Navigating federal government contracts under newly imposed tariffs requires contractors to take proactive measures to manage cost increases, supply chain disruptions, and regulatory compliance challenges.
Introduction
The imposition of new tariffs can create significant challenges for federal government contractors. Tariffs on imported goods such as steel, aluminum, and other materials may lead to higher procurement costs and disruption in supply chains. For contractors working under federal contracts, understanding how to navigate these new tariffs is essential to minimize financial strain and ensure compliance with contract terms. This article explores key considerations and strategies for contractors to effectively manage the impacts of newly imposed tariffs on federal contracts.
Understanding the Impact of Tariffs on Government Contracts
As a threshold matter, certain federal government purchases are exempt from tariffs. The Harmonized Tariff Schedule lists these exemptions and should be consulted first, as the FAR requires that agencies use these exemptions “where anticipated savings to appropriated funds will outweigh the administrative costs associated with processing required [exemption-related] documentation.” See FAR 25.901, 25.903.
Reprinted courtesy of Brandon Regan, Watt, Tieder, Hoffar & Fitzgerald LLP and Amanda Z. Sin, Watt, Tieder, Hoffar & Fitzgerald LLP
Mr. Regan may be contacted at bregan@watttieder.com
Ms. Sin may be contacted at asin@watttieder.com