B-166308, APR. 23, 1969

B-166308, APR. 23, 1969

TO UNICO ENVIRONMENTAL INSTRUMENTS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 21, 1969, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDERSOLICITATION NO. N00104-69-B-0467/12.5), ISSUED BY THE NAVY SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA.

THE ABOVE SOLICITATION WAS ISSUED ON SEPTEMBER 4, 1968, AND CALLED FOR A MINIMUM QUANTITY OF 1,366 AND A MAXIMUM QUANTITY OF 4,098 CARBON MONOXIDE INDICATOR TUBES. THE TWO BIDS RECEIVED IN RESPONSE TO THE SOLICITATION WERE AS FOLLOWS:

UNIT

COMPANY COMPANY SIZE PRICE TOTAL

------- ------------ ----- ----- MINE SAFETY

APPLIANCE

COMPANY (MINE

SAFETY) LARGE $2.90 $3,961.40 UNICO ENVIRONMENTAL

INSTRUMENTS, INC.

(UNICO) SMALL 2.30 3,141.80

THE SOLICITATION INCORPORATED ARMED SERVICES PROCUREMENT REGULATION (ASPR) 6-104.5, WHICH WAS PROMULGATED PURSUANT TO, AND IN COMPLIANCE WITH, THE ACT OF MARCH 3, 1933, AS AMENDED, 41 U.S.C. 10A - 10D, COMMONLY REFERRED TO AS THE BUY AMERICAN ACT, AND EXECUTIVE ORDER NO. 10582, DATED DECEMBER 17, 1954. THE CONTRACT CLAUSE REQUIRED BY ASPR 6-104.5 TO BE INSERTED IN ALL CONTRACTS FOR SUPPLIES PROVIDES, PURSUANT TO THE BUY AMERICAN ACT, THAT THE GOVERNMENT GIVE PREFERENCE TO DOMESTIC SOURCE END PRODUCTS. ACCORDING TO THE ADMINISTRATIVE REPORT THE LOW BID SUBMITTED BY YOUR FIRM WAS PREDICATED ON SUPPLYING CARBON MONOXIDE INDICATOR TUBES MANUFACTURED BY KOMYO CHEMICAL INDUSTRIES, LTD., TOKYO, JAPAN. INASMUCH AS MINE SAFETY'S BID WAS FOR A DOMESTIC SOURCE END PRODUCT, YOUR BID WAS ADJUSTED, AS PRESCRIBED BY ASPR 6-104.4 (B) AS FOLLOWS:

(A) FOREIGN BID EXCLUDING DUTY OF $0.19 $2.11

PLUS 50 PERCENT FACTOR 1.055

FOREIGN BID PLUS 50 PERCENT FACTOR $3.165

(B) FOREIGN BID INCLUDING DUTY OF $0.19 $2.30

PLUS 6 PERCENT FACTOR .138

FOREIGN BID PLUS 6 PERCENT FACTOR $2.438

SINCE THE CITED REGULATION PROVIDES THAT WHICHEVER ADJUSTMENT RESULTS IN THE GREATER ADJUSTED PRICE IS TO BE UTILIZED IN THE EVALUATION, ADJUSTMENT (A) WAS USED. BASED ON THE ADJUSTMENT (A) PRICE, THE MINE SAFETY'S DOMESTIC BID WAS THE LOW EVALUATED BID. ACCORDINGLY, AWARD WAS MADE TO MINE SAFETY. THE BUY AMERICAN ACT, PREVIOUSLY CITED, PROVIDES THAT "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 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.'

SINCE THE ACT DOES NOT SPECIFY HOW, OR TO WHAT EXTENT, THE COST OF A CONTEMPLATED PURCHASE SHALL BE DETERMINED TO BE, OR CONSIDERED TO BE, UNREASONABLE, EXECUTIVE ORDER NO. 10582 PROVIDES GUIDANCE FOR MAKING SUCH DETERMINATIONS ON A UNIFORM BASIS. PURSUANT TO THE BUY AMERICAN ACT AND THE ABOVE IMPLEMENTING EXECUTIVE ORDER, ASPR 6-104.4 PRESCRIBES THE FORMULA FOR DETERMINING THE REASONABLENESS OF THE DOMESTIC BID OR PROPOSAL WITH RELATION TO THE FOREIGN BID OR PROPOSAL. IT IS THEREFORE PROVIDED, IN PERTINENT PART, THAT "EACH FOREIGN BID * * * SHALL BE ADJUSTED FOR PURPOSES OF EVALUATION EITHER BY EXCLUDING ANY DUTY FROM THE FOREIGN BID AND ADDING 50 PERCENT OF THE BID (EXCLUSIVE OF DUTY) TO THE REMAINDER, OR BY ADDING TO THE FOREIGN BID (INCLUSIVE OF DUTY) A FACTOR OF 6 PERCENT OF THAT BID, WHICHEVER RESULTS IN THE GREATER EVALUATED PRICE, * * *.'

AS ILLUSTRATED ABOVE, THE METHOD OF EVALUATION PRESCRIBED BY THE PROVISION QUOTED WAS PRECISELY THE METHOD FOLLOWED IN EVALUATING YOUR BID. SINCE THE PROCEDURE RESULTED IN THE MINE SAFETY BID BEING EVALUATED LOWER THAN YOURS, AWARD OF THE SUBJECT CONTRACT WAS PROPERLY MADE TO MINE SAFETY.

REGARDING YOUR STATEMENT THAT THE CARBON MONOXIDE INDICATOR TUBES MANUFACTURED IN JAPAN HAD GREATER ACCURACY AND REPRODUCIBILITY THAN TUBES MANUFACTURED IN THE UNITED STATES, WE HAVE CONSISTENTLY HELD THAT THE DRAFTING OF PROPER SPECIFICATIONS TO MEET THE MINIMUM REQUIREMENTS OF THE GOVERNMENT, AND THE FACTUAL DETERMINATION WHETHER ANY PRODUCT OFFERED THEREUNDER CONFORMS TO THOSE SPECIFICATIONS ARE MATTERS PRIMARILY WITHIN THE JURISDICTION OF THE PROCURING ACTIVITY, AND OUR OFFICE WILL NOT INTERFERE ABSENT CLEAR EVIDENCE OF ABUSE OF ADMINISTRATIVE DISCRETION. WHERE AN ITEM OFFERED AT A LOWER EVALUATED PRICE MEETS THE SPECIFICATIONS, THE FACT THAT A FOREIGN ITEM MAY BE SUPERIOR DOES NOT AUTHORIZE A WAIVER OF THE BUY AMERICAN EVALUATION TO PERMIT ITS PURCHASE.