CSK International, Inc., B-278111; B-278111.2, December 30,

CSK International, Inc., B-278111; B-278111.2, December 30, BNUMBER: B-278111; B-278111.2 DATE: December 30, 1997 TITLE: CSK International, Inc., B-278111; B-278111.2, December 30, 1997 ********************************************************************** Matter of:CSK International, Inc. File: B-278111; B-278111.2 Date:December 30, 1997 James P. Rome, Esq., for the protester. John E. Rodgers for Barco Industries, Inc., an intervenor. Marie Adamson Collins, Esq., General Services Administration, for the agency. Christina Sklarew, Esq., and Paul Lieberman, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Under procurement subject to the Trade Agreements Act (TAA), agency properly rejected a bid offering a tool that consists of a tool head produced in a nondesignated country and a tool handle produced in the United States; assembly of the tool head and handle does not represent the type of "substantial transformation" of these elements required to qualify as a "U.S. made end product" for TAA purposes. DECISION CSK International, Inc. protests the rejection of its bid by the General Services Administration (GSA) under invitation for bids (IFB) No. 7FXI-J6-97-5102-S for a quantity of pulaski tools and handles. We deny the protest. The IFB, issued on May 30, 1997, contemplated the award of a requirements contract for a pulaski tool, which is a combination axe and mattock of forged steel, fastened to a hickory wood handle, that is used primarily for clearing brush, small logs, and other surface debris, and for digging in the soil to construct fire lines in wildfires and controlled burn operations. In addition to the axe head and handle, the IFB required an equal number of replacement handles in anticipation of their eventual need, since the handle typically cracks or breaks before the axe head is worn out. The IFB identified the axe head and handle by national stock numbers and included specifications and drawings, supplied by the Forest Service, describing the exact item required. The IFB indicated that it was subject to the Trade Agreements Act of 1979 (TAA), 19 U.S.C. sec. 2501-2582 (1994), pursuant to which the President waived the provisions of the Buy American Act. The TAA is implemented by Federal Acquisition Regulation (FAR) Subpart 25.4 which requires offerors/contractors to deliver under the contract only eligible products,[1] unless a waiver (based on national interest) has been granted to permit delivery of ineligible country products. FAR 25.402(c). The IFB incorporated by reference a General Services Administration Acquisition Regulation clause, 48 C.F.R. sec. 552.225-9, implementing provisions of the TAA, which provides that, under certain circumstances, an end product made of components from nondesignated countries,[2] but assembled in the United States, may be considered a "U.S. made end product," as follows: "U.S. made end product," as used in this clause, means an article which (1) is wholly the growth, product, or manufacture of the United States, or (2) in the case of an article which consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed. The agency received five timely bids, including CSK's. When the bids were opened, it was apparent that CSK had submitted the low price. The contracting officer ordered pre-award surveys on CSK in anticipation of awarding the contract to the firm. During an inspection of CSK's facility, it was discovered that the axe head that the firm had offered and intended to furnish was manufactured in China, a nondesignated country. The contracting officer determined on this basis that CSK's offer failed to comply with the requirements of the TAA and therefore rejected the bid. CSK protests that its bid was improperly rejected because its pulaski tool qualifies as a U.S.-made end product.[3] Under the applicable GSA clause, the pulaski tool will only be considered a U.S.-made end product if the component parts have been "substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed." 48 C.F.R. sec. 552.225-9. CSK argues that in order to determine whether "substantial transformation" has occurred, one must compare the character of a component prior to its incorporation into an end product and its character after such incorporation.