Protest Against Army Waiver of Buy American Act

B-193083: Jul 17, 1979

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The Army awarded a contract to supply 100 theodolites to a Swiss firm, which was the low bidder. Keuffel & Esser Company (K&E), protesting that it would be the low bidder if Buy American evaluation criteria were applied, contended that the Army had no authority to award the contract on the basis of a waiver of the Buy American Act and that waiver of the Buy American Act was not in the public interest. On the other hand, the Army awarded the contract to the Swiss firm because it believed rejection of the Swiss concern's low bid would be inconsistent with the public interest. It was pointed out by GAO that under the Buy American Act the determination of whether a particular purchase from a domestic source is inconsistent with the public interest is a matter of discretion vested in the agency concerned. This decision, which often requires the balancing of conflicting policies, is not subject to review by GAO. A Memorandum of Understanding (MOU) between the United States and Switzerland provides that in order to offset substantial purchases by the Swiss Government from U.S. sources, the Department of Defense will attempt to place contracts on a competitive basis with Swiss industries. Since the record indicated that the Secretary of Defense properly concluded the MOU with the approval of the Secretary of State, it was held that the MOU constituted a valid basis for waiving the Buy American Act.