Contract Award Protest

A firm protested the award of a contract contending that the District of Columbia failed to apply the small business and labor surplus area differential required by the Buy American Act when evaluating the Canadian awardee's bid and that proper bid evaluation would have resulted in an award to itself. The protester asserted that this evaluation preference is required by an Executive order and by Federal Procurement Regulations notwithstanding that the District's procurement procedures for construction construction contracts do not require this differential. The protester insisted that the contract was primarily a supply contract rather than a construction contract and that the bid should have been analyzed according to the District's regulations for supply contracts. It also argued that, if the construction contract rules applied, the awardee's bid was ineligible for award because the construction materials supplied would be contrary to an invitation for bids (IFB) requirement for the use of domestic material. The District contended that the requirement constituted a construction contract. The question raised by the protester as to whether the IFB should be considered a construction or supply procurement was untimely raised. The IFB made it clear that the District considered this procurement a construction contract. Therefore, this basis of the protest should have been protested prior to bid opening. However, the allegation as to the application of the Buy American Act was timely and was considered. The District procurement procedures contain Buy American provisions for construction contracts which provide for the addition of a 6-percent differential to the cost of all nondomestic construction material offered in the bid. In this case, the cost of domestic construction material was greater than the cost of the foreign bid plus a 6-percent differential. Applying the 6-percent differential to the entire bid price would not have changed the relative standing of the parties. The Buy American Act does not absolutely prohibit the procurement of foreign materials but establishes a preference for domestic material by requiring that a differential be added to the price bid on any material of foreign origin. The District's decision that the domestic bids were unreasonable as to cost amounted to a waiver of the Buy American Act. GAO held that this action was consistent with the Act. Accordingly, the protest was denied.