B-172591, AUG 17, 1971

B-172591, AUG 17, 1971

BID PROTEST - BUY AMERICAN ACT DENIAL OF PROTEST BY CAMPBELL CHAIN AGAINST AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER AN IFB ISSUED BY THE ARMY TANK AUTOMOTIVE COMMAND FOR THE PROCUREMENT OF TIRE CHAIN ASSEMBLIES. PROTESTANT CONTENDS THAT THEIR BID WOULD BE LOW IF PROPER EVALUATION FACTORS WERE USED ON THE BIDS SUBMITTED BY NOSTED KJETTING (NOSTED) AND DOMINION CHAIN CO., LTD. (DOMINION). IT IS AGREED THAT NOSTED'S BID WILL BE HIGH WHEN PROPERLY EVALUATED. BECAUSE DOMINION'S END PRODUCTS ARE EXCLUDED BY ASPR 6-103.5(A) FROM THE BUY AMERICAN ACT RESTRICTIONS, NO DIFFERENTIAL NEED BE APPLIED. THE U.S. MANUFACTURER'S EXCISE TAX AND FREIGHT COST FACTORS WERE CORRECTLY APPLIED AS REQUIRED BY THE IFB, WITH THE RESULT THAT DOMINION'S BID WAS STILL LOW. CONSEQUENTLY, THERE IS NO LEGAL BASIS UPON WHICH TO DISTURB THE AWARD.

TO CAMPBELL CHAIN:

WE REFER TO YOUR PROTEST, BY LETTER DATED APRIL 8, 1971, AS SUPPLEMENTED BY YOUR LETTER DATED JUNE 24, AGAINST AWARD OF A CONTRACT TO ANY BIDDER OTHER THAN YOU UNDER INVITATION FOR BIDS (IFB) DAAE07-71 B-1432, ISSUED MARCH 5, 1971, BY THE UNITED STATES ARMY TANK-AUTOMOTIVE COMMAND FOR THE PROCUREMENT OF TIRE CHAIN ASSEMBLIES. THE SUBSTANCE OF YOUR PROTEST IS THAT WHEN PROPER FACTORS ARE CONSIDERED IN THE EVALUATION OF THE BIDS OF NOSTED KJETTING (NOSTED) AND DOMINION CHAIN CO., LTD. (DOMINION), WHO HAVE QUOTED LOWER UNIT PRICES THAN YOU HAVE QUOTED, YOUR BID IS LOWEST.

IN THE CASE OF NOSTED, A NORWEGIAN CONCERN, WHICH OFFERS AN END PRODUCT MANUFACTURED IN NORWAY BUT EXCLUDED BY NOSTED FROM THE BUY AMERICAN CERTIFICATE IN ITS BID, YOU ASSERT THAT A FIFTY PERCENT PRICE DIFFERENTIAL IS APPLICABLE FOR EVALUATION PURPOSES UNDER THE TERMS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR), SECTION 6, ISSUED IN IMPLEMENTATION OF THE BUY AMERICAN ACT (41 U.S.C. 10A-D). IN ADDITION, YOU ASSERT THAT ALTHOUGH NOSTED'S BID STATES THAT IT INCLUDES ALL APPLICABLE FEDERAL AND STATE TAXES, NOSTED GAINS A COMPETITIVE ADVANTAGE OVER DOMESTIC BIDDERS BECAUSE IT IS NOT REQUIRED TO PAY FEDERAL, STATE AND/OR LOCAL TAXES. YOU THEREFORE URGE THAT AN AMOUNT EQUIVALENT TO SUCH TAXES SHOULD BE ADDED TO NOSTED'S BID PRICE TO COUNTERBALANCE THIS INEQUITY. WHEN THUS EVALUATED, YOU STATE, NOSTED'S BID IS NOT LOWEST.

AS TO THE BID OF DOMINION, A CANADIAN FIRM WHICH OFFERS AN END PRODUCT MANUFACTURED IN CANADA, YOU STATE THAT THE IFB PROVIDES FOR ADDITION TO THE BID PRICE OF AMOUNTS SUFFICIENT TO COVER FREIGHT CHARGES AND EXCISE TAX. SUCH AMOUNTS, YOU CLAIM, WILL INCREASE DOMINION'S BID TO AN AMOUNT IN EXCESS OF YOUR BID.

THE IFB REQUESTED BIDS FOR THE FURNISHING OF A TOTAL QUANTITY OF 10,042 PAIRS OF TIRE CHAIN ASSEMBLIES, IDENTIFIED BY FEDERAL STOCK NO. 2540-933- 9022, TO BE SHIPPED IN VARYING INCREMENTS TO SEVERAL DIFFERENT DESTINATIONS. THE ASSEMBLIES ARE INCLUDED IN GROUP 25, VEHICULAR EQUIPMENT COMPONENTS (ALL CLASSES), WHICH IS LISTED IN ARMY PROCUREMENT PROCEDURE 6-103.5 AMONG CANADIAN SUPPLIES TO BE CONSIDERED AS DOMESTIC SOURCE END PRODUCTS FOR BID EVALUATION PURPOSES UNDER THE ASPR PROVISIONS RELATING TO APPLICATION OF THE BUY AMERICAN ACT RESTRICTIONS. (SEE ASPR 6 -103.5(A).)

BID PRICES WERE REQUIRED TO INCLUDE ALL APPLICABLE TAXES AND DUTIES. FOR F.O.B. ORIGIN BIDS THE LOWEST AVAILABLE FREIGHT RATES WERE TO BE APPLIED FOR EVALUATION PURPOSES, AND FOR CANADIAN BIDS THE APPLICABLE UNITED STATES MANUFACTURER'S EXCISE TAX WAS TO BE AN ADDITIONAL EVALUATION FACTOR.

CLAUSES INCORPORATED IN THE IFB BY REFERENCE UNDER PARAGRAPH L-2 OF THE GENERAL PROVISIONS INCLUDE THE BUY AMERICAN ACT CLAUSE SET FORTH IN ASPR 6 -104.5 AND THE DUTY-FREE ENTRY - CANADIAN SUPPLIES CLAUSE SET FORTH IN ASPR 6-605.2 APPLICABLE TO CANADIAN SUPPLIES ON DEPARTMENTAL LISTS MAINTAINED PURSUANT TO ASPR 6-103.5(A).

IN THE BUY AMERICAN ACT CLAUSE A DOMESTIC SOURCE END PRODUCT IS DEFINED AS "(A) AN UNMANUFACTURED END PRODUCT WHICH HAS BEEN MINED OR PRODUCED IN THE UNITED STATES AND (B) 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." FURTHER, THE CLAUSE INCLUDES A NOTATION THAT BIDS OFFERING DOMESTIC SOURCE END PRODUCTS NORMALLY WILL BE EVALUATED AGAINST BIDS OFFERING OTHER END PRODUCTS BY ADDING A FACTOR OF FIFTY PERCENT TO THE LATTER, EXCLUSIVE OF DUTIES.

ON MARCH 31, 1971, BIDS WERE OPENED AS SCHEDULED. DOMINION OFFERED THE LOWEST UNIT PRICE OF $30.20; NOSTED WAS SECOND WITH A UNIT PRICE OF $32.62; AND YOU WERE THIRD WITH A UNIT PRICE OF $33.46.

SINCE NOSTED'S END PRODUCT OF NORWEGIAN MANUFACTURE WAS NOT COVERED BY ANY AUTHORIZED EXEMPTION FROM THE RESTRICTIONS OF THE BUY AMERICAN ACT, NOSTED'S BID WAS EVALUATED AS A FOREIGN BID IN ACCORDANCE WITH THE PROVISIONS OF ASPR 6-104.4(B). UNDER SUCH PROVISIONS, NOSTED'S BID PRICE OF $323,553.24 FOR THE TOTAL PROCUREMENT QUANTITY OF 10,042 UNITS (EXCLUDING DUTY OF 40 CENTS PER UNIT) WAS INCREASED BY A FIFTY PERCENT DIFFERENTIAL OF $161,776.62 TO $485,329.86. FURTHER, AFTER ADDITION OF FREIGHT COSTS IN THE AMOUNT OF $11,146.19, THE TOTAL EVALUATED BID WAS $496,476.05, WHICH EXCEEDED ALL OTHER EVALUATED BIDS. SINCE NOSTED'S BID THEREFORE IS NOT IN LINE FOR AWARD, NO FURTHER CONSIDERATION NEED BE GIVEN TO THAT PORTION OF YOUR PROTEST.

BECAUSE DOMINION'S END PRODUCTS OF CANADIAN MANUFACTURE ARE EXCLUDED BY ASPR 6-103.5(A) FROM THE BUY AMERICAN ACT RESTRICTIONS, NO DIFFERENTIAL WAS APPLIED TO ITS BID. HOWEVER, IN ACCORDANCE WITH THE PROVISIONS OF THE IFB RELATING TO CANADIAN BIDS, THERE WAS ADDED TO DOMINION'S BID OF $303,268.40 THE AMOUNT OF $24,261.46 FOR UNITED STATES MANUFACTURER'S EXCISE TAX WHICH, TOGETHER WITH THE AMOUNT OF $15,903.11 ADDED FOR FREIGHT COSTS, PRODUCED A TOTAL EVALUATED BID PRICE OF $343,432.97.

YOUR BID OF $33.46 PER UNIT TOTALLED $336,005.32. FROM THIS AMOUNT THE PROMPT PAYMENT DISCOUNT OF 1/2 PERCENT OFFERED BY YOU, AMOUNTING TO $1,680.03, WAS DEDUCTED, AND TO THE DISCOUNTED PRICE OF $334,325.29 THERE WAS ADDED THE AMOUNT OF $10,682.39 FOR FREIGHT COSTS. YOUR EVALUATED BID PRICE, THEREFORE, AMOUNTED TO $345,007.68, OR $1,574.71 HIGHER THAN DOMINION'S EVALUATED BID PRICE.

THE ONLY OTHER BID SUBMITTED UNDER THE IFB, FROM AMERICAN CHAIN AND CABLE COMPANY, INC., WAS HIGHER THAN YOUR BID BUT LOWER THAN THE EVALUATED BID OF NOSTED.

FROM THE FOREGOING, IT IS APPARENT THAT, UPON EVALUATION OF THE BIDS IN QUESTION IN ACCORDANCE WITH THE TERMS OF THE IFB AND THE APPLICABLE PROCUREMENT REGULATIONS, DOMINION'S BID WAS LOWEST. IN THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS TO QUESTION AWARD BASED ON THE BID SUBMITTED BY DOMINION, WHICH WAS ENDORSED BY THE CANADIAN COMMERCIAL CORPORATION PRIOR TO BID OPENING AS REQUIRED BY ASPR 6 504.1(B)(2), PROVIDED THAT THE BID IS DETERMINED TO BE RESPONSIVE AND THE BIDDER RESPONSIBLE. YOUR PROTEST IS THEREFORE DENIED.