B-156768, AUG. 17, 1965

B-156768: Aug 17, 1965

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

INC.: REFERENCE IS MADE TO YOUR LETTERS OF MAY 11 (WITH ENCLOSURE) AND JUNE 24. UNDER PARAGRAPH 8.2 OF APPENDIX "A" TO THE INVITATION BIDDERS WERE REQUIRED TO CERTIFY THAT THE LIBRARY CONSTITUTED A DOMESTIC SOURCE END PRODUCT AS DEFINED IN THE BUY AMERICAN ACT CLAUSE. THE INVITATION WAS MAILED TO THIRTEEN PROSPECTIVE BIDDERS AND THREE BIDS WERE RECEIVED IN RESPONSE THERETO. 743 OFFERING ONLY 35 HOURS OF MUSIC AND SUBMITTED AS AN ALTERNATE PROPOSAL TO THE SPECIFIED REQUIREMENTS WERE REJECTED AS NONRESPONSIVE. THE REQUIREMENT FOR 227 HOURS OF MUSIC WAS CONSIDERED BY THE NAVY TO BE VERY IMPORTANT IN THAT IT INCORPORATES A COMPARATIVELY LARGE SELECTION OF BACKGROUND MUSIC FROM WHICH TO CHOOSE IN THE MAKING OF VARIOUS FILMS.

B-156768, AUG. 17, 1965

TO THOMAS J. VALENTINO, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF MAY 11 (WITH ENCLOSURE) AND JUNE 24, 1965, PROTESTING AGAINST THE AWARD OF A CONTRACT TO EMIL ASCHER, INC., FOR A MUSIC BACKGROUND LIBRARY UNDER IFB NO. 171-77-65 ISSUED BY THE SUPPLY AND FISCAL OFFICER, U.S. NAVAL STATION, WASHINGTON NAVY YARD, WASHINGTON, D.C.

THE INVITATION INCORPORATED BY REFERENCE STANDARD FORM 32 ENTITLED GENERAL PROVISIONS (SUPPLY CONTRACT) WHICH CONTAINS THE STANDARD "BUY AMERICAN ACT" CLAUSE (NO. 14), AND UNDER PARAGRAPH 8.2 OF APPENDIX "A" TO THE INVITATION BIDDERS WERE REQUIRED TO CERTIFY THAT THE LIBRARY CONSTITUTED A DOMESTIC SOURCE END PRODUCT AS DEFINED IN THE BUY AMERICAN ACT CLAUSE.

THE REQUIREMENTS FOR THE MUSIC BACKGROUND LIBRARY, SET FORTH IN THE INVITATION'S SPECIFICATIONS, AS AMENDED, CONSISTED OF 227 HOURS OF MUSIC (WITH 1 YEAR COPYRIGHT CLEARANCE) RECORDED ON 78 AND/OR 33 1/3 RPM RECORDS AND ON MASTER TAPES, WHICH TAPES WOULD BE RETURNED TO THE CONTRACTOR AFTER THE MUSIC HAD BEEN TRANSFERRED THEREFROM BY THE NAVY TO 680 ROLLS OF BLANK RECORDING TAPE ALSO TO BE FURNISHED BY THE CONTRACTOR.

THE INVITATION WAS MAILED TO THIRTEEN PROSPECTIVE BIDDERS AND THREE BIDS WERE RECEIVED IN RESPONSE THERETO. THE BID OF ROBERT SLYE ELECTRONICS COMPANY, INC., WHICH DID NOT MEET ALL OF THE SPECIFICATIONS AND YOUR BID OF $3,743 OFFERING ONLY 35 HOURS OF MUSIC AND SUBMITTED AS AN ALTERNATE PROPOSAL TO THE SPECIFIED REQUIREMENTS WERE REJECTED AS NONRESPONSIVE. THE REQUIREMENT FOR 227 HOURS OF MUSIC WAS CONSIDERED BY THE NAVY TO BE VERY IMPORTANT IN THAT IT INCORPORATES A COMPARATIVELY LARGE SELECTION OF BACKGROUND MUSIC FROM WHICH TO CHOOSE IN THE MAKING OF VARIOUS FILMS, AND A LIBRARY CONTAINING ONLY 35 HOURS WAS REGARDED AS INSUFFICIENT NOT ONLY FOR THE REASON THAT IT WOULD LIMIT THE CHOICE OF MUSIC BUT ALSO BECAUSE IT WOULD, IN TIME, CAUSE UNSATISFACTORY REPETITION OF SELECTIONS. ALTHOUGH THE CONTRACTING OFFICER DETERMINED THAT ASCHER'S BID OF $4,865 CONFORMED TO THE SPECIFICATIONS, HE NOTED THAT SUCH BID REPRESENTED AN HOURLY COST OF $21.43 PLUS FOR THE MUSIC AS COMPARED WITH THE COST OF $106.94 PLUS AN HOUR FOR THE 35 HOURS OF MUSIC OFFERED UNDER YOUR BID AND HE THEREFORE REQUESTED ASCHER TO CONFIRM THE NUMBER OF HOURS IT PROPOSED TO DELIVER UNDER ITS BID. IN REPLY TO THE INQUIRY, ASCHER ADVISED THE CONTRACTING OFFICER THAT IT WOULD SUPPLY THE 227 HOURS OF GENERAL BACKGROUND MUSIC AS SPECIFIED IN THE INVITATION. THEREAFTER, THE CONTRACT WAS AWARDED TO EMIL ASCHER, INC., AS THE ONLY RESPONSIVE BIDDER, ON MARCH 30, 1965.

YOU PROTEST THE AWARD ON THE BASIS THAT THE AGGREGATE TOTAL HOURS OF ALL THE MUSIC LISTED IN CERTAIN CATALOGUES FURNISHED BY ASCHER IN CONJUNCTION WITH ITS BID DID NOT MEET THE INVITATION REQUIREMENT OF 227 HOURS, AND THAT INASMUCH AS PRACTICALLY ALL OF THE RECORDS LISTEDIN THE CATALOGUES WERE OF FOREIGN ORIGIN (EXCEPTING A SMALL NUMBER PUBLISHED IN THE UNITED STATES BY VIDEO MOODS) SUCH RECORDS DO NOT COMPLY WITH THE REQUIREMENTS OF THE BUY AMERICAN ACT CLAUSE. YOU ASSERT THEREFORE THAT THE AWARD WAS IMPROPERLY MADE AND THAT THE INVITATION'S REQUIREMENTS CANNOT BE FULLY MET BY ANY BIDDER.

THE BUY AMERICAN ACT CLAUSE REFERENCED IN THE INVITATION DEFINES A MANUFACTURED "DOMESTIC SOURCE END PRODUCT" AS AN END PRODUCT MANUFACTURED IN THE UNITED STATES IF THE COST OF THE COMPONENTS THEREOF WHICH ARE MINED, PRODUCED OR MANUFACTURED IN THE UNITED STATES OR CANADA EXCEEDS 50 PERCENT OF THE COST OF ALL ITS COMPONENTS. THIS DEFINITION IS IN ACCORD WITH EXECUTIVE ORDER NO. 10582, ISSUED BY PRESIDENT EISENHOWER ON DECEMBER 17, 1954. AS TO A GIVEN CONTRACT, THE "END PRODUCT" IS THE ITEM (OR ITEMS) TO BE DELIVERED TO THE GOVERNMENT IN ACCORDANCE WITH THE SPECIFICATIONS OF THE CONTRACT, AND "COMPONENTS" MEANS THOSE ARTICLES, MATERIALS AND SUPPLIES WHICH ARE DIRECTLY INCORPORATED IN THE END PRODUCT.

IN THE PRESENT CASE THE OBJECTIVE OF THE INVITATION WAS THE PROCUREMENT OF A MUSIC BACKGROUND LIBRARY CONSISTING OF A STATED QUANTITY OF RECORDS, WITH A COMPLETE TRANSCRIPTION THEREOF ON TAPES, PLUS A SUPPLY OF BLANK TAPES ON WHICH ANY DESIRED SELECTIONS COULD BE RETRANSCRIBED BY THE NAVY. WE HAVE BEEN ADVISED INFORMALLY BY THE PROCURING ACTIVITY THAT THE PRIMARY USE FOR THE RECORDS INVOLVED WOULD BE FOR THE PURPOSE OF SELECTING THE MUSIC TO BE USED IN MAKING FILMS, BUT THAT IN THE ACTUAL MAKING OR PROCESSING OF THE FILMS THE MASTER TAPES CONTAINING THE MUSIC SELECTED WOULD BE USED RATHER THAN THE RECORDS.

IN RESPONSE TO OUR REQUEST FOR A COMPLETE REPORT OF THE PERTINENT FACTS AND CIRCUMSTANCES CONCERNING THE SUBJECT MATTER OF YOUR PROTEST, THE DEPARTMENT OF THE NAVY FURNISHED US WITH A REPORT OF AN INVESTIGATION CONDUCTED BY THE INSPECTOR OF NAVAL MATERIAL IN NEW YORK CITY TO DETERMINE THE PROPRIETY AND VALIDITY OF THE AWARDED CONTRACT. ON JUNE 24, 1965, THE INSPECTOR REPORTED THAT AS OF THAT DATE THE CONTRACTOR HAD DELIVERED A TOTAL OF 1660 RECORDS APPROXIMATING 175.5 HOURS OF GENERAL BACKGROUND MUSIC, OF WHICH 156.5 HOURS WERE FROM RECORDS OF FOREIGN ORIGIN, AND HAD FURNISHED A PROJECTED LIST, FOR FULFILLING THE CONTRACTUAL REQUIREMENTS, OF AN ADDITIONAL 53.5 HOURS OF MUSIC WHICH INCLUDED 47.85 HOURS BY FOREIGN PUBLISHERS. WE HAVE SINCE BEEN ADVISED THAT DELIVERY IS COMPLETE AND THAT A TOTAL OF 230 HOURS WAS FURNISHED BY THE CONTRACTOR ON 2,185 RECORDS. REGARDING THE CATALOGUES FURNISHED IN CONNECTION WITH ASCHER'S BID, IT IS FOR NOTING THAT THE IFB DID NOT ASK FOR THE FURNISHING OF CATALOGUES WITH A BID, AND THAT IN SUBMITTING ITS CATALOGUES ASCHER ADVISED THE CONTRACTING OFFICER THAT ADDITIONAL CATALOGUES WOULD BE FURNISHED IF ITS BID WAS ACCEPTED FOR AWARD.

CONCERNING THE QUESTION OF WHETHER THE FOREIGN RECORDS CONSTITUTED 50 PERCENT OR MORE OF THE COST OF THE LIBRARY COMPONENTS, THE INSPECTOR OF NAVAL MATERIAL REPORTED THAT AN ANALYSIS OF THE COSTS INVOLVED IN THE FURNISHING OF THE END PRODUCT RELATIVE TO THE FOREIGN COMPONENTS USED SHOWED A COST OF APPROXIMATELY $800 FOR FOREIGN COMPONENTS (RECORDS), AND A SUBSTANTIALLY LARGER AMOUNT OF DOMESTIC COSTS. ON THE BASIS OF SUCH INFORMATION IT THEREFORE APPEARS THAT THE COSTS OF THE COMPONENT ARTICLES AND MATERIALS OF THE LIBRARY WHICH WERE MANUFACTURED OUTSIDE THE UNITED STATES CONSTITUTES LESS THAN 50 PERCENT OF THE AGGREGATE COST OF ALL COMPONENTS, AND THE END ITEM THEREFORE CONSTITUTES A DOMESTIC PRODUCT UNDER THE DEFINITION ABOVE CITED.

IN VIEW OF THE FOREGOING WE CANNOT CONCLUDE THAT THE CONTRACT WAS IMPROPERLY AWARDED TO EMIL ASCHER, INC., AND YOUR PROTEST IS THEREFORE DENIED.