B-159495, SEP. 9, 1966

B-159495, SEP. 9, 1966

TO KEUFFEL AND ESSER COMPANY:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 21, 1966, PROTESTING AGAINST THE AWARD OF A CONTRACT TO A COMPANY OTHER THAN YOUR FIRM UNDER DEPARTMENT OF THE ARMY INVITATION FOR BIDS NO. AMC/A) 36038-66-1150 (WEI).

THE INVITATION WAS ISSUED APRIL 13, 1966, AND WAS OPENED MAY 16, 1966, CALLING FOR A MAXIMUM QUANTITY OF 1,500 AIMING CIRCLES M2, WITH EQUIPMENT; THE PROPOSED INITIAL DELIVERY ORDER PROVIDED FOR AWARD OF 1,097 INSTRUMENTS. CONTRACT DA 36038-AMC-4208/W) WAS AWARDED TO THE CANADIAN COMMERCIAL CORPORATION (ERNST LEITZ CANADA LIMITED), THE LOW BIDDER, ON JUNE 8, 1966.

IT IS YOUR CONTENTION THAT IN VIEW OF THE CRITICAL NATURE OF THE INSTRUMENT THE BEST INTERESTS OF THE GOVERNMENT REQUIRE THAT THE ITEM BE PROCURED FROM DOMESTIC COMPANIES WHICH HAVE RECENTLY PRODUCED THE ITEM. YOU ALSO CONTEND THAT OTHER THAN DOMESTIC COMPONENTS, THAT IS, PARTS MANUFACTURED IN GERMANY, WILL BE ASSEMBLED INTO THE END PRODUCT BY THE CANADIAN COMMERCIAL CORPORATION (CCC).

WE DO NOT AGREE WITH YOUR CONTENTION THAT THE SOLICITATION SHOULD HAVE BEEN LIMITED BY NEGOTIATING ONLY WITH RECENT PRODUCERS OF THE INSTRUMENT. THE PROVISIONS OF 10 U.S.C. 2304/A) AS IMPLEMENTED BY SECTION 2-102.1/A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) REQUIRE THAT THE PROCUREMENT OF PROPERTY AND SERVICES BE MADE BY FORMAL ADVERTISING WHENEVER SUCH METHOD IS FEASIBLE AND PRACTICABLE. IT IS REPORTED BY THE ADMINISTRATIVE OFFICE THAT IN THE INSTANT CASE THE DETERMINATION TO FORMALLY ADVERTISE THE PROCUREMENT WAS BASED UPON A PROCUREMENT PLAN WHICH INDICATED THAT THE SAME ITEM HAD BEEN PURCHASED IN 1964 AND 1965 PURSUANT TO FORMAL ADVERTISING. THEREFORE, UNDER THE CIRCUMSTANCES IT WAS DETERMINED THAT FORMAL ADVERTISING WAS FEASIBLE AND PRACTICABLE, NOTWITHSTANDING THE HIGH PRIORITY ASSIGNED TO THE PROCUREMENT. IN VIEW THEREOF, WE SEE NO LEGAL OBJECTION TO THE DETERMINATION TO FORMALLY ADVERTISE THE PROCUREMENT RATHER THAN LIMITING THE SOLICITATION TO PRIOR PRODUCERS ONLY.

REGARDING YOUR CONTENTION THAT CCC WILL DELIVER A FOREIGN END ITEM, IT IS NOTED THAT IN ITS BID, CCC CERTIFIED THAT THE END PRODUCT WOULD BE OF DOMESTIC MANUFACTURE IN ACCORDANCE WITH THE PROVISIONS OF THE BUY AMERICAN ACT, 41 U.S.C. 10A. IN THAT CONNECTION, THE SECRETARIES OF THE MILITARY DEPARTMENTS HAVE DETERMINED THAT IT WOULD BE INCONSISTENT WITH THE PUBLIC INTEREST TO APPLY THE BUY AMERICAN ACT RESTRICTIONS TO CANADIAN PURCHASES WITH RESPECT TO SUPPLIES INVOLVED IN PROGRAMS OF MUTUAL INTEREST TO THE UNITED STATES AND CANADA. SEE ASPR 6-103.5. ALSO, ASPR 6-103.5/C) (2) PROVIDES THAT LISTED CANADIAN END PRODUCTS ARE TO BE TREATED AS DOMESTIC END PRODUCTS. THE AIMING CIRCLE M2 IS CONTAINED IN THE LIST MAINTAINED BY THE DEPARTMENT OF THE ARMY UNDER ASPR 6-103.5/A) OF CANADIAN SUPPLIES (ASPR 6-101/E) ( DETERMINED TO BE INVOLVED IN PROGRAMS OF MUTUAL INTEREST TO THE UNITED STATES AND CANADA. THUS, IT IS CLEAR THAT THE FURNISHING OF A CANADIAN END PRODUCT DOES NOT VIOLATE THE PROVISIONS OF THE BUY AMERICAN ACT.

CONCERNING THE QUESTION AS TO THE INCORPORATION OF GERMAN-MADE PRODUCTS INTO THE END ITEM, WE HAVE BEEN ADVISED THAT IN RESPONSE TO A REQUEST FROM THE CONTRACTING OFFICER CCC STATED THAT CERTAIN MATERIALS MAY CONTAIN A SMALL QUANTITY OF FOREIGN PRODUCTS BUT THAT THE MAXIMUM QUANTITY OF SUCH PRODUCTS WOULD BE LESS THAN 10 PERCENT OF THE CONTRACT VALUE. ON THE BASIS OF SUCH INFORMATION IT APPEARS THAT THE COST OF THE COMPONENT ARTICLES OF FOREIGN ORIGIN CONSTITUTES LESS THAN 50 PERCENT OF THE AGGREGATE COST OF ALL COMPONENTS AND THE END ITEM THEREFORE CONSTITUTES A CANADIAN END PRODUCT UNDER THE DEFINITION CONTAINED IN ASPR 6-101/E) WHICH MUST BE TREATED AS A DOMESTIC END PRODUCT UNDER ASPR 6-103.5/C) (2).

ACCORDINGLY, WE SEE NO LEGAL BASIS TO OBJECT TO THE AWARD MADE AND YOUR PROTEST IS DENIED.