B-157821, DEC. 20, 1965

B-157821, DEC. 20, 1965

TO TENNEX CORPORATION OF AMERICA:

REFERENCE IS MADE TO TELEGRAM DATED OCTOBER 8, 1965, FROM THE HONORABLE DONALD J. IRWIN, MEMBER OF CONGRESS, AND TO YOUR LETTER DATED OCTOBER 14, 1965, WITH ENCLOSURES, PROTESTING THE AWARD OF A CONTRACT TO WESTMINISTER SPORTS, INCORPORATED, UNDER INVITATION FOR BIDS NO. FPNGA-J-27277-RA-6-3- 65, GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, FOR TABLE TENNIS BALLS.

THE INVITATION CONTAINED A REQUIREMENT FOR TABLE TENNIS BALLS, ESTIMATED AT $19,675 FOR THE NINE-MONTH PERIOD FROM JULY 1, 1965, OR DATE OF AWARD, WHICHEVER WAS LATER, THROUGH MARCH 31, 1966.

THE SPECIFICATIONS FOR THE TABLE TENNIS BALLS REQUIRED WERE STATED AS FOLLOWS:

"TABLE TENNIS BALLS. PLASTIC FOR TOURNAMENT PLAY. DIAMETER, NOT LESS THAN 1.475 INCHES AND NOT GREATER THAN 1.512 INCHES. WEIGHT NOT LESS THAN 37 GRAINS (2.40 GRAMS) AND NOT MORE THAN 39 GRAINS (2.53 GRAMS). SEE PURCHASE DESCRIPTION BELOW:

THE PURCHASE DESCRIPTION FOR THE BALLS STATED, IN PERTINENT PART, AS FOLLOWS:

"1. DESCRIPTION. TABLE TENNIS BALLS COVERED BY THIS PURCHASE DESCRIPTION SHALL BE SPHERICAL IN SHAPE AND BE SUITABLE FOR TOURNAMENT PLAY. BALLS SHALL BE BUT OF ONE TYPE AND SIZE.

"2. MATERIAL. SHALL BE A FIRST GRADE COMMERCIAL QUALITY VIRGIN CELLULOSE NITRATE PLASTIC. THE PLASTIC SHALL BE COMPOUNDED FROM CELLULOSE NITRATE, AND SUCH OTHER COMPONENTS * * * AS HEREINAFTER SPECIFIED. THE CELLULOSE NITRATE SHOULD HAVE A NITROGEN CONTENT OF 10.65 TO 11.25 PERCENT.

"3. SIZE-DIMENSIONS. BALL DIAMETER SHALL NOT BE LESS THAN 1.475 INCHES AND NOT GREATER THAN 1.512 INCHES AS DETERMINED IN PARAGRAPH 9A. "OUT-OF- ROUND SHALL NOT EXCEED 0.015 INCH AS DETERMINED IN PARAGRAPH 9B.

"4. WEIGHT. WEIGHT SHALL NOT BE LESS THAN 37 GRAINS (2.40 GRAMS) AND NOT MORE THAN 39 GRAINS (2.53 GRAMS) AS DETERMINED IN PARAGRAPH 9C.

"5. FINISH-COLOR. THE FINISHED BALL SHALL BE A SEMI-TRANSLUCENT WHITE COLOR AND SHALL HAVE A MATTE FINISH FREE OF SPOTS OR PIMPLES.'

IT IS REPORTED, AND THE RECORD SHOWS, THAT AT THE TIME OF BID OPENING, WESTMINISTER'S BID WAS SUBSTANTIALLY LOWER THAN THAT OF TENNEX, AND ALSO THAT THE WESTMINISTER BID INCLUDED FEDERAL EXCISE TAXES. SINCE WESTMINISTER NAMED IN ITS BID AS THE SOURCE OF ITS TABLE TENNIS BALLS THE FIRM OF A. HAGEDORN AND COMPANY OF OSNABRUCK, WEST GERMANY, IT WAS NECESSARY AND PROPER TO APPLY THE APPROPRIATE BUY AMERICAN DIFFERENTIAL TO WESTMINISTER'S BID PRICES FOR THE PURPOSE OF EVALUATION OF ITS BID WITH THOSE OF THE OTHER BIDDERS.

IT APPEARS FROM THE ENCLOSURES WITH YOUR LETTER OF OCTOBER 14, 1965, THAT YOUR PROTEST AGAINST AWARD OF A CONTRACT TO WESTMINISTER IS PREDICATED UPON THE FOLLOWING ALLEGATIONS OF FACT: (1) THAT THE TABLE TENNIS BALLS OFFERED BY WESTMINISTER WERE MADE IN WEST GERMANY AND HENCE THE AWARD IS IN VIOLATION OF THE "BUY AMERICAN ACT; " (2) THAT THE TABLE TENNIS BALLS OFFERED BY WESTMINISTER DO NOT MEET THE REQUIRED SPECIFICATIONS; AND (3) THAT THE OFFERED WESTMINISTER BALLS ARE MISLABELED SINCE THE PACKAGING INDICATES THAT THE BALLS WERE "MADE IN U.S.A.'

CONCERNING THE BUY AMERICAN ACT, SUBPART 1-6.1 OF THE FEDERAL PROCUREMENT REGULATIONS PROVIDES IN PERTINENT PART AS FOLLOWS:

"S 1-6.100 SCOPE.

THIS SUBPART IMPLEMENTS THE BUY AMERICAN ACT (41 U.S.C. 10A-D) AND THE POLICIES SET FORTH IN EXECUTIVE ORDER 10582, DECEMBER 17, 1954, AS AMENDED BY EXECUTIVE ORDER NO. 11051, SEPTEMBER 27, 1962, WITH RESPECT TO SUPPLY AND SERVICE CONTRACTS OTHER THAN CONSTRUCTION CONTRACTS. (FOR CONSTRUCTION CONTRACTS, SEE SUBPART 1-6.2)

"S 1-6.102 STATUTORY REQUIREMENTS.

EXCEPT AS PROVIDED IN S 1-6.103, THE BUY AMERICAN ACT REQUIRES THAT IN THE PROCUREMENT OF SUPPLIES AND SERVICES ONLY DOMESTIC SOURCE AND PRODUCTS SHALL BE ACQUIRED FOR PUBLIC USE. IN DETERMINING WHETHER AN END PRODUCT IS A DOMESTIC SOURCE END PRODUCT, ONLY THE END PRODUCT AND ITS COMPONENTS SHALL BE CONSIDERED.

"S 1-6.103-3 UNREASONABLE COST OR INCONSISTENCY WITH THE PUBLIC INTEREST.

THE RESTRICTIONS OF THE BUY AMERICAN ACT DO NOT APPLY WHEN IT IS DETERMINED BY THE HEAD OF AN AGENCY THAT THE COST OF A DOMESTIC SOURCE END PRODUCT WOULD BE UNREASONABLE OR THAT ITS ACQUISITION WOULD BE INCONSISTENT WITH THE PUBLIC INTEREST. SUCH DETERMINATION SHALL BE MADE IN ACCORDANCE WITH S 1-6.104-4.

"S 1-6104 PROCEDURES.

"S 1-6.104-1 APPLICABILITY.

THE FOLLOWING PROCEDURES APPLY TO ALL CONTRACTS INVOLVING THE PROCUREMENT OF END PRODUCTS, EXCEPT CONTRACTS EXCLUSIVELY FOR END PRODUCTS FOR USE OUTSIDE THE UNITED STATES.

"S 1-6.104-4 EVALUATION OF BIDS AND PROPOSALS.

(A) UNLESS OTHERWISE DETERMINED BY THE HEAD OF THE AGENCY IN ACCORDANCE WITH THE BUY AMERICAN ACT, WHERE THE PROCEDURES IN THIS S 1 6.104-4 RESULT IN THE ACQUISITION OF FOREIGN END PRODUCTS, THE ACQUISITION OF DOMESTIC SOURCE END PRODUCTS WOULD BE (1) UNREASONABLE IN COST OR (2) INCONSISTENT WITH THE PUBLIC INTEREST (SEE S 1-6.103 3).

"/B) EXCEPT AS PROVIDED IN PARAGRAPH (D) OF THIS SECTION, BIDS AND PROPOSALS SHALL BE EVALUATED AS PROVIDED IN THIS SECTION SO AS TO GIVE PREFERENCE TO DOMESTIC BIDS. EACH FOREIGN BID SHALL BE ADJUSTED FOR PURPOSES OF EVALUATION BY ADDING TO THE FOREIGN BID (INCLUSIVE OF DUTY) A FACTOR OF 6 PERCENT OF THAT BID, EXCEPT THAT A 12 PERCENT FACTOR SHALL BE USED INSTEAD OF THE 6 PERCENT FACTOR IF THE FIRM SUBMITTING THE LOW ACCEPTABLE DOMESTIC BID IS A SMALL BUSINESS CONCERN OR A LABOR SURPLUS AREA CONCERN (AS DEFINED IN SS 1-1.701 AND 1-1.801, RESPECTIVELY), OR BOTH.

"/D) DEVIATIONS FROM THE REQUIREMENTS OF THIS S 1-6.104-4 MAY BE AUTHORIZED BY THE HEAD OF THE AGENCY IN ACCORDANCE WITH THE BUY AMERICAN ACT AND EXECUTIVE ORDER NO. 10582, AS AMENDED.'

PURSUANT TO AND IN ACCORD WITH THE ABOVE REGULATIONS WESTMINISTER STATED IN ITS BID THAT THE BID ITEM WOULD BE MANUFACTURED BY A. HAGEDORN AND COMPANY OF OSNABRUCK, WEST GERMANY. SINCE THE ITEM OFFERED BY WESTMINISTER IS FOREIGN-MADE THE PRICE DIFFERENTIAL FACTOR WAS REQUIRED TO BE ADDED TO ITS BID PRICE FOR EVALUATION PURPOSES. NOTWITHSTANDING THIS INCREASE, WHICH WAS COMPUTED AFTER DEDUCTION OF THE REPEALED EXCISE TAX, WESTMINISTER'S BID REMAINED THE LOW BID. IT THUS APPEARS THAT ALL PROVISIONS OF THE "BUY AMERICAN ACT" WERE COMPLIED WITH.

AS TO THE ALLEGATION THAT THE TABLE TENNIS BALL OFFERED BY WESTMINISTER WOULD NOT MEET THE SPECIFICATIONS, IT IS REPORTED THAT THE GENERAL SERVICES ADMINISTRATION REQUESTED A UNITED STATES AIR FORCE SOURCE IN EUROPE TO INSPECT THE FACILITIES OF A. HAGEDORN, IN OSNABRUCK. THAT MANUFACTURER WAS FOUND TO BE CAPABLE OF SUPPLYING THE PRODUCT SOUGHT, AND IT WAS REPORTED THAT THE MATERIAL USED IN THE MANUFACTURE OF THEIR TABLE TENNIS BALLS IS FIRST GRADE COMMERCIAL QUALITY VIRGIN CELLULOSE NITRATE PLASTIC, HAVING A NITROGEN CONTENT OF 10.62 TO 11.25 PERCENT.

IT IS FURTHER REPORTED THAT TABLE TENNIS BALLS MANUFACTURED BY HAGEDORN WERE EXAMINED AND TESTED BY THE FEDERAL SUPPLY SERVICE QUALITY CONTROL DIVISION AND FOUND TO MEET SPECIFICATIONS.

YOUR REMAINING PROTESTATION THAT THE PACKAGES FOR THE HAGEDORN TABLE TENNIS BALLS ARE MISLABELED TO INDICATE "MADE IN U.S.A.' IS, IN ITSELF, NOT SUFFICIENT CAUSE FOR REJECTION OF THE WESTMINISTER BID. IT IS NOTED ABOVE THAT WESTMINISTER IN ITS BID PAPERS CLEARLY STATED THAT THE BALLS WERE FOREIGN MADE. HOWEVER, THE GENERAL SERVICES ADMINISTRATION HAS REPORTED THAT THE MATTER OF LABELING IS BEING REFERRED TO THE FEDERAL TRADE COMMISSION FOR ANY ACTION THAT COMMISSION DEEMS WARRANTED.

IN VIEW OF THE ABOVE, WE PERCEIVE NO LEGAL BASIS TO OBJECT TO THE AWARD OF A CONTRACT TO WESTMINISTER SPORTS, INCORPORATED, AND YOUR PROTEST MUST THEREFORE BE DENIED.