B-151898, AUG. 22, 1963

B-151898: Aug 22, 1963

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TO UNITED STATES MOTORS CORPORATION: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT BY THE CORPS OF ENGINEERS. THE SUBSTANCE OF YOUR CONTENTION APPEARS TO BE THAT THE AWARD SHOULD HAVE BEEN MADE ONLY TO AN AMERICAN MANUFACTURER. THAT THE TWO LOWEST BIDDERS WERE CANADIAN COMPANIES. WERE AS FOLLOWS: TABLE 1. 633.00 THE LOW BID WAS REJECTED AS BEING NON-RESPONSIVE TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION. AWARD WAS MADE TO THAT FIRM ON JUNE 21. NOTWITHSTANDING THE FACT THAT YOUR CORPORATION WAS THE THIRD LOW BIDDER. WAS DESIGNED TO ACCORD PREFERENTIAL TREATMENT TO DOMESTIC PRODUCERS AND MANUFACTURERS IN THE CASE OF PURCHASES OF MATERIALS AND SUPPLIES BY FEDERAL AGENCIES AND ESTABLISHMENTS.

B-151898, AUG. 22, 1963

TO UNITED STATES MOTORS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT BY THE CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, UNDER INVITATION FOR BIDS NO. ENG-36-109-63-11 FOR 30 KW UNINTERRUPTED POWER UNITS. THE SUBSTANCE OF YOUR CONTENTION APPEARS TO BE THAT THE AWARD SHOULD HAVE BEEN MADE ONLY TO AN AMERICAN MANUFACTURER; AND THAT THE TWO LOWEST BIDDERS WERE CANADIAN COMPANIES.

THE RECORD FURNISHED TO US BY THE DEPARTMENT INDICATES THAT THE BIDS OPENED ON JUNE 6, 1963, WERE AS FOLLOWS:

TABLE

1. CANADIAN COMMERCIAL CORPORATION

(E.P. ELECTRIC PRODUCTS, LTD.) $ 96,600.00

2. CANADIAN COMMERCIAL CORPORATION

(RUSSEL-HIPWELL ENGINES, LTD.) 103,425.00

3. CONSOLIDATED DIESEL ELECTRIC COMPANY 116,602.00

4. INTERNATIONAL FERMONT COMPANY 117,390.00

5. UNITED STATES MOTORS CORPORATION 133,741.00

6. KING-KNIGHT COMPANY 138,145.00

7.STEWART AND STEVENSON SERVICES, INC. 138,633.00

THE LOW BID WAS REJECTED AS BEING NON-RESPONSIVE TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION, THUS LEAVING CANADIAN COMMERCIAL CORPORATION (RUSSEL-HIPWELL ENGINES, LTD.) AS THE LOW RESPONSIVE BIDDER, AND AWARD WAS MADE TO THAT FIRM ON JUNE 21, 1963.

NOTWITHSTANDING THE FACT THAT YOUR CORPORATION WAS THE THIRD LOW BIDDER, YOU APPARENTLY OBJECT TO THE AWARD HAVING BEEN MADE TO A CANADIAN FIRM.

THE ACT OF MARCH 3, 1933, 47 STAT. 1520, AS AMENDED, 41 U.S.C. 10 (A) TO 10 (D), COMMONLY REFERRED TO AS THE BUY AMERICAN ACT, IMPLEMENTED BY EXECUTIVE ORDER 10582, DECEMBER 17, 1954, WAS DESIGNED TO ACCORD PREFERENTIAL TREATMENT TO DOMESTIC PRODUCERS AND MANUFACTURERS IN THE CASE OF PURCHASES OF MATERIALS AND SUPPLIES BY FEDERAL AGENCIES AND ESTABLISHMENTS, AS WELL AS TO CONSTRUCTION CONTRACTORS WITH SUCH AGENCIES AND ESTABLISHMENTS. EXCEPTIONS TO THE REQUIREMENT THAT PURCHASES BE MADE FROM DOMESTIC PRODUCERS AND MANUFACTURERS WERE MADE WHERE (1) THE MATERIALS OR SUPPLIES WERE TO BE USED OUTSIDE THE UNITED STATES, OR (2) THE HEAD OF THE DEPARTMENT OR AGENCY CONCERNED DETERMINED THAT IT WOULD BE INCONSISTENT WITH THE PUBLIC INTEREST OR THE COST OF DOMESTIC SUPPLIES OR MATERIALS WOULD BE UNREASONABLE.

IN CONSONANCE WITH THE ABOVE, THERE IS FOR NOTING THAT THE DEPARTMENT OF DEFENSE HAS DETERMINED THAT IT WOULD BE INCONSISTENT WITH THE PUBLIC INTEREST TO APPLY THE RESTRICTIONS OF THE BUY AMERICAN ACT WITH RESPECT TO CERTAIN SUPPLIES WHICH HAVE BEEN DETERMINED TO BE OF A MILITARY CHARACTER OR INVOLVED IN PROGRAMS OF MUTUAL INTEREST TO THE UNITED STATES AND CANADA. IN THIS CONNECTION, SEE SECTION 6-103.5 OF THE ARMED SERVICES PROCUREMENT REGULATION. AS A MATTER OF BACKGROUND TO THIS DETERMINATION, ATTENTION ALSO IS INVITED TO SECTION 6-504 OF THE SAME REGULATION, WHICH SECTION READS AS FOLLOWS:

"MUTUAL CANADIAN-AMERICAN INTERESTS. BECAUSE OF THE CLOSE GEOGRAPHICAL PROXIMITY OF THE UNITED STATES AND CANADA AND OF THE MUTUAL INTEREST OF BOTH NATIONS IN THE DEFENSE OF NORTH AMERICA, VARIOUS STEPS HAVE BEEN TAKEN DURING AND SINCE WORLD WAR II TO COORDINATE THEIR ECONOMIC EFFORTS IN THE COMMON DEFENSE, SO AS TO ACHIEVE---

(I) GREATER INTEGRATION OF MILITARY PRODUCTION,

(II) GREATER STANDARDIZATION OF MILITARY EQUIPMENT,

(III) WIDER DISPERSAL OF PRODUCTION FACILITIES,

(IV) ESTABLISHMENT OF SUPPLEMENTAL SOURCES OF SUPPLY, AND

(V) GREATER FLOW OF DEFENSE SUPPLIES AND EQUIPMENT BETWEEN THE TWO COUNTRIES.

ACCORDINGLY, IT IS DEPARTMENT OF DEFENSE POLICY TO SEEK THE BEST POSSIBLE COORDINATION OF THE MATERIAL PROGRAMS OF CANADA AND THE UNITED STATES AND TO ASSURE CANADA A FAIR OPPORTUNITY TO SHARE IN THE PRODUCTION OF MILITARY EQUIPMENT AND MATERIEL INVOLVING PROGRAMS OF MUTUAL INTEREST TO CANADA AND THE UNITED STATES AND IN THE RESEARCH AND DEVELOPMENT CONNECTED THEREWITH. ACCOMPLISHMENT OF THESE PURPOSES REQUIRED THE ALLEVIATION OF THE RESTRICTIONS OF THE BUY AMERICAN ACT WITH RESPECT TO PROCUREMENTS FOR PUBLIC USE OF SUPPLIES MINED, PRODUCED, OR MANUFACTURED IN CANADA IN THE MANNER PRESCRIBED IN PART 1 OF THIS SECTION.'

IN ADDITION TO THE ABOVE, IT IS OBSERVED THAT PAGE 12 OF THE INVITATION FOR BIDS CLEARLY APPRISES ALL BIDDERS THAT BIDS OR PROPOSALS OFFERING CANADIAN END PRODUCTS WILL BE TREATED AS DOMESTIC BIDS.

ACCORDINGLY, IN THE LIGHT OF THE FOREGOING FACTS AND CIRCUMSTANCES, IT MUST BE CONCLUDED THAT YOUR PROTEST FURNISHES NO PROPER BASIS ON WHICH WE WOULD BE JUSTIFIED IN HOLDING THAT THE AWARD AS MADE WAS ILLEGAL OR IMPROPER.