Introduction

In a recent bid protest decision, The DaVinci Company LLC v. United States, the U.S. Court of Federal Claims reaffirmed the enduring authority of the Trade Agreements Act (TAA) in federal procurements. At the center of the case was a straightforward but critical question: When the Department of Veterans Affairs (VA) waives domestic sourcing requirements under the Buy American Act (BAA), can it also disregard the Trade Agreements Act (TAA)? The court’s answer was a decisive no.

Background: Competing Visions of Compliance

On July 1, 2024, the VA issued a solicitation to procure Tamsulosin — a drug used to treat prostate conditions — under a small business set-aside governed by the BAA. After concluding that no domestic small business manufacturers of Tamsulosin existed, the VA secured a nonmanufacturer rule waiver from the SBA, allowing resellers of foreign-made pharmaceuticals to compete.

When all the quotes submitted offered Tamsulosin sourced from India — a country not covered by the TAA — the VA sought and obtained a nonavailability waiver from the SBA’s Made in America Office. The VA ultimately awarded the contract — twice — to companies sourcing from India.

One offeror, The DaVinci Company, stood out: It proposed to supply Tamsulosin from Spain, a TAA-designated country. After being passed over twice, The DaVinci Company filed a protest at the Court of Federal Claims, arguing that the VA erred in treating the procurement as subject only to the BAA and ignoring the TAA altogether.

The Core Legal Dispute: When Must the TAA Apply?

The government argued that once a procurement is categorized as a BAA-governed small business set-aside, the TAA does not apply — even after nonavailability and nonmanufacturer waivers effectively eliminate domestic preference requirements.

DaVinci countered that the VA’s own waiver of domestic sourcing rendered the BAA inoperative — triggering the TAA, which prohibits procurement from non-designated countries like India.

The Court rejected the government’s binary framing—either the BAA or the TAA applies—and reframed the issue as a question of statutory sequencing: When an agency removes the BAA’s protections via waiver, the TAA’s requirements must reassert themselves.

Key Legal Findings

1. Statutory Misapplication
   The court held that the VA misapplied § 2511(f) of the TAA. That provision bars the TAA from overriding small business or minority preferences — it does not authorize the VA to ignore the TAA after waiving domestic sourcing rules. By attempting to exempt the procurement from the TAA after eliminating domestic preference, the VA “treated the Solicitation as still being a BAA set-aside” despite relying on international sourcing. This was incompatible with both the BAA and TAA’s purposes.
2. Nonavailability Waiver ≠ TAA Exemption
   The court distinguished between a nonmanufacturer waiver, which allows domestic resellers to offer foreign-made products, and a nonavailability waiver, which waives domestic preference altogether. While prior cases addressed the former, the present case hinged on the latter — a crucial legal nuance the government’s argument apparently overlooked.
3. The TAA Applies to International Procurement
   Once the VA chose to source internationally by necessity, it entered the TAA’s jurisdiction. And since India is not a TAA-designated country, the VA was prohibited from awarding the contract to suppliers sourcing from India. The court cited Acetris Health, LLC v. United States, reiterating that “[t]he TAA bars procurement of products of India.”

Permanent Injunction Granted

Because The DaVinci Company was the only TAA-compliant offeror, the court found that it had a “substantial chance” of receiving the award but for the VA’s legal misstep. Accordingly, the court granted DaVinci’s motion for judgment on the administrative record and ordered the VA to reissue the solicitation in compliance with the TAA.

Key Takeaways for Federal Contractors and Agencies

1. TAA Requirements Cannot Be Side-Stepped
   Agencies cannot circumvent the TAA simply by invoking the BAA and layering on waivers. If an agency procures foreign-made goods due to lack of domestic supply, it must still respect international trade obligations.
2. Statutory Hierarchy Matters
   Procurement professionals must understand the order of operations among the BAA, TAA, and relevant waivers. Improper sequencing can result in procurement errors and successful bid protests.
3. Bid Protest Jurisdiction and Relief Are Alive and Well
   The court reaffirmed its willingness to provide injunctive relief when a protester demonstrates clear regulatory violations and competitive prejudice. Here, DaVinci lost the award not because of merit, but because the agency misread and misapplied the law.

Conclusion

The DaVinci Company v. United States stands as a strong reminder that while procurement law can be complex, statutory intent and legal clarity must prevail. Agencies may have discretion in how they procure goods and services — but that discretion ends where Congress’ clear instructions begin. When the BAA’s protections are waived, the TAA’s obligations may step in.

For contractors, particularly small businesses navigating federal procurement, the decision offers a blueprint for enforcing compliance and protecting competitive rights. For agencies, it signals the need for heightened care when navigating overlapping statutory regimes.

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