B-193810, FEBRUARY 14, 1979

B-193810, FEBRUARY 14, 1979

DIGEST: ALTHOUGH PROTESTER CONTENDS THAT AWARD TO FOREIGN FIRM IS NOT IN BEST INTEREST OF GOVERNMENT, GAO FINDS THAT PROCURING AGENCY HAS VIOLATED NO LAW OR REGULATION AND HAD PROPER BASIS FOR AWARD.

CONTINENTAL ELECTRONICS MFG. CO.:

CONTINENTAL ELECTRONICS MFG. CO. (CONTINENTAL) PROTESTS THE AWARD OF CONTRACT NO. IA-18370-23 TO BROWN BOVERI CORPORATION (BROWN) OF SWITZERLAND BY THE INTERNATIONAL COMMUNICATION AGENCY (ICA). THE CONTRACT IS FOR EIGHT 250-KILOWATT BROADCAST TRANSMITTERS WHICH WILL BE LOCATED IN THE PHILIPPINES AND LIBERIA.

CONTINENTAL CONTENDS THAT THE AWARD IS NOT IN THE BEST INTEREST OF THE GOVERNMENT SINCE BROWN IS A FOREIGN FIRM. CONTINENTAL STATES THAT THE $100,000 ADDED TO BROWN'S OFFER IS A COST TO THE U.S. TAXPAYER. CONTINENTAL FURTHER CONTENDS THAT BROWN HAS INDICATED TO ICA THAT IT WOULD MANUFACTURE THE TRANSMITTERS IN THE UNITED STATES IF IT RECEIVED THE AWARD.

FEDERAL PROCUREMENT REGULATIONS SECS. 1-6.800 TO 1-6.806 (1964 ED. AMEND. 32) PRESCRIBE THE POLICIES AND PROCEDURES TO FURTHER THE BALANCE OF PAYMENTS PROGRAM FOR PROCUREMENTS FOR USE OUTSIDE THE UNITED STATES. THE PURPOSE OF THE PROGRAM IS THE REDUCTION OF DOLLAR EXPENDITURES OUTSIDE THE UNITED STATES. SECTION 1-1.009 AUTHORIZES THE HAD OF AN AGENCY TO ALLOW A DEVIATION FROM THE REGULATIONS.

THE DIRECTOR OF THE U.S. INFORMATION AGENCY (COMBINED WITH THE BUREAU OF CULTURAL AFFAIRS OF THE DEPARTMENT OF STATE, TO BECOME ICA, EFFECTIVE APRIL 1, 1978) IN A DETERMINATION AND FINDINGS WITH REGARD TO THE BALANCE OF PAYMENTS PROGRAM DETERMINED:

"1. IT IS IN THE BEST INTERESTS OF THE UNITED STATES TO ENSURE THAT THE QUALITY OF THE MANUFACTURED TRANSMITTERS ASSUREDLY MEET THE PROCUREMENT SPECIFICATIONS AT THE LOWEST PRICE.

"2. THESE CONSIDERATIONS OF PRICE AND QUALITY ASSURANCE MANDATE THAT COMPETITIVE PROCEDURES BE FOLLOWED IN THE PROCUREMENT OF THE TRANSMITTERS.

"3. APPLICATION OF THE POLICIES AND PROCEDURES PRESCRIBED TO IMPLEMENT THE BALANCE OF PAYMENTS PROGRAM WOULD ELIMINATE COMPETITION BY RESTRICTING PROCUREMENT OF THE TRANSMITTERS TO A SINGLE U.S. SOURCE."

IN ACCORDANCE WITH THE DETERMINATION OF DECEMBER 1, 1977, THE DIRECTOR APPROVED A DEVIATION FROM THE FEDERAL PROCUREMENT REGULATIONS TO ELIMINATE THE 50-PERCENT BALANCE OF PAYMENTS DIFFERENTIAL IN FAVOR OF UNITED STATES SUPPLIERS.

A REQUEST FOR PROPOSALS WAS ISSUED ON FEBRUARY 23, 1978, AND FIVE PROPOSALS WERE RECEIVED-- ONE FROM AN AMERICAN FIRM. FOUR PROPOSALS WERE IN A COMPETITIVE RANGE AND WERE THEREFORE SUBJECT TO A TECHNICAL EVALUATION. BECAUSE ALL PROPOSALS EXCEEDED THE AGENCY'S AVAILABLE FUNDS, THE SPECIFICATIONS WERE AMENDED ON JULY 19, 1978, TO REDUCE COST. LIQUIDATED DAMAGES CLAUSE FOR DELAYED DELIVERY WAS ADDED. BEST AND FINAL OFFERS WERE RECEIVED IN SEPTEMBER. EVEN AFTER THE $100,000 EVALUATION FACTOR WAS ADDED, BROWN WAS DETERMINED TO BE THE LOW OFFEROR. ADDITION, THE TRANSMITTER THAT BROWN OFFERED IS IN REGULAR PRODUCTION AND USE AND INCLUDES TECHNICAL FEATURES WHICH, WHILE NOT REQUIRED IN THE SPECIFICATIONS, EXCEEDED THE GOVERNMENT'S REQUIREMENTS.

CONTINENTAL, THE AMERICAN FIRM, DID NOT MEET CERTAIN TECHNICAL SPECIFICATIONS. CONTINENTAL WAS ALSO NOT CONSIDERED TO BE SUCCESSFULLY COMPETITIVE BECAUSE OF ITS HIGHER COST PROPOSAL AND ITS UNWILLINGNESS TO ACCEPT THE LIQUIDATED DAMAGES CLAUSE.

BASED UPON THE FOREGOING REVIEW, WE CONCLUDE THAT ICA HAS VIOLATED NO LAW OR REGULATION. MOREOVER, ICA HAD A PROPER BASIS FOR THE AWARD TO BROWN IF FOR NO OTHER REASON THAN THAT CONTINENTAL WAS NONCOMPLIANT WITH THE SOLICITATION.

GENERALLY, OUR OFFICE WILL REQUEST A REPORT FROM THE PROCURING AGENCY UPON RECEIPT OF A BID PROTEST PURSUANT TO OUR BID PROTEST PROCEDURES. HOWEVER, WHERE IT IS CLEAR FROM A PROTESTER'S SUBMISSION THAT THE PROTEST IS LEGALLY WITHOUT MERIT, WE WILL DECIDE THE MATTER ON THAT BASIS. MEMCOM, B-191526, APRIL 6, 1978, 78-1 CPD 276.

ACCORDINGLY, THE PROTEST IS DENIED.