Power Connector, Inc., B-285395, August 24, 2000

B-285395 Aug 24, 2000 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protest that agency improperly awarded a small business set-aside contract to a source offering a foreign product is sustained because such set-asides are limited to sources supplying domestically-produced products. PCI argues that Day Leather's offer of imported leather from Brazil is ineligible for award because the solicitation required domestic leather. Inc. is a wholly-owned government corporation within the Department of Justice that operates under the trade name UNICOR at various correctional institutions in the federal prison system. The leather at issue here will be used by UNICOR's facility at the Federal Correctional Institution at Sandstone. To the offeror whose proposal was considered most advantageous to the government. View Decision Matter of: Power Connector, Inc. File: B-285395 Date: August 24, 2000 DIGEST Attorneys DECISION Power Connector, Inc. (PCI) protests the award of a contract to Day Leather Corporation under request for proposals (RFP) No. 1PI-R-1579-00, issued by Federal Prison Industries, Inc., for 1.5 million square feet of leather. PCI argues that Day Leather's offer of imported leather from Brazil is ineligible for award because the solicitation required domestic leather. We sustain the protest. BACKGROUND Federal Prison Industries, Inc. is a wholly-owned government corporation within the Department of Justice that operates under the trade name UNICOR at various correctional institutions in the federal prison system. RFP at 4. The leather at issue here will be used by UNICOR's facility at the Federal Correctional Institution at Sandstone, Minnesota, to manufacture work gloves for the General Services Administration and the U.S. Forest Service. Agency Report at 2. The solicitation anticipated award of an indefinite-delivery/indefinite-quantity contract for 1 base year, with 1 option year, to the offeror whose proposal was considered most advantageous to the government. RFP at 4, 32. The following factors, in descending order of importance, were to be used in evaluating offers: past performance, compliance with specifications, and price. Id. at 32. Set forth in full within the solicitation was Federal Acquisition Regulation (FAR) clause 52.219-6, "Notice of Total Small Business Set-Aside (Jul 1996)," which reserved this requirement for exclusive small business participation. Id. at 18. In relevant part, this clause states: Agreement. A small business concern submitting an offer in its own name agrees to furnish, in performing the contract, only end items manufactured or produced by small business concerns in the United States. Id. In addition, the solicitation incorporated by reference the following FAR clauses: 52.225-9, entitled "Buy American Act--Trade Agreements--Balance of Payments Program (Jan 1996)"; and 52.225-21, entitled "Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program (Jan 1997)." /1/ These clauses--and the statutes and agreements they implement--permit offerors to provide foreign end items, and describe whether, and how, an evaluation differential will be applied to the non-domestic items. In response to the solicitation, the agency received five proposals from three offerors. The awardee, Day Leather, and a second offeror both submitted a single proposal offering foreign leather. In contrast, PCI submitted three proposals--one offering domestic leather, one offering foreign leather, and one offering a mixture of foreign leather and domestic processing that the company urged the agency to evaluate as a domestic end product. PCI Cover Letter for Proposals, Apr. 11, 2000. In reviewing the proposals, the agency evaluated past performance using adjectival ratings, and evaluated compliance with the specifications on a pass/fail basis, based on a review of bid samples. Since all five proposals passed the specification review--and were thus equal under this criterion--we set forth below only the proposed prices and past performance ratings of the five proposals: OFFEROR PAST PERFORMANCE PRICE RATING Day Leather [deleted] $ 4.110 million (foreign leather) Offeror A [deleted] [deleted] (foreign leather) PCI -- Proposal 1 [deleted] [deleted] (foreign leather) PCI -- Proposal 2 [deleted] [deleted] (mixed source) PCI -- Proposal 3 [deleted] [deleted] (domestic leather) Agency Report, at 4. Based on these results, the contracting officer selected Day Leather's proposal for award on the basis of the proposal's lowest price and highest past performance rating. Id. The agency gave no consideration to whether the proposals offered foreign or domestic leather. This protest followed. DISCUSSION As a preliminary matter, there is no dispute in this case that an agency may not purchase a foreign product under a small business set-aside. FAR Sec. 19.102(f)(1): TRS Research, B-283342, Nov. 4, 1999, 99-2 CPD Para.