B-175917, JUL 27, 1972
Highlights
WHICH ARE TO BE INSTALLED IN 30 DESTROYERS BEING DESIGNED AND CONSTRUCTED UNDER A NAVY CONTRACT. GAO MUST CONCLUDE THAT THE ITEMS ARE "COMPONENTS" OF THE FINISHED PRODUCT. THE OSCILLOSCOPES ARE "END PRODUCTS" IN AND OF THEMSELVES AND SHOULD NOT HAVE BEEN CLASSIFIED AS "COMPONENTS" OF THE DESTROYERS. COMPONENTS THERE IS NO QUESTION OF THEIR ACCEPTABILITY FOR BUY AMERICAN ACT PURPOSES. IT IS SUGGESTED THAT AS "END PRODUCTS" THERE MAY BE A QUESTION AS TO WHETHER THEY QUALIFY AS DOMESTIC PRODUCTS. YOU STATE THAT OSCILLOSCOPES COMMONLY ARE PROCURED BY THE GOVERNMENT AS END PRODUCTS AND YOU QUESTION THE CLASSIFICATION OF THE IMMEDIATE OSCILLOSCOPES AS COMPONENTS WHEN THEY ARE BEING PROCURED FROM AND INSTALLED BY A SUBCONTRACTOR ON THE SHIPS.
B-175917, JUL 27, 1972
BID PROTEST - BUY AMERICAN ACT - "END ITEMS" DENIAL OF PROTEST ON BEHALF OF DUMONT OSCILLOSCOPE LABORATORIES, INC., AGAINST THE PROCUREMENT BY A GOVERNMENT PRIME CONTRACTOR OF 30 OSCILLOSCOPES ALLEGED TO BE OF FOREIGN MANUFACTURE, WHICH ARE TO BE INSTALLED IN 30 DESTROYERS BEING DESIGNED AND CONSTRUCTED UNDER A NAVY CONTRACT. ALTHOUGH THE GOVERNMENT MAY SOMETIMES PURCHASE OSCILLOSCOPES AS "END ITEMS" WITHIN THE MEANING OF THE BUY AMERICAN ACT, 41 U.S.C. 10A-D, IN THE PRESENT CASE, GAO MUST CONCLUDE THAT THE ITEMS ARE "COMPONENTS" OF THE FINISHED PRODUCT, THE DESTROYERS.
TO ARNOLD & PORTER:
WE REFER TO YOUR LETTERS OF MAY 9 AND JUNE 14, 1972, PROTESTING ON BEHALF OF DUMONT OSCILLOSCOPE LABORATORIES, INC., THE PROCUREMENT BY A GOVERNMENT PRIME CONTRACTOR OF 30 OSCILLOSCOPES ALLEGED TO BE OF FOREIGN MANUFACTURE FOR INSTALLATION IN EACH OF 30 DESTROYERS BEING DESIGNED AND CONSTRUCTED UNDER NAVY CONTRACT N00024-70-C-0275.
YOU CONTEND THAT WITHIN THE MEANING OF THE BUY AMERICAN ACT, 41 U.S.C. 10A-D, THE OSCILLOSCOPES ARE "END PRODUCTS" IN AND OF THEMSELVES AND SHOULD NOT HAVE BEEN CLASSIFIED AS "COMPONENTS" OF THE DESTROYERS. COMPONENTS THERE IS NO QUESTION OF THEIR ACCEPTABILITY FOR BUY AMERICAN ACT PURPOSES, BUT IT IS SUGGESTED THAT AS "END PRODUCTS" THERE MAY BE A QUESTION AS TO WHETHER THEY QUALIFY AS DOMESTIC PRODUCTS.
YOU STATE THAT OSCILLOSCOPES COMMONLY ARE PROCURED BY THE GOVERNMENT AS END PRODUCTS AND YOU QUESTION THE CLASSIFICATION OF THE IMMEDIATE OSCILLOSCOPES AS COMPONENTS WHEN THEY ARE BEING PROCURED FROM AND INSTALLED BY A SUBCONTRACTOR ON THE SHIPS.
WHILE IT MAY BE THAT OSCILLOSCOPES ARE CONSIDERED TO BE END PRODUCTS WHEN PURCHASED ALONE BY THE GOVERNMENT, IT APPEARS THAT IN THE IMMEDIATE CASE THE NAVY HAS CONTRACTED WITH THE PRIME CONTRACTOR FOR THE DESIGN AND CONSTRUCTION OF THE SHIPS AND THAT THE OSCILLOSCOPES PROCURED BY THE PRIME CONTRACTOR ARE TO BE "AN INTEGRAL PART OF THE ON BOARD COMMUNICATIONS QUALITY MONITORING AND CONTROL SYSTEM" AND THAT "BY MEANS OF A SERIES OF SWITCHES, THE OPERATOR IS ABLE TO MAINTAIN A CONSTANT CHECK ON THE PERFORMANCE OF NUMEROUS ELEMENTS OF THE DESTROYERS COMMUNICATIONS EQUIPMENT." IT IS REPORTED THAT THIS IS IMPORTANT TO THE OPERATION OF THE SHIP.
IN THE CIRCUMSTANCES, IT APPEARS THAT THE NAVY IS PROCURING THE DESTROYERS AS COMPLETELY ASSEMBLED OPERATING UNITS AND THAT THE OSCILLOSCOPES ARE COMPONENTS OF THE DESTROYERS. WE FIND NO LEGAL BASIS TO DISAGREE WITH THE NAVY IN THIS REGARD.
ACCORDINGLY, THE PROTEST IS DENIED.