Substantial Transformation Not Necessary to Qualify as US Good for Procurement, CAFC Says
A good manufactured in the U.S. with foreign components does not have to be substantially transformed to qualify as a U.S. good for government procurement purposes, the U.S. Court of Appeals for the Federal Circuit said in a Feb. 10…
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decision. Acetris had appealed the Department of Veterans Affairs decision to disqualify from eligibility for a procurement contract Acetris’s pharmaceuticals manufactured in the U.S. from an Indian active pharmaceutical ingredient. The VA relied on a CBP ruling issued in April 2018 that found the country of origin was India because the drugs did not undergo a substantial transformation (see 1804030065). India is not a party to the World Trade Organization’s Government Procurement Agreement. The Federal Circuit, affirming a ruling from the Court of Federal Claims, found the VA does not have to defer to CBP rulings, and that the term “U.S.-made end product” in the Foreign Acquisition Regulations does not only encompass products wholly manufactured or substantially transformed in the United States. “Instead, such products may be -- as Acetris’ products are -- 'manufactured’ in the United States from foreign-made components,” CAFC said.