Understanding FAR Clause 52.225-5 for Power Cable Buyers
Power cord suppliers routinely describe their products as "TAA compliant." Whether a government contractor supplying power cords is required to supply TAA compliant power cords is based on if FAR Clause 52.225-5 is part of their contract. When the clause applies to a federal contract, the contractor generally must deliver U.S.-made or designated-country end products.
The challenge is determining where a finished assembly originates when its components come from several countries. A general supplier certificate may not provide the answer.
This article covers what the clause requires, how origin is actually determined for cords and cable assemblies, and the questions that establish whether a product will hold up under review.
Why FAR Clause 52.225-5 Matters for Power Cable Buyers
When a federal contract includes the FAR 52.225-5 clause, the contractor must deliver:
- A U.S.-made end product
- A designated-country end product
- An end product disclosed under FAR 52.225-6 and accepted by the Government
The clause does not appear in every purchase. FAR 25.401 makes exceptions for several categories including small-business set-asides, acquisitions of end products for resale, and certain national-security purchases. Coverage also depends on acquisition value against the thresholds at FAR 25.402(b), currently $174,000 for WTO GPA supply contracts and lower under several free trade agreements.
The FAR clause sits within the Federal Acquisition Regulation (FAR) and governs whether products supplied to U.S. government contracts meet Trade Agreements Act (TAA) requirements. For power cable buyers, this means understanding where a product originates and how it is produced, not simply what the label says.
Which Countries Are Designated Countries?
Designated countries fall into four groups under FAR 25.003: WTO Government Procurement Agreement members, countries with U.S. free trade agreements, Caribbean Basin countries, and least developed countries.
Canada, Germany, Japan, South Korea, and the United Kingdom are some of the significant WTO GPA members. Countries such as Mexico and Australia are also designated countries through free trade agreements.
China is not a designated country. Neither are India or Vietnam. This is important for power cord and cable buyers as China remains the origin point for a large share of the world's power cables and cords.
How Is Country of Origin Determined for a Cable Assembly?
A cable made entirely in one country is straightforward. For a product made with materials from other countries, the question is generally where those materials were last substantially transformed into a new and different finished product.
Final assembly in a designated country does not always establish that country as the product's origin. The actual manufacturing process, including the nature of the components, the complexity of the work, and what gives the finished product its essential character are all factored into country of origin on a case-by-case basis.
Customs rulings can help illustrate this point. In CBP Ruling N351393, Customs found that Taiwanese conductor wire gave a passive USB cable its essential character. Adding connectors in China through a simple assembly process did not substantially transform the cable.
A different process can produce a different result. In CBP Ruling 556249, Customs examined retractile cord assemblies produced in Mexico from U.S. electrical wire. Despooling, cutting to length, molding the strain relief, coiling on mandrels, heating, reverse winding, and stripping were found to substantially transform the wire into a new and different article of commerce. In the same ruling, however, Customs held that attaching the connectors was a simple assembly operation involving a small number of components merely attached, inserted, and affixed to one another, and did not amount to a further substantial transformation on its own.
These rulings point in the same direction. Transformation tends to be found in processing performed on the cable itself, not in the work of terminating it.
Under FAR 52.225-5 there is no domestic content percentage requirement, so imported components do not by themselves disqualify a product.
There are also limitations to these customs rulings. As origin is determined on a case-by-case basis, one can't take a customs ruling and apply that to determine compliance under a federal contract.
Understanding FAR Clause 52.225-5 in Practice
The clause means you cannot rely on surface-level claims. You need to understand where the cable is manufactured, how it's transformed, and whether that process meets FAR requirements. Based on Customs rulings, origin tends to follow where the cable itself is made or substantially transformed, rather than where it is terminated or overmolded.
Common misinterpretations include:
- Assuming that TAA compliance requires U.S. production, when designated-country product qualifies
- Assuming that imported components disqualify a product manufactured in the United States
- Assuming a final assembly step is sufficient on its own to establish origin
Compliance rests on what can be justified and defended under scrutiny.
Is Your Supplier Interpreting FAR Correctly?
Suppliers often interpret the FAR clause differently based on their own processes, sourcing models, or commercial incentives. That doesn't always mean they're wrong, but it does mean their interpretation may not stand up in your specific contract context.
Warning signs to watch for:
- Vague origin claims, such as "assembled in the USA," without further detail
- Inability or unwillingness to state where the cable itself was manufactured
- Heavy reliance on generic certificates without supporting documentation
- A single blanket compliance statement applied across an entire catalog
As a buyer, the safest position is to question, verify, and document. Asking the right questions upfront is far easier than defending a decision later.
How Often Does FAR Compliance Get Audited?
There is no fixed schedule for audits.
Audits can happen at different stages, during contract performance, post-delivery, or as part of broader compliance reviews. When they do happen, they focus on a few critical areas:
Documentation: Can you prove the origin and compliance of the cables you sourced?
Traceability: Can you track how the product was manufactured and where the cable came from?
Consistency: Do your sourcing decisions align with FAR requirements across the board?
Audits rarely come with much warning. By the time questions are asked, the expectation is that the government contractor supplying products under a contract that must meet compliance has verified and can provide the documentation for the audit.
Even if a supplier provided the information, the accountability ultimately rests with the government contractor who sold it to the government.
The Hidden Risks of Non-Compliant Power Cable Sourcing
The consequences of getting this wrong are often underestimated. The immediate risk is audit failure. If documentation does not hold up, or origin claims cannot be verified, compliance breaks down quickly.
Non-compliant products can be removed from federal catalogs, such as GSA Advantage or GSA Schedules. The impact can escalate to contract loss, suspension, and debarment on future federal contracts.
There are financial penalties as well. Contractors must often refund the government for all past sales involving non-compliant items and are exposed to civil fines and additional damages due to False Claims Act liability.
If a contractor knowingly sold prohibited goods, it can trigger criminal fraud investigations and corporate officers can face personal criminal liability.
What to Look for in a Compliant Power Cord Supplier
Choosing the right supplier is one of the most effective ways to reduce compliance risk. At a minimum, a supplier should be able to provide:
- Origin documentation stated per part number rather than as a blanket catalog-wide claim
- A working understanding of the FAR clause as it applies to power cables
- A description of the manufacturing operations performed and where
- The origin of the cable itself, not only the final location of assembly or molding
Beyond that, strong suppliers will explain how their products meet FAR requirements and identify which products do not qualify. A supplier able to tell you which of their products fall outside the definition is generally reliable about what falls inside it.
A Simple Process to Ensure FAR Compliance in Your Cable Sourcing
A simple, effective process looks like this:
- Identify FAR applicability. Confirm whether your contract includes FAR 52.225-5 and whether an exception or threshold removes the line item from coverage.
- Verify origin claims. Look beyond labels and confirm where the product is actually manufactured and where the cable was made.
- Request detailed documentation. Certification of origin should specify the part number.
- Validate supplier interpretation. Confirm whether compliance is met based on U.S. manufacturing, substantial transformation, or designated-country production.
- Maintain audit-ready records. Keep documentation organized and accessible in case of review.
Why SIGNAL+POWER's USA Production Reduces Compliance Risk
SIGNAL+POWER manufactures power cords and cable assemblies for many government contractors that supply various agencies including Department of Defense, Department of the Army, Department of the Navy, Department of the Air Force, Department of Homeland Security, Department of Justice, and many others.
With over two decades of manufacturing experience overseas and domestically, we can help you navigate compliance. Our U.S. production facility in North Carolina manufactures TAA-compliant power cords and cable assemblies, including USA Molded Cords, with origin documented per part number. That gives you:
- Easier verification of origin
- Clarity on meeting FAR requirements
- Documentation you can provide on request during an audit
If you have a contract with FAR 52.225-5 in it, we can walk through the manufacturing facts and origin basis for the configuration you're buying.