B-84306, APRIL 19, 1949, 28 COMP. GEN. 591

B-84306: Apr 19, 1949

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PERMITTING THE PROCUREMENT OF ALL ARTICLES MANUFACTURED FROM MATERIALS WHICH ARE NOT PRODUCED IN THE UNITED STATES IN SUFFICIENT AND REASONABLY AVAILABLE COMMERCIAL QUANTITIES AND OF SATISFACTORY QUALITY. 1949: REFERENCE IS MADE TO YOUR LETTER OF MARCH 8. "THERE IS ANY AUTHORITY OF LAW FOR GRANTING PREFERENTIAL TREATMENT IN FAVOR OF THE CORKBOARD MANUFACTURED IN THIS COUNTRY.'. YOU STATE THAT CORKBOARD IS MANUFACTURED ENTIRELY FROM CORK. THE PRICE OF DOMESTIC CORKBOARD IS INDICATED TO BE SUBSTANTIALLY GREATER THAN THAT OF FOREIGN CORKBOARD BUT WITHIN THE LIMITS PERMISSIBLE UNDER PARAGRAPH 6-105.1 OF THE ARMED SERVICES PROCUREMENT REGULATION. THE REAL QUESTION AT ISSUE IS WHETHER THE PROCUREMENT OF CORKBOARD MANUFACTURED IN FOREIGN COUNTRIES IS PROHIBITED BY SECTION 2 OF THE ACT OF MARCH 3.

B-84306, APRIL 19, 1949, 28 COMP. GEN. 591

PURCHASES - FOREIGN PRODUCTS - ARTICLES MANUFACTURED ABROAD THE EXCEPTION IN SECTION 2 OF THE ACT OF MARCH 3, 1933) " BUY AMERICAN ACT"), PERMITTING THE PROCUREMENT OF ALL ARTICLES MANUFACTURED FROM MATERIALS WHICH ARE NOT PRODUCED IN THE UNITED STATES IN SUFFICIENT AND REASONABLY AVAILABLE COMMERCIAL QUANTITIES AND OF SATISFACTORY QUALITY, EXTENDS TO ARTICLES MANUFACTURED ABROAD AS WELL AS TO THOSE MANUFACTURED IN THE UNITED STATES, AND, THEREFORE, THE FOREIGN PRODUCT PURCHASE RESTRICTION OF SAID ACT DOES NOT PROHIBIT THE PURCHASE FROM FOREIGN MANUFACTURERS OF CORKBOARD MANUFACTURED ENTIRELY FROM THE BARK OF A TREE WHICH DOES NOT GROW IN THE UNITED STATES. 17 COMP. GEN. 244, OVERRULED.

ACTING COMPTROLLER GENERAL YATES TO THE SECRETARY OF THE NAVY, APRIL 19, 1949:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 8, 1949, REQUESTING A DECISION AS TO WHETHER, IN THE PURCHASE OF CORKBOARD UNDER THE CIRCUMSTANCES STATED THEREIN,"THERE IS ANY AUTHORITY OF LAW FOR GRANTING PREFERENTIAL TREATMENT IN FAVOR OF THE CORKBOARD MANUFACTURED IN THIS COUNTRY.'

YOU STATE THAT IN CONNECTION WITH A RECENT INVITATION FOR BIDS ISSUED BY YOUR DEPARTMENT FOR THE PROCUREMENT OF CORKBOARD, SOME OF THE BIDS RECEIVED OFFER CORKBOARD MANUFACTURED IN THE UNITED STATES AND OTHER BIDS OFFER CORKBOARD MANUFACTURED IN FOREIGN COUNTRIES. ALSO, YOU STATE THAT CORKBOARD IS MANUFACTURED ENTIRELY FROM CORK, THE BARK OF A TREE WHICH DOES NOT GROW IN THE UNITED STATES. THE PRICE OF DOMESTIC CORKBOARD IS INDICATED TO BE SUBSTANTIALLY GREATER THAN THAT OF FOREIGN CORKBOARD BUT WITHIN THE LIMITS PERMISSIBLE UNDER PARAGRAPH 6-105.1 OF THE ARMED SERVICES PROCUREMENT REGULATION. CONSEQUENTLY, THE REAL QUESTION AT ISSUE IS WHETHER THE PROCUREMENT OF CORKBOARD MANUFACTURED IN FOREIGN COUNTRIES IS PROHIBITED BY SECTION 2 OF THE ACT OF MARCH 3, 1933, 47 STAT. 1520, 41 U.S.C. 10A, WHICH PROVIDES:

NOTWITHSTANDING ANY OTHER PROVISION OF LAW, AND UNLESS THE HEAD OF THE DEPARTMENT OR INDEPENDENT ESTABLISHMENT CONCERNED SHALL DETERMINE IT TO BE INCONSISTENT WITH THE PUBLIC INTEREST, OR THE COST TO BE UNREASONABLE, ONLY SUCH UNMANUFACTURED ARTICLES, MATERIALS, AND SUPPLIES AS HAVE BEEN MINED OR PRODUCED IN THE UNITED STATES, AND ONLY SUCH MANUFACTURED ARTICLES, MATERIALS, AND SUPPLIES AS HAVE BEEN MANUFACTURED IN THE UNITED STATES SUBSTANTIALLY ALL FROM ARTICLES, MATERIALS, OR SUPPLIES MINED, PRODUCED, OR MANUFACTURED, AS THE CASE MAY BE, IN THE UNITED STATES, SHALL BE ACQUIRED FOR PUBLIC USE. THIS SECTION SHALL NOT APPLY WITH RESPECT TO ARTICLES, MATERIALS, OR SUPPLIES FOR USE OUTSIDE THE UNITED STATES, OR IF ARTICLES, MATERIALS, OR SUPPLIES OF THE CLASS OR KIND TO BE USED OR THE ARTICLES, MATERIALS, OR SUPPLIES FROM WHICH THEY ARE MANUFACTURED ARE NOT MINED, PRODUCED, OR MANUFACTURED, AS THE CASE MAY BE, IN THE UNITED STATES IN SUFFICIENT AND REASONABLY AVAILABLE COMMERCIAL QUANTITIES AND OF A SATISFACTORY QUALITY.

IT IS NOTED THAT IN QUOTING SAID ACT OF MARCH 3, 1933, IN YOUR LETTER, EMPHASIS HAS BEEN SUPPLIED TO A CERTAIN PORTION OF THE SECOND SENTENCE OF THE PROVISION. HOWEVER, THIS SENTENCE DOES NOT PURPORT TO CONSTITUTE THE PROHIBITION ITSELF, BUT RATHER TO OUTLINE SITUATIONS TO WHICH THE PROHIBITION SHALL NOT APPLY. THE PROHIBITORY LANGUAGE OF THE STATUTE IS CONTAINED IN THE OPENING SENTENCE AND, SO FAR AS HERE PERTINENT, INHIBITS LITERALLY THE PROCUREMENT OF ALL MANUFACTURED ARTICLES EXCEPT THOSE MANUFACTURED IN THE UNITED STATES SUBSTANTIALLY ALL FROM MATERIALS PRODUCED IN THE UNITED STATES. THUS, STANDING ALONE, THIS PORTION OF THE STATUTE WOULD PROHIBIT GENERALLY THE PURCHASE OF ALL ARTICLES MANUFACTURED ABROAD. HOWEVER, READING THE PROHIBITION IN CONJUNCTION WITH THE EXEMPTING LANGUAGE WHICH FOLLOWS, THERE IS MANIFEST A CLEAR INTENT TO PERMIT THE PROCUREMENT OF ALL ARTICLES MANUFACTURED FROM MATERIALS WHICH ARE NOT PRODUCED IN THE UNITED STATES. IN OTHER WORDS, WHERE THE MATERIALS USED IN THE MANUFACTURING PROCESS ARE NOT PRODUCED IN THE UNITED STATES IN SUFFICIENT AND REASONABLY AVAILABLE COMMERCIAL QUANTITIES AND OF A SATISFACTORY QUALITY, THE PERMISSION TO PROCURE THE FINISHED PRODUCT EXTENDS TO ARTICLES MANUFACTURED ABROAD AS WELL AS TO THOSE MANUFACTURED IN THE UNITED STATES. SEE B-72524, JANUARY 13, 1948.

ACCORDINGLY, I HAVE TO ADVISE THAT THE SAID ACT OF MARCH 3, 1933, DOES NOT PROHIBIT THE PURCHASE OF CORKBOARD FROM FOREIGN MANUFACTURERS. TO THE EXTENT THAT THIS DECISION IS IN CONFLICT WITH THE HOLDING IN 17 COMP. GEN. 244, REFERRED TO IN YOUR LETTER, THE LATTER DECISION WILL NO LONGER BE FOLLOWED.