B-218323.3, B-218785.2, JUL 11, 1986, 86-2 CPD 56

B-218323.3,B-218785.2: Jul 11, 1986

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CONTRACTING OFFICER'S RELIANCE ON BLANK BUY AMERICAN CERTIFICATE WHICH OBLIGATES BIDDER TO SUPPLY DOMESTIC SOURCE END PRODUCT IS NOT OBJECTIONABLE WHERE. CONTRACTING OFFICER HAD NO REASON TO SUSPECT THAT THE PRODUCTS BEING OFFERED WERE IN FACT OF FOREIGN ORIGIN. WHEN PROTESTS ARE WITHOUT MERIT. THE RECOVERY OF LOST PROFITS IS NOT PERMITTED UNDER ANY CIRCUMSTANCES. EACH END PRODUCT OFFERED WAS A DOMESTIC SOURCE END PRODUCT. FOREIGN END PRODUCTS WERE TO BE LISTED WITH THE COUNTRY OF ORIGIN. THIS PREFERENCE IS IMPLEMENTED BY THE ADDITION OF A DIFFERENTIAL TO THE PRICE FOR A FOREIGN END PRODUCT. EACH BID ITEM OFFERING A FOREIGN END PRODUCT IS TO BE ADJUSTED BY ADDING TO IT A FACTOR OF 50 PERCENT.

B-218323.3, B-218785.2, JUL 11, 1986, 86-2 CPD 56

BUY AMERICAN ACT - BUY AMERICAN CERTIFICATE - LEFT BLANK DIGEST: 1. CONTRACTING OFFICER'S RELIANCE ON BLANK BUY AMERICAN CERTIFICATE WHICH OBLIGATES BIDDER TO SUPPLY DOMESTIC SOURCE END PRODUCT IS NOT OBJECTIONABLE WHERE, PRIOR TO AWARD, CONTRACTING OFFICER HAD NO REASON TO SUSPECT THAT THE PRODUCTS BEING OFFERED WERE IN FACT OF FOREIGN ORIGIN. BIDS - PREPARATION - COSTS - NONCOMPENSABLE 2. WHEN PROTESTS ARE WITHOUT MERIT, NO BASIS EXISTS FOR RECOVERING BID PREPARATION COSTS AND THE COSTS OF PURSUING THE PROTESTS. FURTHER, THE RECOVERY OF LOST PROFITS IS NOT PERMITTED UNDER ANY CIRCUMSTANCES.

SPECTRUM LEASING CORPORATION:

SPECTRUM LEASING CORPORATION (SPECTRUM) PROTESTS THE AWARD OF CONTRACTS TO INTERNATIONAL DATA PRODUCTS CORPORATION (IDP) UNDER INVITATION FOR BIDS (IFB) NOS. DACW38-85-B-0022 AND DACW38-85-B-0032 ISSUED BY THE UNITED STATES ARMY CORPS OF ENGINEERS, VICKSBURG, MISSISSIPPI. SPECTRUM CONTENDS THAT IDP OFFERED FOREIGN END PRODUCTS AND THAT THE AGENCY IMPROPERLY FAILED TO APPLY THE BUY AMERICAN ACT DIFFERENTIAL TO IDP'S BIDS.

WE DENY THE PROTESTS.

THE IFB'S REQUESTED BIDS FOR MICROCOMPUTERS AND CERTAIN HARDWARE AND SOFTWARE ACCESSORIES, AND CONTAINED A BUY AMERICAN CERTIFICATE IN WHICH BIDDERS CERTIFIED THAT, EXCEPT AS OTHERWISE INDICATED, EACH END PRODUCT OFFERED WAS A DOMESTIC SOURCE END PRODUCT. FOREIGN END PRODUCTS WERE TO BE LISTED WITH THE COUNTRY OF ORIGIN. THE IFB PROVIDED THAT A BUY AMERICAN DIFFERENTIAL WOULD BE APPLIED TO THE PRICES OF THOSE ITEMS IDENTIFIED AS FOREIGN.

THE BUY AMERICAN ACT ESTABLISHES A PREFERENCE FOR PRODUCTS MINED, PRODUCED OR MANUFACTURED IN THE UNITED STATES TO OFFSET PARTIALLY THE COMPETITIVE ADVANTAGES THAT MAY BE ENJOYED BY FOREIGN COMPETITION. SEE DAWSON CONSTRUCTION CO., INC., B-214070, FEB. 8, 1984, 84-1 CPD PARA. 160. THIS PREFERENCE IS IMPLEMENTED BY THE ADDITION OF A DIFFERENTIAL TO THE PRICE FOR A FOREIGN END PRODUCT. SEE AUTOCLAVE ENGINEERS, INC., B-217212, DEC. 14, 1984, 84-2 CPD PARA. 668. APPLICABLE REGULATIONS PROVIDE THAT, FOR EVALUATION PURPOSES, EACH BID ITEM OFFERING A FOREIGN END PRODUCT IS TO BE ADJUSTED BY ADDING TO IT A FACTOR OF 50 PERCENT, EXCLUSIVE OF DUTY, OR 6 PERCENT, INCLUSIVE OF DUTY, WHICHEVER RESULTS IN THE GREATER EVALUATED PRICE. DEPARTMENT OF DEFENSE (DOD) FEDERAL ACQUISITION REGULATION (FAR) SUPPLEMENT, 48 C.F.R. SEC. 225.105(S 71)(1) (1985).

SPECTRUM WAS THE LOW BIDDER AND IDP WAS SECOND LOW UNDER BOTH SOLICITATIONS. IN EVALUATING SPECTRUM'S BIDS, THE ARMY APPLIED THE 50 PERCENT BUY AMERICAN ACT DIFFERENTIAL TO THE PRICES FOR THOSE ITEMS SPECTRUM IDENTIFIED AS FOREIGN, RESULTING IN EVALUATED PRICES GREATER THAN IDP'S. THE ARMY THEN EVALUATED IDP'S BIDS AND FOUND THAT IDP LEFT THE BUY AMERICAN CERTIFICATE IN BOTH BIDS BLANK, THEREBY CERTIFYING THAT THE PRODUCTS IT OFFERED WERE DOMESTIC END PRODUCTS. AS A RESULT, NO UPWARD ADJUSTMENT WAS MADE TO IDP'S BIDS AND THE ARMY AWARDED BOTH CONTRACTS TO IDP. BECAUSE THE PROTESTS OF THESE PROCUREMENTS INITIALLY WERE FILED MORE THAN 10 CALENDAR DAYS AFTER THE CONTRACT AWARDS, THE AGENCY WAS NOT REQUIRED TO STAY PERFORMANCE OF THE CONTRACTS PENDING A DECISION ON THESE PROTESTS AND THE CONTRACTS HAVE BEEN COMPLETELY PERFORMED.

THE ARMY LEARNED, AFTER THE PRINTERS IN QUESTION WERE DELIVERED AND DISTRIBUTED, THAT THE PRINTERS, AS WELL AS SOME OF THE OTHER PRODUCTS SUPPLIED, WERE FOREIGN. THE ARMY SUBSEQUENTLY DETERMINED THAT IT WAS IMPRACTICABLE TO REQUIRE IDP TO SUBSTITUTE DOMESTIC END PRODUCTS FOR THE SUPPLIED FOREIGN END PRODUCTS AND THEREFORE NEGOTIATED AN EQUITABLE ADJUSTMENT TO THE CONTRACT WITH IDP TO COMPENSATE FOR THE FIRM'S FAILURE TO COMPLY WITH ITS DOMESTIC END PRODUCT CERTIFICATION. UNDER THE CONTRACT MODIFICATION, IDP AGREED TO PROVIDE SOME ADDITIONAL EQUIPMENT, SOME REPLACEMENT PARTS, AND EXTENDED WARRANTY ON ALL FOREIGN END PRODUCTS FURNISHED, AND A TRAINING COURSE ON THE USE AND MAINTENANCE OF THE PRODUCTS PROVIDED.

SPECTRUM ARGUES THAT UNDER BOTH SOLICITATIONS IDP OFFERED TO SUPPLY DOT MATRIX PRINTERS AND THIMBLE WHEEL PRINTERS MANUFACTURED BY JAPANESE FIRMS- - CANON, INC., AND C. ITOH ELECTRONICS, INC., RESPECTIVELY. SPECTRUM CONTENDS THAT THE ARMY SHOULD NOT HAVE ACCEPTED IDP'S BUY AMERICAN CERTIFICATION WITHOUT INQUIRY BECAUSE, DUE TO THE AGENCY'S EXPERTISE IN MICROCOMPUTERS, IT SHOULD HAVE KNOWN THAT MANY MICROCOMPUTER PRINTERS, AND THESE WELL-KNOWN BRANDS IN PARTICULAR, WERE MANUFACTURED OUTSIDE THE UNITED STATES. THE PROTESTER FURTHER CONTENDS THAT THE ARMY SHOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY THAT THESE PRODUCTS WERE NOT DOMESTIC IN ORIGIN, BECAUSE THE TECHNICAL LITERATURE DESCRIBING THE CANON PRINTER SUBMITTED WITH IDP'S BIDS INCLUDED THE WORD "JAPAN" THREE TIMES. SPECTRUM CONTENDS THAT, AT THE LEAST, THESE FACTORS SHOULD HAVE PROVIDED A BASIS FOR INVESTIGATION INTO THE ORIGIN OF THESE PRODUCTS.

THE ARMY RESPONDS THAT THERE WAS NO INDICATION IN IDP'S BIDS THAT IT WAS OFFERING ANYTHING OTHER THAN DOMESTIC END PRODUCTS AND, BY LEAVING THE BUY AMERICAN CERTIFICATES BLANK, IDP WAS OBLIGATED TO FURNISH AMERICAN MADE END PRODUCTS. THE ARMY STATES THAT THE TECHNICAL LITERATURE SUBMITTED BY IDP DID NOT IDENTIFY OR SUGGEST THE PLACE OF MANUFACTURE OF THESE PRODUCTS. SPECIFICALLY, IT CLAIMS THAT THE CANON LITERATURE ONLY ESTABLISHED THAT THE FIRM HAS AN INTERNATIONAL SALES OFFICE IN JAPAN, WHILE THE C. ITOH LITERATURE MADE NO REFERENCE AT ALL TO JAPAN. THUS, THE ARMY CONTENDS THAT THE CONTRACTING OFFICER DID NOT KNOW, NOR SHOULD HAVE KNOWN, THAT THE PRODUCTS OFFERED BY IDP WERE OF FOREIGN ORIGIN, AND CONSEQUENTLY ACTED PROPERLY BY RELYING ON IDP'S CERTIFICATION.

WHERE, AS HERE, A BIDDER DOES NOT EXCLUDE ANY END PRODUCTS FROM THE BUY AMERICAN CERTIFICATION IN ITS BID AND DOES NOT OTHERWISE INDICATE THAT IT IS OFFERING FOREIGN END PRODUCTS, THE GOVERNMENT'S ACCEPTANCE OF THE BID RESULTS IN A CONTRACTUAL OBLIGATION TO FURNISH DOMESTIC END PRODUCTS. LAW ENFORCEMENT ASSOCIATES, INC., B-205024, APR. 5, 1982, 82-1 CPD PARA. 304. THE BIDDER'S COMPLIANCE WITH THAT OBLIGATION IS A MATTER OF CONTRACT ADMINISTRATION THAT HAS NO EFFECT ON THE VALIDITY OF THE CONTRACT AWARD. SEE AUTOCLAVE ENGINEERS, INC., B-217212, SUPRA; HYBRID TECHNOLOGY GROUP, INC., B-215168, OCT. 3, 1984, 84-2 CPD PARA. 385.

ALTHOUGH AN AGENCY SHOULD NOT AUTOMATICALLY RELY ON THE CERTIFICATION WHEN IT HAS REASON TO QUESTION WHETHER A DOMESTIC PRODUCT WILL BE FURNISHED, SEE DESIGNWARE, INC., B-221423, FEB. 20, 1986, 86-1 CPD PARA. 181, THE CONTRACTING OFFICER, BEFORE AWARD, HAD NO REASON TO QUESTION IDP'S CERTIFICATION OF ITS PRODUCTS AS DOMESTIC.

FIRST, THE RECORD DOES NOT ESTABLISH THAT THE ARMY HAD ACTUAL KNOWLEDGE THAT THE PRODUCTS WERE OF FOREIGN ORIGIN. SECOND, THERE IS NOTHING IN THE IDP BIDS OR THE RECORD WHICH SHOULD HAVE CAUSED THE ARMY TO SUSPECT THAT IDP, CONTRARY TO ITS CERTIFICATION OF ITS PRODUCTS AS DOMESTIC, WAS OFFERING FOREIGN END PRODUCTS.

ALTHOUGH THE CANON TECHNICAL LITERATURE SUBMITTED WITH IDP'S BIDS INCLUDED THE WORD "JAPAN" THREE TIMES, THESE REFERENCES ONLY INDICATED THAT CANON'S INTERNATIONAL HEADQUARTERS ARE LOCATED IN JAPAN AND THAT THE LITERATURE WAS PRINTED IN JAPAN. THESE REFERENCES DO NOT SUGGEST THAT THE PRODUCT OFFERED WAS A FOREIGN END PRODUCT. MOREOVER, THE CANON LITERATURE ALSO INCLUDED THE ADDRESS OF AN OFFICE LOCATED IN THE UNITED STATES. ALSO NOTE THAT THE C. ITOH TECHNICAL LITERATURE SUBMITTED WITH IDP'S BIDS INDICATED THAT THE COMPANY'S HEADQUARTERS IS BASED IN LOS ANGELES, CALIFORNIA, AND DID NOT INDICATE THAT C. ITOH IS A JAPANESE FIRM OR THAT THE PRODUCT BEING OFFERED WAS PRODUCED IN JAPAN. BASED ON THESE CIRCUMSTANCES, WE CONCLUDE THAT THE CONTRACTING OFFICER ACTED PROPERLY BY RELYING ON IDP'S CERTIFICATION.

SPECTRUM REQUESTS THAT IT BE REIMBURSED ITS BID PREPARATION COSTS AND ITS COST OF FILING AND PURSUING ITS PROTESTS, INCLUDING ATTORNEY'S FEES. HOWEVER, SINCE WE FIND THE PROTESTS TO BE WITHOUT MERIT, WE DENY THE CLAIM FOR COSTS. TSCO, INC., B-221306, FEB. 26, 1986, 65 COMP.GEN. ***, 86-1 CPD PARA. 198. THE PROTESTER ALSO REQUESTS THAT IT BE ALLOWED RECOVERY OF PROFITS IT LOST BY NOT BEING AWARDED THESE CONTRACTS. THERE IS, HOWEVER, NO LEGAL BASIS FOR ALLOWING AN UNSUCCESSFUL BIDDER TO RECOVER ANTICIPATED PROFITS. SMOKE BUSTERS, B-219458, NOV. 1, 1985, 85-2 CPD PARA. 501.

THE PROTESTS ARE DENIED.