It is the policy of the Government to provide maximum practicable opportunities. As a result, given the NMR exemption with SB Set asides less than $150,000 and with no other Buy American exception, is DFARS 252.225-7021 acceptable for GSA SB set asides regardless of the TAA exception in FAR 25.401(a)(1)?
Not having all the facts with regard to this acquisition, I am making some assumptions in an attempt to answer your question. Based on the information you provided in the background, I assume this acquisition has a dollar value between $3,500 and $150,000. Also, the Contracting Officer has decided to follow the guidance in FAR 8.405-5 -- Small Business, and use a set aside for this order which is being placed against Federal Supply Schedule contracts. As you've already pointed out, FAR Subpart does not apply to acquisitions set aside for small businesses and that’s in accordance with FAR 25.401(a)(1). Additionally, the prescription for DFARS 252.225-7021, Trade Agreements, at DFARS 225.1101(6) states the following:
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(6) Except as provided in paragraph (6)(iv) of this section, use the basic or an alternate of the clause at 252.225-7021 <http://www.acq.osd.mil/dpap/dars/dfars/html/current/252225.htm#252.225-7021> , Trade Agreements, instead of the clause at
FAR 52.225-5, Trade Agreements, in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items,
if the World Trade Organization Government Procurement Agreement applies, i.e., the acquisition is of end products listed at 225.401-70 <http://www.acq.osd.mil/dpap/dars/dfars/html/current/225_4.htm#225.401-70> , the value of the acquisition equals or exceeds $180,000, and none of the exceptions at 25.401(a) applies.
Based on the prescription, DFARS 252.225-7021 does not apply to your acquisition because it does not exceed $180,000 and at least one of the exceptions at FAR 25.401(a) does apply. Also, it doesn’t appear that WTO-GPA applies either because this acquisition does not exceed the threshold for a supply contract at FAR 25.402(b).