B-212586, JAN 26, 1984

B-212586: Jan 26, 1984

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THE PROTESTER IS NOT AN INTERESTED PARTY UNDER GAO'S BID PROTEST PROCEDURES TO COMPLAIN ABOUT THE SMALL BUSINESS AND LABOR SURPLUS AREA SET ASIDE RESTRICTIONS FOR CERTAIN OF THE ITEMS. WHICH ARE CHARACTERIZED AS "HAND- TOOLS. " GSA WILL REJECT OFFERS FROM FOREIGN COMPANIES BECAUSE THE DEPARTMENT OF DEFENSE (DOD) IS THE PREDOMINANT USER OF THE ITEMS BEING PROCURED. IT IS NOT FEASIBLE FOR GSA TO MAINTAIN DUAL SUPPLY SYSTEMS FOR CIVILIAN AND MILITARY AGENCIES. BETAKUT MAINTAINS THAT SCISSORS AND SHEARS ARE NOT "HAND TOOLS. BETAKUT NEXT CONTENDS THAT TWO OF THE REASONS STATED IN THE IFB FOR IMPOSING THE RESTRICTION DO NOT APPLY IN ANY EVENT IN THAT DOD ALLEGEDLY IS NOT THE PREDOMINANT USER OF THE ITEMS.

B-212586, JAN 26, 1984

DIGEST: 1. GENERAL SERVICES ADMINISTRATION PROPERLY RESTRICTED SOLICITATION FOR SCISSORS AND SHEARS TO DOMESTIC ITEMS WHERE APPROPRIATIONS ACT APPLICABLE TO THE PRIMARY USER, THE DEPARTMENT OF DEFENSE (DOD), PRECLUDES DOD FROM PURCHASING HAND OR MEASURING TOOLS MANUFACTURED IN A FOREIGN COUNTRY. 2. WHERE AN INVITATION PROPERLY SOLICITS DOMESTIC ITEMS ONLY, SO THAT THE PROTESTER'S OFFER OF FOREIGN MADE ITEMS COULD NOT BE ACCEPTED IN ANY EVENT, THE PROTESTER IS NOT AN INTERESTED PARTY UNDER GAO'S BID PROTEST PROCEDURES TO COMPLAIN ABOUT THE SMALL BUSINESS AND LABOR SURPLUS AREA SET ASIDE RESTRICTIONS FOR CERTAIN OF THE ITEMS.

BETAKUT USA, INC.:

BETAKUT USA, INC. PROTESTS THE REJECTION OF ITS BID UNDER INVITATION FOR BIDS (IFB) NO. FEP-AR-F0218-A-8-4-83 ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA) FOR VARIOUS QUANTITIES AND TYPES OF SCISSORS AND SHEARS. BETAKUT, WHICH OFFERED ITALIAN-MADE ITEMS, PROTESTS THE SOLICITATION REQUIREMENT THAT THE ITEMS, WHICH ARE CHARACTERIZED AS "HAND- TOOLS," BE PRODUCED DOMESTICALLY. THE PROTESTER ALSO OBJECTS TO THE SETTING ASIDE OF VARIOUS SOLICITATION ITEMS FOR SMALL BUSINESS AND SMALL BUSINESS LABOR SURPLUS AREA CONCERNS.

WE DENY THE PROTEST AGAINST THE IFB REQUIREMENT FOR DOMESTIC ITEMS, AND WE DISMISS THE PROTEST AGAINST THE SET-ASIDES.

THE SOLICITATION STATES THE CONGRESSIONAL POLICY THAT GSA PURCHASE HAND AND MEASURING TOOLS, AS DEFINED BY THE FEDERAL SUPPLY CATALOGING SYSTEM, FROM DOMESTIC SOURCES OR IN ACCORDANCE WITH DEFENSE ACQUISITION REGULATION (DAR) SEC. 6-104.4 (1976 ED.), WHICH ESTABLISHES PROCEDURES FOR EVALUATING FOREIGN-MADE SUPPLIES AGAINST DOMESTIC ONES. THE SOLICITATION FURTHER ADVISES THAT IN ACCORDANCE WITH DAR SEC. 6-104.4( D)(II), WHICH PERMITS REJECTION OF A BID FOR REASONS "OF THE NATIONAL INTEREST," GSA WILL REJECT OFFERS FROM FOREIGN COMPANIES BECAUSE THE DEPARTMENT OF DEFENSE (DOD) IS THE PREDOMINANT USER OF THE ITEMS BEING PROCURED; DOD APPROPRIATION ACTS PROHIBIT THE PURCHASE OF FOREIGN-MADE HAND OR MEASURING TOOLS; AND IT IS NOT FEASIBLE FOR GSA TO MAINTAIN DUAL SUPPLY SYSTEMS FOR CIVILIAN AND MILITARY AGENCIES.

BETAKUT MAINTAINS THAT SCISSORS AND SHEARS ARE NOT "HAND TOOLS," SO THAT THE SOLICITATION RESTRICTION TO "HAND TOOLS" MANUFACTURED OR PRODUCED WHOLLY IN THE UNITED STATES OR ITS POSSESSIONS SHOULD NOT CAUSE THE REJECTION OF AN OFFER OF FOREIGN ITEMS. BETAKUT NEXT CONTENDS THAT TWO OF THE REASONS STATED IN THE IFB FOR IMPOSING THE RESTRICTION DO NOT APPLY IN ANY EVENT IN THAT DOD ALLEGEDLY IS NOT THE PREDOMINANT USER OF THE ITEMS, AND GSA COULD EASILY MAINTAIN DUAL SUPPLY SYSTEMS FOR CIVILIAN AND MILITARY AGENCIES. FINALLY, BETAKUT ARGUES THAT THE RESTRICTION OF THE PROCUREMENT TO DOMESTIC SOURCES IMPOSES A SIGNIFICANT TRADE LIMITATION ON A NATO NATION IN VIOLATION OF THE TRADE AGREEMENTS ACT OF 1979.

BETAKUT'S FIRST POINT IS WITHOUT MERIT. SCISSORS AND SHEARS ARE INCLUDED IN THE DEFINITION OF "HAND AND MEASURING TOOLS" IN THE FEDERAL SUPPLY CATALOGING HANDBOOK, WHICH IS PUBLISHED BY THE DEFENSE LOGISTICS AGENCY AND REFERENCED IN GSA'S REGULATIONS IMPLEMENTING THE BUY AMERICAN ACT (AS WELL AS IN THE INVITATION). WE SEE NO LEGAL BASIS TO FIND SUCH A CATEGORIZATION, PREPARED BY THE AGENCY WITHIN DOD CHARGED WITH THE PRIMARY RESPONSIBILITY FOR PURCHASES OF LARGE QUANTITIES OF STANDARD EQUIPMENT, UNREASONABLE.

CONCERNING BETAKUT'S CONTENTION THAT THERE IS NO EVIDENCE THAT DOD IS THE PREDOMINANT USER OF THE ITEMS BEING PURCHASED, GSA ADVISES THAT ITS OWN RECORDS, KNOWN AS GENERAL PURPOSE DEMAND FILES, INDICATE PRECISELY HOW MUCH OF A GIVEN ITEM IS PURCHASED BY THE GOVERNMENT, INCLUDING THE PERCENTAGE PURCHASED BY DOD. THE FILE FOR FISCAL YEAR 1982 INDICATES THAT DOD'S DEMAND FOR THE ITEMS REPRESENTED 67.6 TO 99.5 PERCENT OF THE TOTAL GOVERNMENT DEMAND. THESE FIGURES OBVIOUSLY ESTABLISH THAT DOD IS THE PREDOMINANT USER OF THE ITEMS IN QUESTION.

BETAKUT NEXT CONTENDS THAT THERE IS NO EVIDENCE THAT IT IS NOT FEASIBLE FOR GSA TO MAINTAIN DUAL SUPPLY SYSTEMS FOR CIVILIAN AND MILITARY AGENCIES. GSA REPORTS THAT THE ESTABLISHMENT OF A DUAL SUPPLY SYSTEM WOULD BE UNREASONABLY COSTLY AS WELL AS UNDULY BURDENSOME. FOR EXAMPLE, GSA NOTES THAT IT WOULD BE REQUIRED TO ISSUE TWO DIFFERENT STOCK NUMBERS AND MAINTAIN TWO SEPARATE INVENTORIES FOR THE SAME ITEM, WITH THE ATTENDANT COSTS AND EFFORT OF SEPARATE WAREHOUSING AND REPROGRAMMING OF THE AUTOMATED CATALOGING AND INVENTORY MANAGEMENT SYSTEMS. CERTAINLY, GSA IS IN A BETTER POSITION THAN THE PROTESTER TO DETERMINE WHETHER A DUAL SUPPLY SYSTEM IS FEASIBLE. BETAKUT, WHICH HAS THE BURDEN OF PROOF, A.B. DICK COMPANY, B-211119.3, SEPTEMBER 22, 1983, 83-2 CPD 360, HAS NOT PRESENTED ANY EVIDENCE INDICATING THAT GSA'S POSITION IS UNREASONABLE.

REGARDING BETAKUT'S CONTENTION THAT BY RESTRICTING THE PROCUREMENT TO DOMESTICALLY-PRODUCED ITEMS GSA IS VIOLATING THE TRADE AGREEMENTS ACT OF 1979, PURCHASES MADE BY THE GSA NATIONAL TOOL CENTER ARE EXEMPT FROM THE STATUTE'S PROVISIONS. FEDERAL PROCUREMENT REGULATIONS AT 41 C. F.R. SEC. 1-6.1613 (1983).

FINALLY, BETAKUT PROTESTS THAT VARIOUS ITEMS WERE SET ASIDE FOR SMALL BUSINESS (BETAKUT NONETHELESS SUBMITTED A BID CERTIFYING THAT IT IS A SMALL BUSINESS) AND FOR SMALL BUSINESS LABOR SURPLUS AREA CONCERNS. DISMISS THIS PROTEST ISSUE. SECTION 21.1(A) OF OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 21 (1983), REQUIRES THAT A PARTY BE "INTERESTED" IN ORDER TO HAVE ITS PROTEST CONSIDERED ON THE MERITS. GENERALLY, A FIRM THAT COULD NOT RECEIVE THE CONTRACT AWARD EVEN IF ITS PROTEST HAD MERIT DOES NOT MEET THAT REQUIREMENT. SEE, E.G., TRI STATES SERVICE COMPANY, B-211862, SEPTEMBER 26, 1983, 83-2 CPD 374. AS GSA COULD NOT ACCEPT BETAKUT'S OFFER OF FOREIGN-MADE ITEMS IN ANY EVENT, AS DISCUSSED ABOVE, THE FIRM IS NOT AN INTERESTED PARTY UNDER SECTION 21.1(A) TO PROTEST THE PROPRIETY OF THE SET-ASIDES.

THE PROTEST IS DENIED IN PART AND DISMISSED IN PART.