The United States offers broad coverage of services procured by federal and state entities under the WTO Government Procurement Agreement (GPA) and free trade agreements (FTAs). It covers all services purchased by its covered entities, with the exception of four categories of services, as well as several narrower exclusions.
Transportation Services: The U.S. excludes the procurement of all transportation services, including launching services, as a consequence of laws that impose domestic content requirements similar to those that apply to goods. The focus of the requirements is on the use of U.S.-flag air carriers and vessels.
With respect to air travel and transport, the Fly America Act (International Air Transportation Fair Competitive Practices Act of 1974, Section 5) requires federal employees, consultants, contractors, grantees and others to use U.S.-flag air carriers for U.S. government-financed international air travel and transportation, if available. For details, see Federal Acquisition Regulation (FAR) Subpart 47.4.
Similar restrictions apply to ocean transportation. Several laws prescribe the use of U.S.-flag vessels:
- Cargo Preference Act of 1904 requires the Department of Defense to use only U.S.-flag vessels for ocean transportation, unless they are not available at fair and reasonable rates.
- Merchant Marine Act of 1936 (also known as the Jones Act) declares U.S. policy to be to foster the development and encourage the maintenance of its merchant marine.
- Cargo Preference Act of 1954 directs civilian government agencies that are acquiring supplies that may require ocean transportation to ensure that at least 50% of the gross tonnage of those supplies is transported on privately owned U.S.-flag commercial vessels, to the extent that such vessels are available at fair and reasonable rates. This provision may be waived in an emergency.