B-156420, SEP. 30, 1965
Highlights
AGENCY FOR INTERNATIONAL DEVELOPMENT DEPARTMENT OF STATE: REFERENCE IS MADE TO YOUR LETTER DATED JUNE 14. IS ALLEGED. WE HAVE BEEN INFORMALLY ADVISED THAT UNDER THE VIEW TAKEN BY YOUR AGENCY. THIS STATUTORY REQUIREMENT IS SATISFIED PROVIDED THE SUPPLIERS IN PRIVITY WITH THE BORROWER ARE AMERICAN COMPANIES. IS NOTED: "* * * THE CONTRACTOR AND EBASCO WILL BE REQUIRED TO CERTIFY. AS PAYMENTS ARE MADE UNDER THE CONTRACT. THAT A.I.D.'S SOURCE AND ORIGIN REQUIREMENTS ARE BEING MET.'. TO INSURE THAT THE CERTIFICATIONS ARE HONORED. ASSUMING THEY ARE BOTH OF THE FIXED-PRICE TYPE. IS ENCLOSED.
B-156420, SEP. 30, 1965
TO MR. DAVID E. BELL ADMINISTRATOR, AGENCY FOR INTERNATIONAL DEVELOPMENT DEPARTMENT OF STATE:
REFERENCE IS MADE TO YOUR LETTER DATED JUNE 14, 1965, FORWARDING A REPORT ON THE PROTEST OF BALDWIN-LIMA-HAMILTON CORPORATION AGAINST THE APPROVAL BY YOUR AGENCY OF THE BORROWER-GRANTEE'S RECOMMENDATION THAT AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. PEIX-101 BE MADE TO THE INTERNATIONAL GENERAL ELECTRIC COMPANY (IGE).
THE CONTRACT'S LEGALITY HAS BEEN QUESTIONED ON SEVERAL GROUNDS. CONTRAVENTION OF SECTION 604/A) OF THE FOREIGN ASSISTANCE ACT OF 1961, 75 STAT. 439, 22 U.S.C. 2354/A) WHICH ALLOWS THE USE OF FUNDS APPROPRIATED FOR THE FOREIGN AID PROGRAM TO BE SPENT OUTSIDE THE UNITED STATES ONLY UPON THE MAKING OF A PRESIDENTIAL DETERMINATION, IS ALLEGED. WE HAVE BEEN INFORMALLY ADVISED THAT UNDER THE VIEW TAKEN BY YOUR AGENCY, THIS STATUTORY REQUIREMENT IS SATISFIED PROVIDED THE SUPPLIERS IN PRIVITY WITH THE BORROWER ARE AMERICAN COMPANIES. THIS WOULD MEAN THAT A FOREIGN ITEM COULD BE PURCHASED WITHOUT A PRESIDENTIAL DETERMINATION BY THE SIMPLE EXPEDIENT OF INSERTING A PRO FORMA TRANSACTION WITH A UNITED STATES JOBBER BETWEEN THE FOREIGN MANUFACTURER OR ASSEMBLER AND THE BORROWER. WE CANNOT AGREE THAT THE CONGRESS INTENDED THAT SUCH A TRANSACTION WOULD SATISFY THE REQUIREMENT OF THE LAW.
WITH RESPECT TO ENFORCING THE TEN PERCENT LIMITATION ON FOREIGN COMPONENTS, THE FOLLOWING STATEMENT IN YOUR LETTER OF JUNE 14, IS NOTED:
"* * * THE CONTRACTOR AND EBASCO WILL BE REQUIRED TO CERTIFY, AS PAYMENTS ARE MADE UNDER THE CONTRACT, THAT A.I.D.'S SOURCE AND ORIGIN REQUIREMENTS ARE BEING MET.'
TO INSURE THAT THE CERTIFICATIONS ARE HONORED, WE SUGGEST THAT THE BORROWER OBTAIN FROM IGE A COPY OF THE SUBCONTRACT WITH WILLAMETTE AND A COPY OF THE SECOND-TIER SUBCONTRACT BETWEEN WILLAMETTE AND DOMINION ENGINEERING WORKS. A COMPARISON OF THE RESPECTIVE PRICES OF THE TWO CONTRACTS, ASSUMING THEY ARE BOTH OF THE FIXED-PRICE TYPE, WOULD AFFORD A MEANINGFUL TECHNIQUE FOR POLICING COMPLIANCE WITH THE TEN PERCENT LIMITATION.
A COPY OF OUR LETTER OF THIS DATE ADDRESSED TO MESSRS. SELLERS, CONNER AND CUNEO, ATTORNEYS FOR THE PROTESTANT, DENYING THE PROTEST, IS ENCLOSED.