B-173691, OCT 20, 1971, 51 COMP GEN 217

B-173691: Oct 20, 1971

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TRAVEL EXPENSES ADDED - IS NOT SUBJECT TO THE BUY AMERICAN ACT. EVEN IF THE MODEL WERE TO BE CONSIDERED AN END PRODUCT AND FOR PUBLIC USE. THE RESTRICTIONS OF THE ACT WOULD NOT APPLY SINCE THERE IS NO ABSOLUTE PROHIBITION AGAINST THE PROCUREMENT OF OTHER THAN DOMESTIC SUPPLIES AND MATERIALS FOR PUBLIC USE. AS THE COST OF THE MODEL AFTER APPLYING THE 50 PERCENT DIFFERENTIAL PRESCRIBED BY PARAGRAPH 6 104.4 OF THE ARMED SERVICES PROCUREMENT REGULATION IS THE LOWEST. THE AWARD TO THE SUBCONTRACTOR WAS IN THE PUBLIC INTEREST. THE CONTRACTOR IS BELL AEROSPACE COMPANY (BELL). THE COST- REIMBURSEMENT RESEARCH AND DEVELOPMENT CONTRACT INVOLVED IS N00024-71-C- 0276 WITH THE NAVAL SHIP SYSTEMS COMMAND (NSSC).

B-173691, OCT 20, 1971, 51 COMP GEN 217

BIDS - BUY AMERICAN ACT - RESTRICTIONS NOT FOR APPLICATION - FOREIGN SUBCONTRACTOR - PRODUCT NOT END COMPONENT THE PROCUREMENT BY A GOVERNMENT PRIME CONTRACTOR, WITH THE APPROVAL OF THE CONTRACTING OFFICER, OF A FOREIGN PRODUCED SCALE MODEL OF AN AMPHIBIOUS ASSAULT LANDING CRAFT AS AN AID TO PERFORM A COST REIMBURSEMENT RESEARCH AND DEVELOPMENT CONTRACT - A MODEL TECHNICALLY SUPERIOR TO DOMESTICALLY OFFERED MODELS AND OFFERED AT THE LOWEST COST, EVEN WITH A 50 PERCENT DIFFERENTIAL, TRANSPORTATION, AND TRAVEL EXPENSES ADDED - IS NOT SUBJECT TO THE BUY AMERICAN ACT, 41 U.S.C. 10A D. EVEN IF THE MODEL WERE TO BE CONSIDERED AN END PRODUCT AND FOR PUBLIC USE, THE RESTRICTIONS OF THE ACT WOULD NOT APPLY SINCE THERE IS NO ABSOLUTE PROHIBITION AGAINST THE PROCUREMENT OF OTHER THAN DOMESTIC SUPPLIES AND MATERIALS FOR PUBLIC USE, AND AS THE COST OF THE MODEL AFTER APPLYING THE 50 PERCENT DIFFERENTIAL PRESCRIBED BY PARAGRAPH 6 104.4 OF THE ARMED SERVICES PROCUREMENT REGULATION IS THE LOWEST, THE AWARD TO THE SUBCONTRACTOR WAS IN THE PUBLIC INTEREST.

TO THE CENTRO CORPORATION, OCTOBER 20, 1971:

WE REFER TO A LETTER OF AUGUST 24, 1971, FROM YOUR ATTORNEYS PROTESTING THE PROCUREMENT BY A GOVERNMENT PRIME CONTRACTOR OF A 1/6 SCALE MODEL OF AN AMPHIBIOUS ASSAULT LANDING CRAFT FROM BRITISH HOVERCRAFT CORPORATION, LTD. THE CONTRACTOR IS BELL AEROSPACE COMPANY (BELL), AND THE COST- REIMBURSEMENT RESEARCH AND DEVELOPMENT CONTRACT INVOLVED IS N00024-71-C- 0276 WITH THE NAVAL SHIP SYSTEMS COMMAND (NSSC).

THE SUBSTANCE OF YOUR ORIGINAL PROTEST, WHICH WAS CONSIDERED BY NSSC, IS THAT SINCE THERE ARE DOMESTIC FIRMS, ONE OF WHOM IS CENTRO CORPORATION OF DAYTON, OHIO, WHO ARE CAPABLE OF PRODUCING THE SCALE MODEL, THE BUY AMERICAN ACT, 41 U.S.C. 10A-D, SHOULD BE INVOKED TO PRECLUDE PROCUREMENT OF THE ITEM FROM ANY NONDOMESTIC SOURCE. NSSC HAS ADVISED YOU OF ITS OPINION THAT THE SCALE MODEL IS NOT THE END PRODUCT BEING PROCURED BY THE GOVERNMENT UNDER ITS CONTRACT WITH BELL, SINCE IT IS NOT TO BE DELIVERED TO THE GOVERNMENT FOR PUBLIC USE BUT TO BELL FOR ITS OWN USE, AND THAT IT THEREFORE DOES NOT FALL WITHIN THE COVERAGE OF THE BUY AMERICAN ACT. HOWEVER, YOU CONTEND THAT THE SCALE MODEL IS GOVERNMENT PROPERTY ACQUIRED FOR "PUBLIC USE," AND THAT IT DOES NOT QUALIFY AS A DOMESTIC SOURCE END PRODUCT UNDER THE GOVERNMENT PROCUREMENT REGULATIONS; I.E., AND END PRODUCT MANUFACTURED IN THE UNITED STATES IF THE COST OF ITS COMPONENTS WHICH ARE MANUFACTURED IN THE UNITED STATES EXCEEDS 50 PERCENT OF THE COST OF ALL OF ITS COMPONENTS.

BELL'S CONTRACT CALLS FOR THE DETAILED DESIGN AND CONSTRUCTION OF TWO EXPERIMENTAL AMPHIBIOUS ASSAULT LANDING CRAFT (AALC); FOR PROVISION OF A TEST AND TRIALS INSTRUMENTATION SYSTEM; FOR TESTING OF THE AALC; FOR SUPPORT OF NAVY TRIALS OF THE AALC; AND FOR RELATED DATA. CRAFT MODELS REQUIRED BY THE CONTRACT TO BE DELIVERED TO THE GOVERNMENT INCLUDE A DISPLAY MODEL (SCALE 1/4 INCH 1 FOOT) AND A MODEL SUITABLE FOR TOW TANK TESTS TO BE CONDUCTED AT GOVERNMENT FACILITIES IN A CONTROLLED ENVIRONMENT, NEITHER OF WHICH MODELS IS THE 1/6 SCALE MODEL COVERED BY BELL'S SUBCONTRACT WITH BRITISH HOVERCRAFT.

THE CONTRACT INCLUDES, AMONG OTHER PROVISIONS, A SUBCONTRACT CLAUSE REQUIRING ADVANCE WRITTEN APPROVAL OF THE CONTRACTING OFFICER OF AWARDS OF ANY FIXED PRICE SUBCONTRACTS IN EXCESS OF $25,000 OR 5 PERCENT OF THE VALUE OF THE CONTRACT; A GOVERNMENT PROPERTY CLAUSE PROVIDING FOR PASSAGE TO THE GOVERNMENT OF TITLE TO ALL PROPERTY PURCHASED BY THE CONTRACTOR FOR WHICH HE IS ENTITLED TO REIMBURSEMENT; AND THE BUY AMERICAN ACT CLAUSE PRESCRIBED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 6-104.5 AND 7- 204.3 READING AS FOLLOWS:

BUY AMERICAN ACT (1964 MAY)

(A) IN ACQUIRING END PRODUCTS, THE BUY AMERICAN ACT (41 U.S.C. 10A D) PROVIDES THAT THE GOVERNMENT GIVE PREFERENCE TO DOMESTIC SOURCE END PRODUCTS. FOR THE PURPOSE OF THIS CLAUSE:

(I) "COMPONENTS" MEANS THOSE ARTICLES, MATERIALS, AND SUPPLIES, WHICH ARE DIRECTLY INCORPORATED IN THE END PRODUCTS;

(II) "END PRODUCTS" MEANS THOSE ARTICLES, MATERIALS, AND SUPPLIES, WHICH ARE TO BE ACQUIRED UNDER THIS CONTRACT FOR PUBLIC USE; AND

(III) A "DOMESTIC SOURCE END PRODUCT" MEANS (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. FOR THE PURPOSES OF THIS (A)(III)(B), COMPONENTS OF FOREIGN ORIGIN OF THE SAME TYPE OR KIND AS THE PRODUCTS REFERRED TO IN (B)(II) OR (III) OF THIS CLAUSE SHALL BE TREATED AS COMPONENTS MINED, PRODUCED, OR MANUFACTURED IN THE UNITED STATES.

(B) THE CONTRACTOR AGREES THAT THERE WILL BE DELIVERED UNDER THIS CONTRACT ONLY DOMESTIC SOURCE END PRODUCTS, EXCEPT END PRODUCTS:

(I) WHICH ARE FOR USE OUTSIDE THE UNITED STATES;

(II) WHICH THE GOVERNMENT DETERMINES ARE NOT MINED, PRODUCED, OR MANUFACTURED IN THE UNITED STATES IN SUFFICIENT AND REASONABLY AVAILABLE COMMERCIAL QUANTITIES AND OF A SATISFACTORY QUALITY;

(III) AS TO WHICH THE SECRETARY DETERMINES THE DOMESTIC PREFERENCE TO BE INCONSISTENT WITH THE PUBLIC INTEREST; OR

(IV) AS TO WHICH THE SECRETARY DETERMINES THE COST TO THE GOVERNMENT TO BE UNREASONABLE.

(THE FOREGOING REQUIREMENTS ARE ADMINISTERED IN ACCORDANCE WITH EXECUTIVE ORDER NO. 10582, DATED DECEMBER 17, 1954. SO AS TO ALLEVIATE THE IMPACT OF DEPARTMENT OF DEFENSE EXPENDITURES ON THE UNITED STATES BALANCE OF INTERNATIONAL PAYMENTS, BIDS OFFERING DOMESTIC SOURCE END PRODUCTS NORMALLY WILL BE EVALUATED AGAINST BIDS OFFERING OTHER END PRODUCTS BY ADDING A FACTOR OF FIFTY PERCENT (50%) TO THE LATTER, EXCLUSIVE OF IMPORT DUTIES. DETAILS OF THE EVALUATION PROCEDURE ARE SET FORTH IN SECTION VI OF THE ARMED SERVICES PROCUREMENT REGULATION.)

THE RECORD SHOWS THAT BELL'S PRIME CONTRACT IS PART OF PHASE II OF THE NAVY'S THREE-PHASE AMPHIBIOUS ASSAULT LANDING CRAFT PROGRAM, WHICH HAS BEEN UNDERTAKEN TO DEFINE, DEVELOP, TEST, EVALUATE AND DOCUMENT THE PERFORMANCE OF A NEW TYPE OF AALC. IN PHASE I OF THE PROGRAM, BELL AND ANOTHER FIRM, AEROJET GENERAL CORPORATION (AEROJET), WERE AWARDED INDEPENDENT COST REIMBURSEMENT CONTRACTS TO DEVELOP A PRELIMINARY AALC DESIGN USING THE AIR CUSHION PRINCIPLE AND TO PROVIDE DATA, MODEL TEST RESULTS AND A FULL SCALE MOCK-UP OF THE CRAFT. A MAJOR OBJECTIVE OF THE INITIAL CONTRACTS, NSSC STATES, WAS TO DEFINE THE CHARACTERISTICS OF A PROTOTYPE TEST CRAFT TO BE CONSTRUCTED AND TESTED UNDER PHASE II OF THE PROGRAM IN ORDER TO ASSESS THE CRAFT'S PERFORMANCE LEVELS IN VARIOUS SEA STATES AS WELL AS ITS FEASIBILITY FOR USE IN AMPHIBIOUS ASSAULT OPERATIONS. IN PHASE II OF THE PROGRAM, AEROJET RECEIVED A CONTRACT WITH THE SAME GENERAL PROVISIONS AS BELL'S PHASE II CONTRACT. EACH CONTRACT CONSTITUTES AN EXTENSION OF THE SEPARATE DEVELOPMENT EFFORTS OF THE RESPECTIVE CONTRACTOR UNDER PHASE I.

IN BELL'S REPORT TO THE NAVY ON ITS PHASE I CONTRACT EFFORTS, BELL PROPOSED TO USE A 1/6 SCALE RADIO CONTROLLED MODEL IN VARIOUS TESTS TO GATHER INFORMATION DEALING WITH THE CRAFT DESIGN AND PERFORMANCE. AEROJET PURSUED A DIFFERENT METHOD TO ACHIEVE THE SAME OBJECTIVES. IN SOLICITING A PROPOSAL FROM EACH CONTRACTOR FOR A PHASE II CONTRACT, NSSC STATES THAT IT INTENDED TO ALLOW EACH CONTRACTOR, WITH AS LITTLE CONSTRAINT AS POSSIBLE, TO FURNISH A DETAILED DESIGN OF AN EXPERIMENTAL AALC AND TO CONSTRUCT AND TEST SUCH CRAFT. IN ADDITION, THE STATING OF SPECIFIC REQUIREMENTS NOT RELATED TO PERFORMANCES WERE AVOIDED TO THE MAXIMUM EXTENT POSSIBLE IN THE GOVERNMENT'S STATEMENT OF WORK AND SPECIFICATION EVEN THOUGH THEY WERE INCLUDED IN THE PHASE I REPORTS SUBMITTED BY THE CONTRACTORS. THE PROPOSAL SUBMITTED BY BELL UNDER PHASE II OF THE PROGRAM INCLUDED A PROVISION FOR PROCUREMENT OF A 1/6 SCALE MODEL.

IN A LETTER DATED JULY 9, 1971, BELL SUBMITTED TO THE CONTRACTING OFFICER A REQUEST FOR PERMISSION TO PURCHASE FROM BRITISH HOVERCRAFT THE 1/6 RADIO CONTROLLED SCALE MODEL WITH DRAWINGS AND TEST DATA. IN THE LETTER, WHICH WAS ACCOMPANIED BY SUPPORTING DOCUMENTATION, BELL STATED THAT IT HAD DETERMINED THAT BRITISH HOVERCRAFT WAS TECHNICALLY MOST COMPETENT TO PERFORM THE SUBCONTRACT AND THAT BRITISH HOVERCRAFT HAD SUBMITTED THE LOWEST PRICED PROPOSAL IN COMPETITION WITH CENTRO CORPORATION AND TWO OTHER DOMESTIC CONCERNS. THE PROPOSALS RECEIVED BY BELL WERE AS FOLLOWS:

5 MONTHS 6 MONTHS

OFFEROR DELIVERY DELIVERY

BRITISH HOVERCRAFT *$119,688 *$111,288

CENTRO CORPORATION 257,129 214,274

H&H INDUSTRIES, INC. 229,040

ATKINS AND MERRILL, INC. 370,601

*PRICE INCLUDES $1,296 FOR COST OF TRANSPORTATION BY SHIP TO NEW ORLEANS.

IN EVALUATING THE ABOVE PROPOSALS, BELL ADDED TO THE BRITISH HOVERCRAFT PRICE OF $119,688, FOR DELIVERY WITHIN 5 MONTHS, A 50 PERCENT DIFFERENTIAL, PURSUANT TO THE PROVISIONS OF ASPR 6-104.4, THEREBY INCREASING THAT FIRM'S EVALUATED PRICE TO $179,532. FURTHER, BELL'S EVALUATION TEAM GAVE CONSIDERATION TO THE FACTOR OF ADDITIONAL EXPENSE OF LIAISON TRIPS TO BRITISH HOVERCRAFT AS OPPOSED TO UNITED STATES SOURCES ($3,000 VS. $750) AND OTHER FACTORS, INCLUDING THOSE WHICH MIGHT AFFECT PERFORMANCE BY BRITISH HOVERCRAFT. UPON COMPLETION OF ITS CONSIDERATIONS OF THE VARIOUS FACTORS, BELL'S EVALUATION TEAM CONCLUDED THAT THE WIDE VARIANCE BETWEEN THE ACTUAL COST OF THE FOREIGN MODEL AND THE COST OF A DOMESTIC PRODUCT, AND THE TECHNICAL SUPERIORITY OF THE PROPOSAL FOR THE BRITISH HOVERCRAFT MODEL, WERE SUFFICIENT TO OUTWEIGH ANY NEGATIVE CONSIDERATIONS WITH RESPECT TO AN AWARD TO BRITISH HOVERCRAFT.

BY LETTER OF JULY 16, 1971, THE CONTRACTING OFFICER ADVISED BELL OF HIS CONSENT TO AWARD OF THE SUBCONTRACT TO BRITISH HOVERCRAFT. ON AUGUST 10, BELL ISSUED A PURCHASE ORDER FOR DELIVERY OF THE MODEL WITHIN 6 MONTHS, F.O.B. BRITISH HOVERCRAFT'S PLANT, AT A TOTAL PRICE OF $109,992.

IN A REPORT TO OUR OFFICE, NSSC ADHERES TO ITS POSITION THAT THE SCALE MODEL IS NOT AN END PRODUCT PROCURED FOR PUBLIC USE AS CONTEMPLATED BY THE BUY AMERICAN ACT BUT IS ONLY AN ITEM OF PRIMARY USEFULNESS TO THE CONTRACTOR FOR THE PURPOSE OF CONDUCTING THE TESTS DISCUSSED ABOVE. AFTER THE MODEL IS TURNED OVER TO THE GOVERNMENT, NSSC STATES, IT WILL BE AVAILABLE FOR TESTS IN ORDER TO VERIFY THE CONTRACTOR'S TEST RESULTS BASED ON THE SAME MODEL; HOWEVER, THE GOVERNMENT'S USE WILL, IF ANYTHING, BE INCIDENTAL TO THE CONTRACTOR'S USE AND THEREFORE NOT ENCOMPASSED BY THE TERM "PUBLIC USE" IN THE BUY AMERICAN ACT.

NSSC FURTHER STATES THAT EVEN IF THE 1/6 SCALE MODEL IS CONSIDERED TO BE AN END PRODUCT WITHIN THE PURVIEW OF THE BUY AMERICAN ACT, THERE HAS BEEN COMPLIANCE WITH THE REQUIREMENTS OF THE ACT AS IMPLEMENTED BY EXECUTIVE ORDER 10582 AND ASPR. IN THIS REGARD, IT IS STRESSED THAT ALTHOUGH BELL ADDED TO BRITISH HOVERCRAFT'S PRICE A 50 PERCENT DIFFERENTIAL FOR EVALUATION PURPOSES, BRITISH HOVERCRAFT'S EVALUATED PRICE WAS SUBSTANTIALLY LOWER THAN ALL OTHER OFFERS.

NSSC FURTHER URGES THAT IF THE 1/6 SCALE MODEL IS CONSIDERED TO BE A COMPONENT OF THE AALC'S, ITS COST IS LESS THAN 50 PERCENT OF THE TOTAL COST OF ALL COMPONENTS OF THE END PRODUCTS, AND ITS PROCUREMENT FROM A FOREIGN SOURCE IS THEREFORE PERMITTED BY SECTION 2 OF THE BUY AMERICAN ACT. ACCORDINGLY, AND FOR THE OTHER REASONS STATED ABOVE, NSSC CONTENDS THAT THERE HAS BEEN NO VIOLATION OF THE BUY AMERICAN ACT IN THE PURCHASE OF THE 1/6 SCALE RADIO CONTROLLED MODEL OF THE AALC FROM BRITISH HOVERCRAFT.

THE BUY AMERICAN ACT DOES NOT STATE AN ABSOLUTE PROHIBITION AGAINST THE PROCUREMENT FOR THE GOVERNMENT OF OTHER THAN DOMESTIC SUPPLIES AND MATERIALS FOR PUBLIC USE. RATHER, IT EXPRESSLY PROVIDES THAT THE RESTRICTIONS AGAINST THE PURCHASE OF FOREIGN PRODUCTS DO NOT APPLY WHERE IT IS DETERMINED THAT THE COST OF DOMESTIC PRODUCTS IS UNREASONABLE OR THEIR PROCUREMENT IS INCONSISTENT WITH THE PUBLIC INTEREST. 42 COMP. GEN. 467 (1963). IN IMPLEMENTATION OF THE ACT, ASPR 6-104.4, RELATING TO EVALUATION OF BIDS AND PROPOSALS, INCLUDES THE FOLLOWING PERTINENT PROVISIONS:

6-104.4 EVALUATION OF BIDS AND PROPOSALS.

(A) IN ACCORDANCE WITH THE BUY AMERICAN ACT, THE SECRETARY OF DEFENSE HAS DETERMINED THAT WHERE THE FOLLOWING PROCEDURES RESULT IN THE ACQUISITION OF FOREIGN END PRODUCTS, THE ACQUISITION OF DOMESTIC SOURCE END PRODUCTS WOULD BE (I) UNREASONABLE IN COST OR (II) INCONSISTENT WITH THE PUBLIC INTEREST (SEE 6-103.3 AND 6-103.5).

(B) EXCEPT AS PROVIDED IN (D) BELOW, BIDS AND PROPOSALS SHALL BE EVALUATED SO AS TO GIVE PREFERENCE TO DOMESTIC BIDS. EACH FOREIGN BID (OTHER THAN A LOW BID OFFERING A CANADIAN END PRODUCT) SHALL BE ADJUSTED FOR PURPOSES OF EVALUATION EITHER BY EXCLUDING ANY DUTY FROM THE FOREIGN BID AND ADDING 50 PERCENT OF THE BID (EXCLUSIVE OF DUTY) TO THE REMAINDER, OR BY ADDING TO THE FOREIGN BID (INCLUSIVE OF DUTY) A FACTOR OF 6 PERCENT OF THAT BID, WHICHEVER RESULTS IN THE GREATER EVALUATED PRICE, EXCEPT THAT A 12 PERCENT FACTOR SHALL BE USED INSTEAD OF THE 6 PERCENT FACTOR IF (I) THE FIRM SUBMITTING THE LOW ACCEPTABLE DOMESTIC BID IS A SMALL BUSINESS CONCERN, OR A LABOR SURPLUS AREA CONCERN, OR BOTH, (II) SMALL PURCHASE PROCEDURES (SEE SECTION III, PART 6) ARE NOT USED, AND (III) ANY CONTRACT AWARD TO A DOMESTIC CONCERN WHICH WOULD RESULT FROM APPLYING THE 12 PERCENT FACTOR, BUT WHICH WOULD NOT RESULT FROM APPLYING THE 6 PERCENT OR 50 PERCENT FACTOR, WOULD NOT EXCEED $100,000. (IF AN AWARD FOR MORE THAN $100,000 WOULD BE MADE TO A DOMESTIC CONCERN IF THE 12 PERCENT FACTOR IS APPLIED, BUT WOULD NOT BE MADE IF THE 6 PERCENT OR 50 PERCENT FACTOR IS APPLIED, THE MATTER SHALL BE SUBMITTED TO THE SECRETARY OF THE DEPARTMENT CONCERNED FOR A DECISION AS TO WHETHER THE AWARD TO THE SMALL BUSINESS OR LABOR SURPLUS AREA CONCERN WOULD INVOLVE UNREASONABLE COST OR INCONSISTENCY WITH THE PUBLIC INTEREST (SEE 6-103.3).) SINCE THE 1/6 SCALE MODEL IS NOT TO BE DIRECTLY INCORPORATED IN ANY OTHER ITEM TO BE FURNISHED TO THE GOVERNMENT UNDER BELL'S CONTRACT, THE MODEL DOES NOT CONSTITUTE A COMPONENT OF AN END PRODUCT AS DEFINED IN THE BUY AMERICAN ACT CLAUSE, AND THE COMPONENT COST RULE SET FORTH IN THAT CLAUSE IS NOT FOR APPLICATION TO THE PROCUREMENT OF THE SCALE MODEL.

AS TO WHETHER THE MODEL CONSTITUTES AN END PRODUCT FOR PUBLIC USE WITHIN THE PURVIEW OF THE BUY AMERICAN ACT AND ASPR, WE DO NOT BELIEVE THAT A RESOLUTION OF SUCH QUESTION IS REQUIRED. AS SHOWN ABOVE, PROCUREMENT OF THE BRITISH HOVERCRAFT MODEL WOULD HAVE BEEN PROPER, EVEN IF THE 1/6 SCALE MODEL COULD BE REGARDED AS AN END PRODUCT, SINCE THE EVALUATED PRICE OF THAT MODEL IS STILL LOWER THAN THE PRICES OF THE DOMESTIC MODELS AFTER APPLYING THE 50 PERCENT FOREIGN DIFFERENTIAL FACTOR PRESCRIBED BY ASPR 6- 104.4. THIS ASPR PROVISION STATES THAT, THE SECRETARY OF DEFENSE HAS DETERMINED THAT WHERE THE EVALUATION PROCEDURES SET OUT THEREIN RESULTS IN THE ACQUISITION OF FOREIGN END PRODUCTS, THE ACQUISITION OF DOMESTIC SOURCE END PRODUCTS WOULD BE UNREASONABLE IN COST OR INCONSISTENT WITH THE PUBLIC INTEREST. SUCH DETERMINATIONS BY THE HEADS OF THE DEPARTMENTS, WHICH SERVE TO EXEMPT THE PROCUREMENTS CONCERNED FROM THE RESTRICTIONS OF THE BUY AMERICAN ACT, ARE SPECIFICALLY AUTHORIZED BY THAT ACT. 41 U.S.C. 10A.

ACCORDINGLY, WE ARE UNABLE TO CONCLUDE THAT THERE HAS BEEN ANY VIOLATION OF THE BUY AMERICAN ACT OR THE IMPLEMENTING REGULATIONS, AND WE THEREFORE DO NOT FIND ANY LEGAL BASIS FOR QUESTIONING THE AWARD OF THE SUBCONTRACT FOR THE 1/6 SCALE MODEL TO BRITISH HOVERCRAFT.

IN VIEW OF THE FOREGOING, YOUR PROTEST IS DENIED.