Sabreliner Corporation

Sabreliner Corporation BNUMBER: B-275163; B-275163.2; B-275163.3 DATE: December 31, 1996 TITLE: Sabreliner Corporation ********************************************************************** Matter of:Sabreliner Corporation File: B-275163; B-275163.2; B-275163.3 Date:December 31, 1996 Kenneth B. Weckstein, Esq., and Janine S. Benton, Esq., Epstein, Becker & Green, for the protester. Lisa V. Gressel, Esq., for General Electric Company, an intervenor. Clarence D. Long III, Esq., and John E. Lariccia, Esq., Department of the Air Force, for the agency. Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Solicitation for overhaul of Air Force-owned aircraft engines, for which replacement parts are furnished by the government, is properly considered by the agency to be contract for services to which Buy American Act does not apply. DECISION Sabreliner Corporation protests the specifications in request for proposals (RFP) No. F41608-96-R-49674, issued by the Department of the Air Force for overhaul and repair services on the J85 aircraft engine and management items subject to repair associated with the engine. Sabreliner argues that the Buy American Act (BAA) (41 U.S.C. sec. 10a (1994)) applies to this requirement and that offers should be evaluated giving preference to American-made end products.[1] We deny the protest. The RFP, issued on August 9, 1996, contemplated the award of a firm, fixed-price contract for the conduct of depot level repair and overhaul of the J85 engine in accordance with technical order procedures. The awardee will furnish all resources, including test and support equipment, special tooling, material, and engineering support necessary to conduct the overhauls and repairs. The government is to furnish the J85 engines requiring overhaul or repair as well as needed replacement parts. An amendment to the RFP advised prospective offerors that the government considered the acquisition to be for services and that the BAA did not apply. Accordingly, the solicitation does not call for the agency to apply a BAA price adjustment factor as part of the price evaluation. The RFP also incorporated by reference the clause at Federal Acquisition Regulation (FAR) sec. 52.222-20, Walsh-Healey Public Contracts Act (WHA) (41 U.S.C. sec. 35-45 (1994)), which is applicable to supply contracts and which requires offerors to make certain representations and stipulations and to pay its employees not less than the minimum wage prescribed by the Secretary of Labor. Sabreliner contends that this procurement is ultimately for supplies, not services alone, and thus, the BAA applies, which calls for a preference for American-manufactured end products. We disagree. The BAA applies to supply contracts exceeding the micro-purchase threshold and to services contracts that involve the furnishing of supplies when the supply portion of the contract exceeds the micro-purchase threshold. FAR sec. 25.100. The BAA requires, with certain exceptions, that only domestic end products be acquired for public use, and the FAR implements the requirement by the application of stated price evaluation preference factors. FAR sec. 25.105, 25.102(a). "End products" are defined as "articles, materials and supplies . . . acquired for public use under the contract." FAR sec. 25.101. The contract here is for repair and overhaul services on engines owned by the U.S. Government. While the contractor returns the engines to the government when the services are completed, the government is not acquiring end products; it is simply taking possession of items it already owns. In this regard, we have long recognized that repair and overhaul contracts are basically agreements for services which are outside the scope of the BAA. Bell Helicopter Textron, 59 Comp. Gen. 158 (1979), 79-2 CPD para. 431; Bell & Howell Co., B-202114, May 20, 1981, 81-1 CPD para. 395. Sabreliner argues that the inclusion in the solicitation of the WHA clause, instead of the Service Contract Act clause (FAR sec. 52.222-41), establishes that the contract is one for supply rather than services.[2] However, the agency explains, without contradiction, that the overhaul and repair of the J85 engines constitutes extensive remanufacturing of the engines and is equivalent to manufacturing. The FAR provides that where, as here, remanufacturing is so extensive as to constitute manufacturing, the WHA applies instead of the Service Contract Act. FAR sec. 22.1003-6. Thus, there is nothing objectionable in the agency's use of the WHA clause in this service contract, and its use is not inconsistent with the agency's determination that the BAA is inapplicable here.