TRS Research, B-283342, November 4, 1999

B-283342 Nov 04, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Agency properly rejected quotation which indicated that the vendor would supply foreign-made end item because such set-asides are restricted to sources supplying domestically produced products. The RFQ was issued as a small business set-aside for 74 steel dry freight containers /1/ under the streamlined commercial acquisition procedures set forth in Subpart 12.6 of the Federal Acquisition Regulation (FAR). Using a combined synopsis/solicitation which was posted on the Commerce Business Daily Net on March 29. The agency requested that the protester certify that its overseas supplier was a small business and also requested information regarding TRS's statement that it would "significantly transform" 50 of the required 74 containers so that the units would qualify as domestic units. View Decision Matter of: TRS Research File: B-283342 Date: November 4, 1999 DIGEST Attorneys DECISION TRS Research protests the rejection of its quotation under request for quotations (RFQ) No. DABT51-99-Q-0193, issued by the Department of the Army for certain freight containers. The agency rejected TRS's quotation because it indicated noncompliance with the requirement that all end items furnished be manufactured or produced by a small business concern within the United States. We deny the protest. The RFQ was issued as a small business set-aside for 74 steel dry freight containers /1/ under the streamlined commercial acquisition procedures set forth in Subpart 12.6 of the Federal Acquisition Regulation (FAR), using a combined synopsis/solicitation which was posted on the Commerce Business Daily Net on March 29, 1999. As amended, the RFQ provided that the Buy American Act applied to the procurement and required that firms provide a unit and total price for the containers. RFQ amend. 3, at 2. The amended solicitation also incorporated the clause at FAR Sec. 52.212-3, captioned "Offeror Representations and Certifications – Commercial Items," which requires the vendor to certify its status as a small business, and the provisions at Defense Federal Acquisition Regulation Supplement (DFARS) Sec. 252.225-7000, which implement the Buy American and Trade Agreements Acts. The agency received 12 quotes, including 3 from TRS, by the amended July 2 due date. Contracting Officer's Statement at 1. TRS's first quote, dated May 25, offered 74 containers manufactured in China and its second quote, dated June 25, offered 74 containers manufactured in Turkey. The protester's third quote, also submitted on June 25 and labeled "Alternate Bid # 1," offered 24 containers manufactured in Turkey, with the remaining 50 containers manufactured at an unspecified location. This last quote stated that the 50 units of unspecified origin "shall be once used containers significantly transformed with more than 51% U.S. content and effort thus qualifying [as] domestic end units." Agency Report, Tab 6, TRS Quotation at 1. By e-mail dated July 13, the agency requested that the protester certify that its overseas supplier was a small business and also requested information regarding TRS's statement that it would "significantly transform" 50 of the required 74 containers so that the units would qualify as domestic units. Agency Report, Memorandum from Agency to TRS 1 (July 13, 1999). The agency noted that for small business set-asides, such as this, FAR Sec. 19.502-2(c) requires that any firm proposing to furnish a product that it did not itself manufacture must furnish the product of a small business manufacturer and referenced FAR Sec. 19.102(f), which requires that nonmanufacturer suppliers in small business set-asides must furnish "the product of a small business manufacturer or producer, which end product must be manufactured or produced in the United States." FAR Sec. 19.102(f)(1). Under the regulation, a manufacturer of the end item being acquired is defined as the concern which, with its own forces, transforms inorganic or organic substances including raw materials and/or miscellaneous parts or components into such an end item. Id. By memorandum dated July 16, TRS responded that it purchased containers "originally manufactured in foreign countries" and shipped the containers to a U.S. small business remanufacturing facility. Agency Report, Tab 20, Memorandum from TRS to Agency 1 (July 16, 1999). TRS explained that: The remanufacturing facility removes the previous [owner's] markings and decals, pre-masks the weight panels, serial numbers and all required [Industrial Standards Organization] ISO markings, straightens any possible dents, steam cleans [where] necessary, sand blasts any [possible] surface rust which may have occurred in transportation or handling, then paints the unit, thus providing TRS with a conforming, completed container pursuant to your specification in the solicitation which is a domestic end product.