to the buyer along with the money?
• The nature and value of the prime contract: is it under or over the relevant value threshold for goods, services, or construction?
• The waiver terms: If your project isn’t covered by trade agreement exceptions, can you get a waiver?

About Judy:

Judy Bradt, Principal & CEO of Summit Insight LLC of Washington DC is an award-winning strategic adviser for government contracts. Over 22 years, she’s helped over 6,000 companies land more than $300 million in government contracts.

Remember to also tune in to the 7-Part Series “Seven Steps to Success: Jump Start Your Government Contracts” with Judy on the PI Window on Business Show on Blog Talk Radio.

Starting on Monday, January 18th between 3:00 and 4:30 PM EST, the first of seven parts will be a special 90 minute segment in which we will provide a 30 minute general overview of the current state of Government Contracting. In the remaining 60 minutes of this initial broadcast we will then delve into the specifics of each of the seven steps starting with Strategy.

On every second Monday from that point on we will review the remaining steps which include; Focus, Process, Competition, Teaming, Relationships and Marketing.

What makes the PI Window on Business format ideal for this type of information series is that all segments are recorded and made available on an on-demand basis. This means that the intervening two weeks between each segment broadcast will give you an opportunity to tune in the previously aired show at your convenient. In essence you will be able to stay current according to your schedule versus the live broadcast schedule.

Like the first segment, the seventh segment will also be a 90 minute special in which we will open up the phone lines in the last 30 minutes for you to call in with any questions you may have regarding the series.

Scheduled Broadcasts:

Segment One (Government Contracting Why? and Step One: Strategy) – Monday, January 18th, 2010 – 3:00 to 4:30 PM EST

Segment Two (Step Two: Focus) – Monday, February 1st, 2010 – 3:00 to 4:00 PM EST

Segment Three (Step Three: Process – Segment A) – Monday, March 1sth, 2010 – 3:00 to 4:00 PM EST

Segment Three (Step Three: Process – Segment B) – Monday, March 15th, 2010 – 3:00 to 4:00 PM EST

Segment Four (Step Four: Competition) – Monday, March 29th, 2010 – 3:00 to 4:00 PM EST

Segment Five (Step Five: Teaming) – Monday, April 12th, 2010 – 3:00 to 4:00 PM EST

Segment Six (Step Six: Relationships) – Monday, April 26th, 2010 – 3:00 to 4:00 PM EST

Segment Seven (Step Seven: Marketing) – Monday, May 10th, 2010 – 3:00 to 4:30 PM EST

NOTE: Part 3 in the the Seven Steps to Success Series was originally scheduled to air on the 15th of February. However, given the announcement on February 12th that the United States and Canada had reached an accord regarding a Buy American exemption, Part 3 dealing with Process was rescheduled to March 1st. In its place we aired the “Buy American Special: Open Skies For Canadian Firms.”

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