B-177650(1), APR 9, 1973

B-177650(1): Apr 9, 1973

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BID PROTEST DECISION DENYING PROTEST ON BASIS IT WAS THE LOWEST EVALUATED BIDDER UNDER THE IFB. TO ENVIRONMENTAL SYSTEMS DEVELOPMENT CORPORATION: REFERENCE IS MADE TO LETTERS DATED JANUARY 8. FOUR BIDS WERE RECEIVED AND OPENED ON DECEMBER 7. 170 WAS SUBMITTED BY DRICLAD LIMITED WHICH CERTIFIED THAT EACH END PRODUCT WAS A FOREIGN END PRODUCT FOR PURPOSES OF THE BUY AMERICAN ACT. 355 WAS SUBMITTED BY YOUR FIRM. 205 WERE SUBMITTED BY ROYTRAN INTERNATIONAL CORPORATION AND ENVIROPAK. 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 *** OR BOTH ***. AWARD OF THE CONTRACT IS BEING HELD IN ABEYANCE PENDING A DECISION BY OUR OFFICE ON THE PROTEST.

B-177650(1), APR 9, 1973

BID PROTEST DECISION DENYING PROTEST ON BASIS IT WAS THE LOWEST EVALUATED BIDDER UNDER THE IFB.

TO ENVIRONMENTAL SYSTEMS DEVELOPMENT CORPORATION:

REFERENCE IS MADE TO LETTERS DATED JANUARY 8, AND 11, 1973, FILED UNDER YOUR FORMER NAME - INTERNATIONAL SYSTEMS DEVELOPMENT CORPORATION AND TO YOUR LETTER OF MARCH 5, 1973, TO THE UNITED STATES COAST GUARD, PROTESTING THE PROPOSED AWARD OF A CONTRACT TO DRICLAD LIMITED, A FOREIGN FIRM, UNDER INVITATION FOR BIDS (IFB) NO. CG-31,696-A.

THE IFB REQUESTED BIDS FOR FURNISHING A QUANTITY OF FLEXIBLE, REUSABLE WATER-VAPORPROOF CONTAINERS FOR ADAPTS PUMPING SUBSYSTEM IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS.

FOUR BIDS WERE RECEIVED AND OPENED ON DECEMBER 7, 1972. THE LOWEST BID IN THE AMOUNT OF $13,170 WAS SUBMITTED BY DRICLAD LIMITED WHICH CERTIFIED THAT EACH END PRODUCT WAS A FOREIGN END PRODUCT FOR PURPOSES OF THE BUY AMERICAN ACT, 41 U.S.C. 10A-D. THE SECOND LOWEST BID IN THE AMOUNT OF $15,355 WAS SUBMITTED BY YOUR FIRM, A SMALL BUSINESS CONCERN. THE THIRD AND FOURTH BIDS IN THE AMOUNTS OF $17,121 AND $23,205 WERE SUBMITTED BY ROYTRAN INTERNATIONAL CORPORATION AND ENVIROPAK, INC., RESPECTIVELY.

THE CONTRACTING OFFICER ADDED TO THE DRICLAD BID A 12-PERCENT FACTOR AS REQUIRED BY SECTION 1-6.104-4(B) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), WHICH, IN PERTINENT PART, PROVIDES:

*** 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 *** OR BOTH ***.

INASMUCH AS THE APPLICATION OF THE 12 PERCENT FACTOR TO THE DRICLAD BID DOES NOT DISPLACE IT AS LOW BIDDER, THE CONTRACTING OFFICER PROPOSES TO AWARD THE CONTRACT TO DRICLAD. AWARD OF THE CONTRACT IS BEING HELD IN ABEYANCE PENDING A DECISION BY OUR OFFICE ON THE PROTEST.

YOU PROTEST THE PROPOSED AWARD TO DRICLAD ON THE GROUND THAT ITS BID WAS NOT READ AND ANNOUNCED AT BID OPENING. IT IS ALLEGED THAT THE VICE PRESIDENT OF YOUR FIRM WAS PRESENT AT BID OPENING; THAT THE ONLY OTHER PEOPLE PRESENT WERE THE BID OPENING OFFICER AND A COAST GUARD OFFICER; THAT YOUR VICE PRESIDENT WAS HANDED THE COVER LETTER TO THE BID OF ROYTRAN INTERNATIONAL WHICH LETTER, YOU STATE, CONTAINED A STATEMENT TO THE EFFECT THAT IF THE 50-PERCENT BUY AMERICAN FACTOR WAS WAIVED, THE CONTRACT COULD BE PERFORMED BY DRICLAD IN ENGLAND AT A LOWER PRICE; AND THAT ALTHOUGH ROYTRAN HAD TWO OFFERS CONTAINED IN ITS BID, ONLY ONE WAS READ AT BID OPENING.

IN REGARD TO YOUR ALLEGATIONS THAT THE BID OF DRICLAD WAS NOT ANNOUNCED AT THE BID OPENING AND THAT YOUR REPRESENTATIVE WAS GIVEN ONLY THE ROYTRAN COVER LETTER TO EXAMINE AT THE OPENING, THE BID OPENING OFFICER ADVISED THAT ALL BIDS INCLUDING DRICLAD'S WERE READ AND ANNOUNCED AT BID OPENING. FURTHER, THE BID OPENING OFFICER STATED THAT SHE HANDED ROYTRAN'S COVER LETTER AND THE BIDS OF ROYTRAN AND DRICLAD TO YOUR REPRESENTATIVE FOR EXAMINATION; AND THAT AFTER EXAMINING THE BIDS AND COVER LETTER YOUR REPRESENTATIVE REQUESTED ADVICE AS TO HOW THE BIDS WOULD BE EVALUATED. WHILE SOME DISPUTE EXISTS AS TO THE ACTUAL EVENTS THAT TRANSPIRED AT BID OPENING, THERE IS NO INDICATION OF IMPROPRIETY OR OF ACTION ADVERSE TO THE INTEREST OF ANY OF THE BIDDERS. WE BELIEVE THAT SINCE YOUR REPRESENTATIVE EXAMINED THE ROYTRAN COVER LETTER TRANSMITTING THE TWO BIDS, IT WOULD BE INCONGRUOUS TO SUPPOSE THAT THE BIDS WERE NOT EXAMINED OR THAT A REQUEST FOR EXAMINATION WOULD HAVE BEEN DENIED.

YOU MAINTAIN FURTHER THAT A PROCUREMENT FROM A FOREIGN SUPPLIER, WHEN DOMESTIC SOURCES ARE AVAILABLE, ESPECIALLY SMALL BUSINESS, IS INCONSISTENT WITH THE PUBLIC INTEREST AND AT VARIANCE WITH THE SMALL BUSINESS ACT, AS AMENDED, 15 U.S.C. 631, ET SEQ.

THE BUY AMERICAN ACT IN SUBSTANCE PROHIBITS THE PURCHASE OF RAW MATERIALS OR MANUFACTURED ARTICLES FROM FOREIGN SOURCES FOR PUBLIC USE WITHIN THE UNITED STATES UNLESS THE HEAD OF THE PROCURING AGENCY DETERMINES THAT DOMESTIC PROCUREMENT IS INCONSISTENT WITH THE PUBLIC INTEREST OR THAT THE DOMESTIC COST IS UNREASONABLE, OR UNLESS DOMESTIC MATERIALS OR PRODUCTS ARE NOT AVAILABLE IN SUFFICIENT QUANTITIES OR ARE NOT OF SATISFACTORY QUALITY. THE ACT WAS IMPLEMENTED ON DECEMBER 17, 1954, BY EXECUTIVE ORDER NO. 10582, WHICH PROVIDES THAT A DOMESTIC BID SHALL BE DEEMED UNREASONABLE AND ITS ACCEPTANCE DEEMED INCONSISTENT WITH THE PUBLIC INTEREST IF THE AMOUNT OF THE DOMESTIC BID EXCEEDS THE AMOUNT OF THE FOREIGN BID BY MORE THAN 6 PERCENT. HOWEVER, TO PROVIDE AN ADDITIONAL PREFERENCE FOR DOMESTIC SMALL BUSINESS 12-PERCENT DIFFERENTIAL IS PROVIDED BY FEDERAL PROCUREMENT REGULATIONS SECTION 1 6.104-4(B) WHEN THE LOW DOMESTIC BIDDER IS A SMALL BUSINESS FIRM. THE IMPOSITION OF THIS 12-PERCENT FACTOR IS IN FURTHERANCE OF THE POLICY TO ASSIST AMERICAN SMALL BUSINESS.

WE HAVE RECOGNIZED THAT THE GENERAL INTENT OF THE CONGRESS IN ENACTING THE BUY AMERICAN ACT WAS TO PROTECT THE AMERICAN MANUFACTURER AND WORKER. SEE 46 COMP. GEN. 47, 48 (1966). ALSO, RECOGNITION IS GIVEN TO THE FACT THAT, UNDER THE TERMS OF THE ACT AND FPR SEC. 1-6.104 4, COST IS A MATERIAL FACTOR FOR CONSIDERATION AS TO WHETHER THE PUBLIC INTEREST IS BEING SERVED WHEN FOREIGN PRODUCTS ARE OFFERED. WHILE WE ARE SYMPATHETIC TO YOUR CONTENTIONS REGARDING THE ECONOMIC EFFECT ON DOMESTIC INDUSTRY IF AWARD IS MADE TO A FOREIGN BIDDER, THE ECONOMIC IMPACT OF A PARTICULAR PROCUREMENT IS NOT A CONTROLLING FACTOR TO BE CONSIDERED IN MAKING AN AWARD UNDER COMPETITIVE BIDDING PROCEDURES. THERE IS NO SANCTION IN EXISTING LAW OR IMPLEMENTING REGULATIONS WHICH WOULD REQUIRE THE IMPOSITION OF INTANGIBLE FACTORS TO REFLECT ECONOMIC IMPACTS THAT POSSIBLY MIGHT RESULT FROM A PARTICULAR AWARD. CF. 45 COMP. GEN. 59, 68 (1965).

THEREFORE, WE CONCLUDE, ON THE RECORD, THAT NO BASIS EXISTS UPON WHICH WE COULD PROPERLY QUESTION THE ADMINISTRATIVE FINDING THAT DRICLAD IS THE LOWEST EVALUATED BIDDER UNDER THE IFB.

HOWEVER, FROM AN EXAMINATION OF THE ROYTRAN AND DRICLAD BIDS, TOGETHER WITH THE TRANSMITTAL LETTERS ACCOMPANYING THE BIDS, AND GIVEN THE FACT THAT ROYTRAN APPARENTLY SUBMITTED THE BIDS OF BOTH FIRMS, A QUESTION IS RAISED AS TO THE ACCURACY OF DRICLAD'S AND ROYTRAN'S CERTIFICATES OF INDEPENDENT PRICE DETERMINATION. WE ARE BY LETTER OF TODAY, COPY ENCLOSED, DRAWING THIS MATTER TO THE ATTENTION OF THE SECRETARY OF TRANSPORTATION FOR APPROPRIATE ACTION.