On December 11th, the U.S. Trade Representative (USTR) announced the U.S. dollar values of the thresholds that will apply in 2018 and 2019 to U.S. federal and state procurement covered by the WTO Government Procurement Agreement (GPA) and free trade agreements (FTAs). Thresholds are a key element in determining whether procurement is covered by a trade agreement. U.S. procurement valued at or above specified thresholds must be conducted in accordance with the agreements. This post outlines the new thresholds that apply under the GPA and FTAs and contrasts them with the 2016-17 thresholds. It also notes the thresholds for which the U.S. dollar value is never adjusted.
Every two years USTR, pursuant to Executive Order 12260, determines the U.S. dollar value of thresholds in accordance with formula specified in the GPA and FTAs. The most recent USTR threshold determination was published in the Federal Register (82 Fed. Reg. 58248). USTR will submit notifications of its adjusted thresholds to the WTO procurement committee and to its FTA counterparts. The other parties to the GPA and FTAs will make similar adjustments to reflect the thresholds in their local currencies.
Central/federal government entities will apply the following adjusted thresholds in procurement of goods and services:
- $180,000 threshold for procurement covered under the GPA, U.S.-Bahrain FTA, U.S.-Morocco FTA, U.S.-Oman FTA, U.S.-Panama FTA and U.S.-Peru FTA. (The threshold value for 2016-17 was higher at $191,000.)
- $80,317 threshold for procurement under the U.S. Australia-FTA, U.S.-Chile FTA, U.S. Colombia FTA, Dominican Republic-Central American FTA (DR-CAFTA), U.S.-Singapore FTA and the North American Free Trade Agreement (NAFTA), except goods from Canada. (The comparable value for 2016-17 was slightly lower at $77,533.)
- A $555,000 threshold applies to U.S. sub-central government enterprises and other entities in most FTAs (U.S.-Singapore FTA and List B entities covered under the Australia FTA, Bahrain FTA, Chile FTA, Colombia FTA, DR-CAFTA, Morocco FTA, Oman FTA, Panama FTA and Peru FTA.
- A $401,584 threshold applies to NAFTA and List A Entities in most other FTAs.
- A $6,932,000 threshold applies to all entities covered under the GPA and all but three FTAs. (This represents a decline from the 2016-17 threshold value of $7,358,000.)
- NAFTA and the Bahrain and Oman FTAs apply two thresholds for construction services: a $10,441,216 threshold to constructions purchased by central government entities and a $12,851,327 threshold for other government entities.
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