B-175833, SEP 25, 1972

B-175833, SEP 25, 1972

BID PROTEST - FOREIGN BIDDERS - COMPETITIVE ADVANTAGE - DELIVERY POINT DECISION DENYING THE PROTEST OF MILMARK SERVICES, INC., AGAINST AWARD TO INDHACO OF A CONTRACT FOR THE PERFORMANCE OF KEYPUNCHING SERVICES TO PROCESS PERMIT APPLICATIONS FOR THE REFUSE ACT PERMIT PROGRAM AND FOR DEVELOPMENT OF AN INDUSTRIAL WASTE INVENTORY UNDER AN IFB ISSUED BY THE ENVIRONMENTAL PROTECTION AGENCY. THE LISTING OF A POST OFFICE BOX NUMBER AS THE U. S. ADDRESS OF A FOREIGN BIDDER DOES NOT RESTRICT THE MODE OF SHIPMENT WHERE THE SHIPPING POINT REQUIREMENT IN THE IFB IS GENERAL. FURTHER, THE DELIVERY ADDRESS COULD PROPERLY BE SUPPLIED AFTER BID OPENING. THE FACT THAT FOREIGN BIDDERS MAY HAVE A COMPETITIVE ADVANTAGE OVER AMERICAN BIDDERS BECAUSE THEY DO NOT HAVE TO COMPLY WITH MINIMUM WAGE STANDARDS OR PAY THE SAME TAXES DOES NOT PROVIDE A BASIS FOR REJECTING FOREIGN BIDS, SINCE THE "BUY AMERICAN ACT" DIFFERENTIAL PRESCRIBED BY FPR 1-6.104-4(B) HAS BEEN APPLIED TO FOREIGN BIDS.

TO MILMARK SERVICES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JULY 28, 1972, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF ENVIRONMENTAL PROTECTION AGENCY (EPA) CONTRACT NO. 68-01-0567 TO INDHACO UNDER INVITATION FOR BIDS (IFB) WA-72-E303 FOR THE PERFORMANCE OF KEYPUNCHING SERVICES TO PROCESS PERMIT APPLICATIONS FOR THE REFUSE ACT PERMIT PROGRAM AND FOR DEVELOPMENT OF AN INDUSTRIAL WASTE INVENTORY.

THREE BIDS WERE RECEIVED AND OPENED ON APRIL 26, 1972. INDHACO OF HAITI, WEST INDIES, SUBMITTED THE LOWEST BID FOR THE SERVICES AT $54,055.35 AND CERTIFIED THAT EACH END PRODUCT, EXCEPT "KEYPUNCHING SERVICES," WAS A DOMESTIC SOURCE END PRODUCT FOR PURPOSES OF THE BUY AMERICAN ACT, 41 U.S.C. 10A-D. YOU SUBMITTED THE THIRD LOWEST BID AT $283,586.40.

THE CONTRACTING OFFICER CONSIDERED THE INDHACO OFFER TO BE A FOREIGN BID AND ADDED TO THE BID A 12-PERCENT FACTOR SET FORTH IN SECTION 1 6.104-4(B) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), WHICH IN PERTINENT PART PROVIDES:

"*** EACH FOREIGN BID SHALL BE ADJUSTED FOR PURPOSES OF EVALUATION BY ADDING TO THE FOREIGN BID (INCLUSIVE OF DUTY) A FACTOR OF 6 PERCENT OF THAT BID, EXCEPT THAT A 12 PERCENT FACTOR SHALL BE USED INSTEAD OF THE 6 PERCENT FACTOR IF THE FIRM SUBMITTING THE LOW ACCEPTABLE DOMESTIC BID IS A SMALL BUSINESS CONCERN OR A LABOR SURPLUS AREA CONCERN ***."

INASMUCH AS THE APPLICATION OF THE FACTOR TO THE BID DID NOT DISPLACE ITS STANDING AS LOW BID, THE CONTRACTING OFFICER DECIDED THAT THE CONTRACT SHOULD BE AWARDED TO INDHACO.

BY TELEGRAM AND LETTER DATED MAY 1, 1972, TO OUR OFFICE, YOU PROTESTED AGAINST AN AWARD TO INDHACO ON SEVERAL GROUNDS. ON JULY 28, 1972, WE WERE ADVISED INFORMALLY THAT AN AWARD HAD BEEN MADE TO INDHACO PURSUANT TO FPR SEC. 1-2.407-8(B)(3) BECAUSE OF THE URGENT NEED FOR THE SERVICES.

THE FIRST BASIS FOR THE PROTEST IS THAT BY LISTING A WASHINGTON, D.C., POST OFFICE BOX NUMBER AS THE "WITHIN THE CONTINENTAL UNITED STATES" RECEIVING POINT FOR DELIVERY OF EPA DOCUMENTS, AS REQUIRED BY THE IFB, INDHACO HAS LIMITED EPA TO "MAILED" SHIPMENTS. YOU CONTEND THAT THE SPECIFICATIONS REQUIRE SHIPMENT (NOT MAILING) BY REGIONAL OFFICES OF THE SOURCE DOCUMENTS TO AN ADDRESS WITHIN THE CONTINENTAL UNITED STATES; THAT SHIPMENT CANNOT BE ACCOMPLISHED TO A POST OFFICE BOX UNLESS DELIVERY IS BY MAIL; AND THAT SINCE INDHACO HAS RESTRICTED THE MODE OF SHIPMENT, ITS BID IS NONRESPONSIVE TO THE INVITATION.

WE ARE OF THE OPINION THAT THE BID OF INDHACO WAS RESPONSIVE TO THE INVITATION. INDHACO DID NOT PROVIDE THE D.C. POST OFFICE BOX AS THE RECEIVING POINT FOR EPA DOCUMENTS, BUT RATHER AS THE OFFEROR'S ADDRESS, ENTERING IT IN THE CUSTOMARY AND REQUIRED LOCATION IN BLOCK 17 OF STANDARD FORM 33, SOLICITATION, OFFER, AND AWARD. IT IS NOTED THAT THERE IS NO SPECIFIC PLACE PROVIDED IN THE INVITATION, NOR WAS ANY SPECIFIC RESPONSE GIVEN BY INDHACO, YOUR FIRM OR THE OTHER BIDDER, AS TO WHERE EPA DOCUMENTS WERE TO BE SHIPPED.

PARAGRAPH 1, GENERAL, OF EXHIBIT I OF THE SPECIFICATIONS PROVIDES THAT THE FORMS SHALL BE MAILED OR SHIPPED TO THE CONTRACTOR WHO WILL PROVIDE TO EPA KEYPUNCHED DATA ON MAGNETIC TAPE AND THAT THE KEYPUNCHED FORMS SHALL BE RETURNED TO THE SENDER. PARAGRAPH 2, SHIPPING AND HANDLING OF FORMS, PROVIDES THAT EACH REGIONAL EPA OFFICE AND HEADQUARTERS WILL SHIP FORMS TO THE CONTRACTOR BY THE MOST DIRECT ROUTE; THAT THE CONTRACTOR'S ADDRESS FOR SHIPMENT OF FORMS MUST BE WITHIN THE CONTINENTAL UNITED STATES; AND THAT THE SHIPPING ARRANGEMENTS SHALL BE JOINTLY ARRIVED AT BY EACH REGIONAL OFFICE AND THE CONTRACTOR. THE CONTRACTING OFFICER REPORTS THAT SINCE THE SHIPPING POINT REQUIREMENT WAS GENERAL IN DESCRIPTION (WITHIN THE CONTINENTAL UNITED STATES) AND NO EVALUATION WAS TO BE PLACED UPON WHATEVER LOCATION THE OFFERORS WERE TO PROVIDE, IT WAS CONTEMPLATED THAT A LETTER WOULD BE ISSUED BY HIS OFFICE, SUBSEQUENT TO AWARD, IDENTIFYING THE APPROPRIATE ADDRESS. IN THE CIRCUMSTANCES, WE CONCLUDE THAT THE BID WAS NOT RENDERED NONRESPONSIVE BY THE ADDRESS INDICATED ON THE FACE OF THE BID AND THAT IT WAS PROPER FOR THE SUCCESSFUL BIDDER TO FURNISH THE LOCATION AT WHICH IT WOULD RECEIVE THE EPA FORMS AFTER AWARD OF THE CONTRACT.

THE SECOND GROUND FOR THE PROTEST IS THAT THE GOVERNMENT DOES NOT HAVE ONSITE INSPECTION FACILITIES IN HAITI TO MONITOR THE WORK OF INDHACO. FURTHER, YOU MAINTAIN THAT INDHACO WILL NOT BE ABLE TO LIST EMPLOYMENT OPENINGS WITH THE LOCAL OFFICE OF THE STATE EMPLOYMENT SERVICE SYSTEM AS REQUIRED BY THE CODE OF FEDERAL REGULATIONS (CFR) AT 41 CFR 50-250.

THERE IS NO REQUIREMENT IN THE IFB FOR AN ONSITE GOVERNMENT INSPECTION FACILITY AND EPA REPORTS THAT THE NATURE OF THE REQUIRED SERVICES DOES NOT DEMAND SUCH INSPECTION. FURTHER, THE LISTING OF EMPLOYMENT OPENINGS IS NOT REQUIRED FOR OPENINGS WHICH OCCUR OUTSIDE OF THE 50 STATES, THE DISTRICT OF COLUMBIA, GUAM, PUERTO RICO, AND THE VIRGIN ISLANDS, AND INDHACO WOULD, THEREFORE, NOT BE REQUIRED TO LIST JOB OPENINGS OCCURRING IN HAITI.

THE THIRD BASIS FOR THE PROTEST IS THAT THE AWARD TO INDHACO, A HAITIAN CONTRACTOR, CONSTITUTES UNFAIR COMPETITION BY VIRTUE OF THE FACT THAT IT IS PERFORMING WORK OUTSIDE THE UNITED STATES AND IT IS NOT REQUIRED TO ABIDE BY MINIMUM WAGE PROVISIONS APPLICABLE TO AMERICAN BIDDERS. FURTHER, IT IS MAINTAINED THAT INDHACO IS NOT SUBJECTED TO THE SAME INCOME AND CORPORATE TAXES AS CONTRACTORS WITHIN THE CONTINENTAL UNITED STATES.

HOWEVER, ALTHOUGH FOREIGN BIDDERS ON CONTRACTS FOR THE PERFORMANCE OF SERVICES MAY HAVE A COMPETITIVE ADVANTAGE BECAUSE THEY DO NOT HAVE TO COMPLY WITH AMERICAN MINIMUM WAGE STANDARDS, SUCH FACT CONSTITUTES NO BASIS FOR REJECTING A FOREIGN BID. FURTHER, THE CONTRIBUTION THAT A DOMESTIC CONTRACTOR MAY MAKE TO THE ECONOMY THROUGH THE PAYMENT OF TAXES IS A FACTOR TOO SPECULATIVE IN NATURE TO WARRANT CONSIDERATION IN DETERMINING THE COST TO THE GOVERNMENT OF A SPECIFIC PROCUREMENT. 176080, AUGUST 2, 1972.

THE FINAL CONTENTION IS THAT INDHACO CANNOT QUALIFY FOR AWARD UNDER THE TERMS OF THE BUY AMERICAN ACT BECAUSE IT WILL NOT BE FURNISHING A DOMESTIC PRODUCT. AS NOTED ABOVE, THE CONTRACTING OFFICER APPLIED THE "BUY AMERICAN" DIFFERENTIAL PRESCRIBED BY FPR SEC. 1-6.104-4(B) TO INDHACO'S BID. ASSUMING THAT THE BUY AMERICAN ACT WAS APPLICABLE TO THIS PROCUREMENT AND THAT THE DIFFERENTIAL WAS PROPERLY APPLIED TO INDHACO'S BID, IT IS CLEAR THAT YOUR CONCERN RECEIVED THE ONLY PREFERENCE WHICH MAY BE CONFERRED ON DOMESTIC CONCERNS UNDER THE BUY AMERICAN ACT. NOTWITHSTANDING SUCH PREFERENCE AND THE APPLICATION OF THE PERCENTAGE DIFFERENTIAL, INDHACO REMAINED THE LOW BIDDER.

FOR THE REASONS SET FORTH ABOVE, THE PROTEST IS DENIED.