B-164396, AUG. 5, 1968

B-164396: Aug 5, 1968

Additional Materials:

Contact:

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

 

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

TO PUGET SOUND PIPE AND SUPPLY COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 21. THE INVITATION WAS FOR A REQUIREMENTS CONTRACT FOR FSC GROUP 47. WHICHEVER IS LATER. BIDS WERE OPENED ON FEBRUARY 26. WAS LOW BIDDER ON GROUP 2 IN THE AMOUNT OF $238. BECAUSE PINES WAS OFFERING FOREIGN-MADE PIPE. A 6-PERCENT DIFFERENTIAL WAS APPLIED TO ITS BID IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 1- 6.104-4 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR). IS ABOUT 11 PERCENT. YOU CONTEND THAT SINCE YOUR COMPANY IS A SMALL BUSINESS CONCERN. A 12 PERCENT DIFFERENTIAL SHOULD HAVE BEEN APPLIED TO PINES' BID. YOU ALSO CONTEND THAT IT IS YOUR COMPANY'S RESPONSIBILITY TO DETERMINE ITS OWN SUPPLIER.

B-164396, AUG. 5, 1968

TO PUGET SOUND PIPE AND SUPPLY COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 21, 1968, PROTESTING ANY AWARD OF A CONTRACT TO THE R.H. PINES CORP. UNDER INVITATION FOR BIDS NO. AW6S-4560 ISSUED FEBRUARY 7, 1968, BY THE GENERAL SERVICES ADMINISTRATION, AUBURN, WASHINGTON.

THE INVITATION WAS FOR A REQUIREMENTS CONTRACT FOR FSC GROUP 47, CLASS 4710, STEEL PIPE, FOR THE PERIOD JUNE 1, 1968, OR DATE OF AWARD, WHICHEVER IS LATER, THROUGH MAY 31, 1969. BIDS WERE OPENED ON FEBRUARY 26, 1968. THE R.H. PINES CORP., OFFERING PIPE OF FOREIGN ORIGIN FOR MOST ITEMS, WAS LOW BIDDER ON GROUP 2 IN THE AMOUNT OF $238,117.15. YOUR COMPANY OFFERED UNDER GROUP 2 DOMESTIC PIPE TO BE SUPPLIED BY JONES AND LAUGHLIN STEEL CO., A LARGE BUSINESS CONCERN, AT A TOTAL BID PRICE OF $266,519.70.

BECAUSE PINES WAS OFFERING FOREIGN-MADE PIPE, A 6-PERCENT DIFFERENTIAL WAS APPLIED TO ITS BID IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 1- 6.104-4 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), IMPLEMENTING THE PROVISIONS OF THE BUY AMERICAN ACT AND EXECUTIVE ORDER NO. 10582 OF DECEMBER 17, 1954, AS AMENDED. WITH THE APPLICATION OF THE 6-PERCENT DIFFERENTIAL, PINES REMAINED THE LOW BIDDER.

THE DIFFERENCE IN YOUR BID, OFFERING DOMESTIC-MADE PIPE, AND THE PINES' BID, OFFERING FOREIGN-MADE PIPE, IS ABOUT 11 PERCENT. YOU CONTEND THAT SINCE YOUR COMPANY IS A SMALL BUSINESS CONCERN, A 12 PERCENT DIFFERENTIAL SHOULD HAVE BEEN APPLIED TO PINES' BID. YOU ALSO CONTEND THAT IT IS YOUR COMPANY'S RESPONSIBILITY TO DETERMINE ITS OWN SUPPLIER, AND THAT ITS SMALL BUSINESS STATUS SHOULD NOT BE ADVERSELY AFFECTED BY ITS CHOICE OF A SUPPLIER.

IN THIS REGARD, FPR SEC. 1-6.104-4 (B), CONCERNING EVALUATION OF BIDS AND PROPOSALS UNDER THE BUY AMERICAN ACT, PROVIDES IN PART:

"* * * 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 SECS. 1-1.701 AND 1-1.801, RESPECTIVELY), OR BOTH. * * *"

UNDER THE PROVISIONS OF FPR SEC. 1-1.701-1 (D), WHENEVER ANY PREFERENTIAL TREATMENT OF SMALL BUSINESS CONCERNS IS INVOLVED, AS HERE, A SMALL BUSINESS NONMANUFACTURING CONCERN WHICH SUBMITS A BID IN ITS OWN NAME, BUT WHICH PROPOSES TO FURNISH A PRODUCT NOT MANUFACTURED BY ITSELF, IS DEEMED TO BE A SMALL BUSINESS ONLY WHEN IT IS FURNISHING THE PRODUCTS OF A SMALL BUSINESS MANUFACTURER OR PRODUCER. IN THIS INSTANCE, YOUR COMPANY PROPOSES TO FURNISH PRODUCTS MANUFACTURED BY A LARGE BUSINESS CONCERN AND, FOR THAT REASON, MAY NOT BE REGARDED AS A SMALL BUSINESS CONCERN FOR THE PURPOSE OF APPLYING THE 12-PERCENT FACTOR TO THE LOW FOREIGN BID OF PINES.

ACCORDINGLY, WE CONCLUDE THAT THE LOW BID OF PINES WAS CORRECTLY EVALUATED BY APPLICATION OF THE 6-PERCENT FACTOR PROVIDED BY FPR SEC. 1- 6.104-4 (B).