B-177649, MAR 12, 1973

B-177649, MAR 12, 1973

BID PROTEST - BUY AMERICAN REQUIREMENT - PRICE ADJUSTMENT DECISION CONCERNING THE PROTEST BY BECKMAN INSTRUMENTS, INC., RELATING TO THE ITEM DELIVERED UNDER A CONTRACT AWARDED TO INTERTECHNIQUE INSTRUMENTS, INC., PURSUANT TO A SOLICITATION ISSUED BY THE ATOMIC ENERGY COMMISSION. SINCE INTERTECHNIQUE HAD DELIVERED A FOREIGN END PRODUCT IN VIOLATION OF THE BUY AMERICAN CERTIFICATE OF ITS BID, WHICH STATED THAT A DOMESTIC SOURCE END PRODUCT WOULD BE FURNISHED, AND SINCE IT IS NOT PRACTICAL TO REMOVE THE FOREIGN PRODUCT WHICH HAS BEEN FURNISHED THE GOVERNMENT IN THE PLACE OF A DOMESTIC PRODUCT REQUIRED BY THE BUY AMERICAN ACT, 41, U.S.C. 10A-D, THE CONTRACT PRICE SHOULD THEREFORE BE ADJUSTED BY THE DIFFERENCE IN COST OF THE REQUIRED DOMESTIC PRODUCT AND THE COST OF THE FOREIGN PRODUCT DELIVERED. 39 COMP. GEN. 599 (1960).

TO DR. DIXY LEE RAY:

REFERENCE IS MADE TO THE LETTER DATED JANUARY 16, 1973, AND ENCLOSURE, FROM THE DIRECTOR, DIVISION OF CONTRACTS, REPORTING ON THE PROTEST BY BECKMAN INSTRUMENTS, INC., CONCERNING THE ITEM DELIVERED UNDER A CONTRACT AWARDED TO INTERTECHNIQUE INSTRUMENTS, INC., PURSUANT TO SOLICITATION NO. HS6-72-4055, ISSUED BY THE COMMISSION FOR A LIQUID SCINTILLATION SPECTROMETER.

IN ITS PROTEST, BECKMAN ALLEGED THAT INTERTECHNIQUE HAD DELIVERED A FOREIGN END PRODUCT, AND THEREBY VIOLATED THE BUY AMERICAN CERTIFICATE OF ITS BID WHICH STATED THAT A DOMESTIC SOURCE END PRODUCT WOULD BE FURNISHED. THE MATERIAL ENCLOSED WITH THE REPORT OF JANUARY 16 SHOWS THAT INTERTECHNIQUE ADMITS TO HAVING FURNISHED A FOREIGN END PRODUCT DUE TO A MISTAKE IN THE SHIPMENT OF THE UNIT. INTERTECHNIQUE HAS FURTHER STATED THAT A UNIT CONTAINING A DOMESTIC ELECTRONIC MODULE, WHICH COMPONENT CONSTITUTES 75 PERCENT OF THE TOTAL COST OF THAT UNIT, WAS TO HAVE BEEN SHIPPED INSTEAD OF THE UNIT DELIVERED, WHICH CONTAINED A FRENCH ELECTRONIC MODULE THAT REPRESENTED 70 PERCENT OF THE TOTAL COST OF SUCH UNIT. ALTHOUGH THE CONTRACTOR HAS EXPRESSED A WILLINGNESS TO REPLACE THE FRENCH ELECTRONIC MODULE WITH A DOMESTIC ELECTRONIC MODULE, IT IS REPORTED THAT SINCE MUCH TIME AND COST HAVE BEEN EXPENDED IN CALIBRATING AND INSTALLING THE PRESENT UNIT, WHICH IS WORKING WELL, AN EXCHANGE WOULD NOT BE IN THE BEST INTEREST OF THE FACILITY WHICH IS USING THE UNIT.

OUR OFFICE HAS HELD THAT WHERE, AS HERE, IT IS NOT PRACTICAL TO REMOVE FOREIGN MATERIALS WHICH HAVE BEEN FURNISHED THE GOVERNMENT IN THE PLACE OF DOMESTIC SOURCE END PRODUCTS REQUIRED BY THE BUY AMERICAN PROVISIONS OF THE CONTRACT OR STATUTE, 41 U.S.C. 10A-D, THE CONTRACT PRICE SHOULD BE ADJUSTED BY THE DIFFERENCE IN COST OF DOMESTIC PRODUCTS OF THE QUALITY AND QUANTITY INVOLVED AND THE COST OF THE FOREIGN PRODUCTS DELIVERED. SEE 39 COMP. GEN. 599 (1960), 42 ID. 401 (1963) AND B-154501, AUGUST 11, 1964.

SINCE THE RECORD INDICATES THAT THE COMPANY STANDS TO PROFIT FROM HAVING FURNISHED A FOREIGN UNIT INSTEAD OF THE DOMESTIC SOURCE END PRODUCT CONTRACTED FOR, YOUR AGENCY SHOULD DETERMINE THE DIFFERENCE IN COST TO THE CONTRACTOR BETWEEN FURNISHING THE FOREIGN SPECTROMETER AND A DOMESTIC UNIT AND EFFECT A CORRESPONDING REDUCTION IN THE CONTRACT PRICE.

A COPY OF THIS DECISION SHOULD BE FILED WITH THE CONTRACT.