Where to begin?
The current market presents procurement offices with a big challenge dealing with fluctuating prices and tariff impacts. Not sure how tariffs actually work? Take Procurement U’s tariff microlearning to better understand the economic landscape:
Then consider these five steps you can take to navigate the uncertainty:
- Identify commodities your office/agency purchases with significant price increase risks.
- Look for alternative products that are not impacted by the tariffs.
- Examine your contract terms regarding price adjustments.
- Clarify what increase types are allowable (e.g., annual, index-linked).
- For “discount from list price” contracts, request current catalogs for baseline pricing.
- Require detailed justification for all price increase requests.
- Use available resources, such as ProcurementIQ (for NASPO members), for market research.
- Reference official U.S. tariff lists for current goods affected and tariff percentages.
- Request manufacturer invoices for cost verification.
- Verify the purchase date of goods relative to tariff implementation. Ensure your office/agency does not pay increased prices for goods purchased before tariff implementation.
- Leverage competition in multi-award contracts.
- Expect suppliers to absorb a portion of tariff-related costs, as these are considered business expenses. Negotiate any pass-through increase.
- Reject preemptive price increase requests not based on anticipated tariffs or documented market changes.
- Prepare for potential force majeure claims by maintaining thorough documentation.
- Consider termination for convenience as a last resort if negotiations fail.
Additional Resources:
FTA Tariff Tool Use the FTA Tariff Tool to quickly find the tariff and rule of origin for products and learn what criteria a product needs to meet to qualify for preferential tariffs.
White House Executive Order Tracker This post from George Washington University School of Law is tracking the Trump administration’s actions impacting the U.S. Federal Procurement System.
Considerations for Government Contractors This is from a federal perspective, citing FAR and DFARS. It may be relevant for states whose code is comparable or based on FAR and provide insight into what they might expect from their suppliers.
