B-170600, DEC. 11, 1970

B-170600: Dec 11, 1970

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WHICH WAS AWARDED TO YOU ON JULY 15. WHICH IS ENTITLED "REPRESENTATIONS. OF PERTINENCE TO YOUR PROTEST IS PARAGRAPH 7. IS A DOMESTIC SOURCE END PRODUCT (AS DEFINED IN THE CLAUSE ENTITLED 'BUY AMERICAN ACT'). THAT COMPONENTS OF UNKNOWN ORIGIN HAVE BEEN CONSIDERED TO HAVE BEEN MINED. OR AS AN END PRODUCT MANUFACTURED IN THE UNITED STATES IF THE COST OF THE COMPONENTS THEREOF WHICH ARE MINED. THE CLAUSE IS PRESCRIBED BY PARAGRAPH 1-6.104-5 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR). ARTICLE 8 OF STANDARD FORM 33A IS ENTITLED "LATE OFFERS AND MODIFICATIONS OR WITHDRAWALS.". THE CLAUSE IS CONSISTENT WITH THE PROVISIONS OF FPR 1-2.305 RELATING TO LATE MODIFICATIONS AND WITHDRAWALS OF BIDS.

B-170600, DEC. 11, 1970

BID PROTEST - LATE BID MODIFICATIONS - BUY AMERICAN ACT DENIAL OF PROTEST OF R & O INDUSTRIES, INC., AGAINST THE CANCELLATION OF A CONTRACT FOR FURNISHING 71 SCREW THREADING SETS ISSUED BY THE FEDERAL SUPPLY SERVICES, GSA. WHERE PROTESTANT IN HIS BID STATED "COMPONENTS OF ITEM 2 MOSTLY FOREIGN ORIGIN" IN CERTIFYING HIS PRODUCT UNDER THE "BUY AMERICAN CERTIFICATE" OF THE CONTRACT THEN SUCH DESCRIPTION AFFORDED THE PROCURING AGENCY NO BASIS FOR DETERMINING WHICH PIECES WOULD BE OF DOMESTIC MANUFACTURE AND GSA HAD NO ALTERNATIVE TO APPLYING THE SIX-PER CENT DIFFERENTIAL TO THE WHOLE ITEM MAKING THE BID HIGH. NO INFORMATION GIVEN TO THE CONTRACTING OFFICER CLARIFYING THE BID CAN BE CONSIDERED AFTER THE BIDS OPENED, AND THEREFORE, THE AWARD MUST BE CANCELLED.

TO R & O INDUSTRIES, INC.:

WE REFER TO YOUR PROTEST BY LETTER DATED AUGUST 10, 1970, AGAINST THE CANCELLATION BY THE FEDERAL SUPPLY SERVICE (FSS), GENERAL SERVICES ADMINISTRATION (GSA), OF CONTRACT GS-OOS-87522, WHICH WAS AWARDED TO YOU ON JULY 15, 1970, FOR THE FURNISHING OF 71 SCREW THREADING SETS LISTED AS ITEM 2 IN INVITATION FOR BIDS (IFB) FPNTP-B5-24631-A-6-9-70, ISSUED MAY 7, 1970, BY FSS.

THE IFB, STANDARD FORM 33, SOLICITATION, OFFER, AND AWARD, BORE A NOTATION ON ITS FACE MAKING ALL OFFERS SUBJECT TO SOLICITATION INSTRUCTIONS AND CONDITIONS, STANDARD FORM 33A, AND GENERAL PROVISIONS (SUPPLY CONTRACT), STANDARD FORM 32, AS WELL AS CERTAIN OTHER DOCUMENTS AND PROVISIONS. IN ADDITION, PAGE 5 OF THE IFB BORE A NOTATION INCORPORATING BY REFERENCE SEVERAL FORMS, INCLUDING GSA FORM 1424, ENTITLED GSA SUPPLEMENTAL PROVISIONS, WHICH SUPPLEMENTS AND MODIFIES THE PROVISIONS IN STANDARD FORMS 32 AND 33A.

PAGE 2 OF STANDARD FORM 33, WHICH IS ENTITLED "REPRESENTATIONS, CERTIFICATIONS, AND ACKNOWLEDGMENTS," REQUIRES BIDDERS TO CHECK VARIOUS ITEMS AND TO PROVIDE CERTAIN INFORMATION AS TO OTHER ITEMS. OF PERTINENCE TO YOUR PROTEST IS PARAGRAPH 7, WHICH READS AS FOLLOWS:

"BUY AMERICAN CERTIFICATE

THE OFFEROR HEREBY CERTIFIES THAT EACH END PRODUCT, EXCEPT THE END PRODUCTS LISTED BELOW, IS A DOMESTIC SOURCE END PRODUCT (AS DEFINED IN THE CLAUSE ENTITLED 'BUY AMERICAN ACT'); AND THAT COMPONENTS OF UNKNOWN ORIGIN HAVE BEEN CONSIDERED TO HAVE BEEN MINED, PRODUCED, OR MANUFACTURED OUTSIDE THE UNITED STATES.

EXCLUDED END PRODUCTS COUNTRY OF ORIGIN"

THE BUY AMERICAN ACT CLAUSE, WHICH APPEARS AS ARTICLE 14 IN STANDARD FORM 32, DEFINES A DOMESTIC SOURCE END PRODUCT AS AN UNMANUFACTURED END PRODUCT WHICH HAS BEEN MINED OR PRODUCED IN THE UNITED STATES, OR 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 EXCEEDS 50 PERCENT OF THE COST OF ALL ITS COMPONENTS. THE CLAUSE IS PRESCRIBED BY PARAGRAPH 1-6.104-5 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR).

ARTICLE 8 OF STANDARD FORM 33A IS ENTITLED "LATE OFFERS AND MODIFICATIONS OR WITHDRAWALS." WITH CERTAIN EXCEPTIONS NOT HERE PERTINENT, THIS ARTICLE PRECLUDES CONSIDERATION OF A BID MODIFICATION RECEIVED AFTER THE SCHEDULED TIME OF BID OPENING. THE CLAUSE IS CONSISTENT WITH THE PROVISIONS OF FPR 1-2.305 RELATING TO LATE MODIFICATIONS AND WITHDRAWALS OF BIDS.

CLAUSE NO. 26, GSA FORM 1424, WHICH IS ENTITLED "INTERPRETATION OF CONTRACT REQUIREMENTS," IS PRESCRIBED BY GENERAL SERVICES PROCUREMENT REGULATION (GSPR) 5A-7.101-72, PUBLISHED AT 41 CFR 5A-7.101-72, FOR USE IN FSS FIXED-PRICE SUPPLY CONTRACTS. IT CONSISTS OF ONE SENTENCE, WHICH PROVIDES, "NO INTERPRETATION OF ANY PROVISION OF THIS CONTRACT, INCLUDING APPLICABLE SPECIFICATIONS, SHALL BE BINDING ON THE GOVERNMENT UNLESS FURNISHED OR AGREED TO IN WRITING BY THE CONTRACTING OFFICER OR HIS DESIGNATED REPRESENTATIVE."

ITEM 2 IN THE IFB CALLED FOR FIVE DIFFERENT TOOLS IN VARIOUS SIZES FOR EACH SCREW THREADING SET. TWO SIZES WERE REQUIRED FOR A DIESTOCK AND A TAP AND REAMER WRENCH AND TEN SIZES EACH FOR A THREAD CUTTING DIE, A TWIST DRILL AND FOR EACH OF THREE DIFFERENT STYLES OF A THREAD CUTTING TAP, MAKING A TOTAL OF 54 PIECES PER SET.

ON JUNE 9, BIDS WERE OPENED BY FSS AS SCHEDULED. YOUR BID ON ITEM 2 (QUOTING A UNIT PRICE OF $149.50 TO WHICH A PROMPT PAYMENT DISCOUNT OF 1 PERCENT, 20 DAYS, WAS APPLICABLE) WAS THE APPARENT LOW BID ON THE ITEM. EXAMINATION OF THE BID SHOWED THAT UNDER PARAGRAPH 7 ON PAGE 2 OF STANDARD FORM 33 YOU HAD ENTERED IN THE BLOCK HEADED "EXCLUDED END PRODUCTS" THE NOTATION "COMPONENTS OF ITEM 2 MOSTLY FOREIGN ORIGIN" AND IN THE BLOCK HEADED "COUNTRY OF ORIGIN" THE NOTATION "SPAIN AND JAPAN - DUTY OF 20% INCLUDED IN BID PRICE." THE ONLY OTHER INFORMATION WHICH YOU SUPPLIED WITH YOUR BID CONCERNING THE SOURCE OF ITEM 2 APPEARED ON PAGE 8 OF THE BID UNDER THE QUALIFIED PRODUCTS DATA. IN THIS CONNECTION, YOU INDICATED THAT ALL TEN SIZES OF TWIST DRILLS WOULD BE OF FOREIGN MANUFACTURE, SEVEN BY KOBE STEEL, LTD., AND THREE BY FUJIKOSHI, LTD.

DURING A SUBSEQUENT SURVEY OF YOUR PLANT FACILITIES IN PICO RIVERA, CALIFORNIA, GSA REPRESENTATIVES OBTAINED FROM YOU INFORMATION TO THE EFFECT THAT UNDER ITEM 2 YOU INTENDED TO FURNISH 46 PIECES OF FOREIGN SOURCE AND 8 PIECES OF DOMESTIC SOURCE. IN ADDITION, THE GSA REPRESENTATIVES WERE ADVISED BY YOU THAT COSTWISE THE 46 FOREIGN PIECES WOULD ACCOUNT FOR 48.3 PERCENT OF THE TOTAL COST OF THE 54 PIECES COMPRISING EACH SCREW THREADING SET, AND THE COST OF THE REMAINING 8 PIECES, WHICH WOULD BE OBTAINED FROM DOMESTIC SOURCES, WOULD AMOUNT TO 51.7 PERCENT THEREOF. ON THE BASIS OF SUCH INFORMATION, FSS EVALUATED YOUR BID AS AN OFFER OF A DOMESTIC SOURCE END PRODUCT, TO WHICH NO DIFFERENTIAL APPLIED, AND YOU WERE AWARDED ITEM 2.

ON JULY 24 GSA RECEIVED A PROTEST BY A COMPETING BIDDER TO THE EFFECT THAT YOUR BID ON ITEM 2 SHOULD HAVE BEEN EVALUATED AS AN OFFER OF A FOREIGN SOURCE END PRODUCT TO WHICH A SIX-PERCENT PRICE DIFFERENTIAL SHOULD HAVE BEEN ADDED, AND UNDER SUCH AN EVALUATION YOUR BID WOULD NOT BE LOWEST. FOLLOWING CONSIDERATION OF THAT PROTEST, GSA COMMUNICATED WITH YOU BY TELEPHONE ON JULY 24 AND INFORMED YOU THAT THE STATEMENT WHICH YOU MADE BENEATH THE BUY AMERICAN CERTIFICATE WAS CONSTRUED AS INDICATING THAT ITEM 2 WAS OF FOREIGN SOURCE AND THEREFORE THE AWARD TO YOU WAS ILLEGAL AND YOUR CONTRACT WAS CANCELLED. THE CANCELLATION NOTICE WAS CONFIRMED BY TELEGRAM OF THE SAME DATE.

BY LETTER OF JULY 24, YOU PROTESTED THE CANCELLATION TO GSA ON THE GROUNDS THAT BEFORE AWARD YOU HAD FURNISHED GSA WITH DATA EVIDENCING THAT THE DOLLAR VALUE OF THE COMPONENTS YOU INTENDED TO FURNISH FOR ITEM 2 WOULD BE MOSTLY DOMESTIC (51.7 PERCENT) AND THAT GSA, BY ACCEPTING YOUR BID AND ISSUING A CONTRACT TO YOU, ACCEPTED YOUR INTERPRETATION OF THE BUY AMERICAN ACT CLAUSE (I.E., THAT ITEM 2 AS DESCRIBED IN YOUR BID WAS A DOMESTIC SOURCE END PRODUCT) AND IS BOUND THEREBY UNDER THE PROVISIONS OF CLAUSE NO. 26, GSA FORM 1424. GSA UPHELD THE CANCELLATION OF YOUR CONTRACT IN A LETTER OF JULY 31.

YOUR PROTEST TO OUR OFFICE INCLUDES THE SAME CONTENTIONS AS YOU MADE IN YOUR PROTEST TO GSA. IN ADDITION, YOU URGE THAT THE NOTATION WHICH YOU ENTERED UNDER PARAGRAPH 7 ON PAGE 2 OF YOUR BID INDICATED YOUR INTENT TO SUPPLY 50 PERCENT OF THE QUANTITY OR NUMBER OF THE COMPONENTS OF FOREIGN MANUFACTURED MATERIAL. FURTHER, YOU POINT OUT THAT THERE IS NOTHING IN THE NOTATION TO INDICATE AN INTENTION TO SUPPLY OVER 50 PERCENT OF THE DOLLAR VALUE OF ALL ITEMS IN FOREIGN ORIGIN ITEMS. YOU THEREFORE CLAIM THAT THE CONTRACT IS BINDING ON BOTH PARTIES WITH RELATED LIABILITY FOR ANY COSTS OR LOSSES OR GRIEVANCES INCURRED AS A RESULT OF IMPROPER MOVEMENTS UNTIL THE ISSUE IS LEGALLY HEARD AND ADJUDICATED.

THE BUY AMERICAN CERTIFICATE ON PAGE 2 OF STANDARD FORM 33 CONSTITUTES A CERTIFICATION BY THE BIDDER THAT EACH END PRODUCT, EXCEPT AS NOTED BY THE BIDDER BENEATH THE CERTIFICATE, IS A DOMESTIC SOURCE END PRODUCT AS DEFINED IN THE BUY AMERICAN ACT CLAUSE. WHEN A BIDDER MAKES NO ENTRY UNDER THE CERTIFICATE AND DOES NOT OTHERWISE EXCLUDE ANY END PRODUCTS FROM THE REPRESENTATION AND THE INVITATION ALSO INCLUDES THE BUY AMERICAN ACT CLAUSE, THE BID IS REGARDED AS A DOMESTIC BID. B 157815, JANUARY 21, 1966; B-165186, NOVEMBER 7, 1968. WHEN AN ENTRY UNDER THE CERTIFICATE IS MADE, HOWEVER, IT MUST BE INTERPRETED ON THE BASIS OF THE BID AS SUBMITTED AS OF THE SCHEDULED TIME OF BID OPENING. TO AFFORD A BIDDER AN OPPORTUNITY AFTER BID OPENING TO SUBMIT AN EXPLANATION OR EVIDENCE WHICH WOULD VARY THE APPARENT MEANING OF AN ENTRY OR STATEMENT IN THE CERTIFICATE WOULD JEOPARDIZE THE INTEGRITY OF THE COMPETITIVE BID SYSTEM. 48 COMP. GEN. 458 (1969).

YOU APPARENTLY ASSUME THAT, SINCE YOU DID NOT STATE IN THE NOTATION BENEATH THE BUY AMERICAN CERTIFICATE IN YOUR BID THAT YOU INTENDED TO SUPPLY FOREIGN SOURCE COMPONENTS WHICH WOULD COST MORE THAN 50 PERCENT OF THE TOTAL DOLLAR VALUE OF ALL OF THE PIECES COMPRISING THE TOOL SET TO BE FURNISHED UNDER ITEM 2, YOUR BID OFFERED A DOMESTIC SOURCE END PRODUCT. THE NOTATION, HOWEVER, INCLUDED NO SUCH EXPLANATION, AND THERE WAS NO OTHER LANGUAGE IN YOUR BID TO EVIDENCE THAT YOU DID NOT INTEND TO EXCLUDE ITEM 2 FROM THE CERTIFICATE BUT MERELY DESIRED TO PLACE THE GOVERNMENT ON NOTICE THAT A NUMBER OF THE PIECES INCLUDED IN THE SETS WOULD BE OF FOREIGN MANUFACTURE. THEREFORE, SINCE YOUR BID LISTED ITEM 2 AS AN EXCLUDED PRODUCT AND DID NOT IDENTIFY ANY PARTICULAR PIECES OF THAT ITEM WHICH WOULD BE OF DOMESTIC MANUFACTURE, IT WOULD APPEAR THAT YOUR BID AFFORDED THE AGENCY NO BASIS FOR DETERMINING WHICH PIECES WOULD BE OF DOMESTIC MANUFACTURE AND GSA HAD NO ALTERNATIVE TO APPLYING THE SIX- PERCENT DIFFERENTIAL PRESCRIBED BY FPR 1-6.104-4(B) TO ALL OF THE MANUFACTURED PIECES COMPRISING THAT ITEM. SO EVALUATED YOUR BID WAS NOT THE LOWEST ON THE ITEM, WHEN COMPARED WITH THE NEXT LOWEST BID WHICH LISTED NO EXCEPTIONS TO FURNISHING DOMESTIC ARTICLES UNDER THE CONTRACT. WE MUST THEREFORE CONCUR WITH GSA THAT THE AWARD OF THE ITEM TO YOU WAS NOT PROPER.

AS TO YOUR CONTENTION THAT THE CONTRACTING OFFICER CONSIDERED AND ACCEPTED YOUR EXPLANATION PRIOR TO CONTRACT AWARD, AND THAT THE CONTRACT IS THEREFORE BINDING UPON THE GOVERNMENT UNDER THE PROVISIONS OF CLAUSE NO. 26 OF GSA FORM 1424, YOUR ATTENTION IS INVITED TO THE FACT THAT UNDER THE PROVISIONS OF GENERAL SERVICES PROCUREMENT REGULATION 5A-1.103(C) THE CLAUSES CONTAINED IN GSA FORM 1424 MERELY SUPPLEMENT, BUT DO NOT SUPERSEDE, THE FPR AND THE PROVISIONS OF STANDARD FORM 33A, BOTH OF WHICH PRECLUDE CONSIDERATION OF LATE BID MODIFICATIONS. MORE IMPORTANT, THE CONTRACTING OFFICER WAS WITHOUT AUTHORITY TO MAKE AN AWARD IN VIOLATION OF THE RULES OF COMPETITIVE BIDDING. ACCORDINGLY, THE CONTRACTING OFFICER'S UNAUTHORIZED ACTION MAY NOT SERVE AS A BASIS FOR VALIDATING THE IMPROPER AWARD. B-165186, NOVEMBER 7, 1968.

FOR THE REASONS STATED, YOUR PROTEST IS DENIED.