Decided: November 18, 2021
Agency: Defense Logistics Agency (“DLA”)
Disposition: Protest Denied
Keywords: Bid Protest Jurisdiction; GAO Jurisdiction; Beyond the Scope
General Counsel, P.C. Protest Insight:
This protest highlights the difficulty for a protester to succeed on a bid protest based on noncompliance with the Buy American Act (“BAA”). Here, GAO made clear that deference will be given to an agency’s reasonable reliance on an offeror’s self-certification, unless the agency had reason to believe, prior to award, that an offeror would not provide domestic products. Without a reason to doubt an offeror’s self-certification prior to award, further investigation by the agency is not required. After award, whether or not an offeror breached its duty to comply with the BAA is a matter of contract administration, which is not subject to resolution under GAO Bid Protest Regulations. Additionally, GAO stated that notice of prior noncompliance must be supported by substantive facts to require further investigation by an agency rather than reliance on an offeror’s self-certification. Unsupported allegations by a competitor alone do not impose an obligation on the agency to conduct a detailed investigation.
Summary of Facts
Sea Box, Inc., a small business, protests the issuance of a purchase order to W&K Containers, Inc., under RFQ No. SPE8ED-21-Q-1167, issued by the Defense Logistics Agency (“DLA”). The solicitation was issued on August 19, 2021, as a small business set-aside for Tricon freight containers. The RFQ incorporated the Buy American Statute — Balance of Payments Program Certification and Buy American and Balance of Payments Program, into the solicitation. The Buy American Act requires vendors to certify that their end products are domestic, from a qualifying country, or foreign. If an end-product is identified as a foreign end-product, the agency must apply a 50% evaluation factor to a quotation if the low-priced quotation is a foreign quotation that is not exempt.
DLA received quotations from Sea Box and W&K. W&K quoted a lower price than Sea Box and identified itself as a dealer of containers manufactured by a domestic company, listed the manufacturer’s commercial and government entity number, and identified its containers as “Domestic End Products.” DLA issued the purchase order to W&K and Sea Box filed this protest.
Basis of Protest
Sea Box alleges that W&K’s quoted end-product is not a domestic end-product because the item does not meet the component test and does not qualify as a commercially available off-the-shelf (COTS) item. Thus, Sea Box argues that DLA should have treated W&K’s product as a foreign end-product and applied a 50% evaluation factor. Sea Box also argues that DLA should have inquired into W&K’s COTS eligibility prior to award. DLA argues that it reasonably relied on W&K’s BAA self-certification and had no reason to request additional supporting documentation regarding W&K’s COTS status because the agency had no reason to believe that W&K’s BAA certification contained a misrepresentation.
GAO stated that when a vendor or offeror represents that it will provide domestic end products in compliance with the Buy American Act, it is obligated to comply with that representation. If an agency has reason to believe, prior to award, that a firm will not provide domestic products, the agency should go beyond a firm’s representation of compliance with the BAA. However, where a contracting officer has no information prior to award that would lead to the conclusion that the product to be furnished is not a domestic end-product, the contracting officer may properly rely upon an offeror’s self-certification without further investigation. GAO clarified that “unsupported allegations that a competitor’s product is not in compliance with its Buy American Act certification do not impose an obligation on the contracting officer to conduct a detailed investigation behind that certification.” GAO noted that whether an offeror does in fact furnish a foreign end-product in violation of its certification is a matter of contract administration.
GAO found that W&K affirmed that it would furnish a domestic end-product and provided the CAGE number of its domestic manufacturer and, thus, DLA reasonably determined that W&K’s quotation presented no questions regarding the validity of its BAA certification. While Sea Box asserts that it was unreasonable for DLA to rely on W&K’s self-certification because the agency was on notice that W&K’s BAA certification was invalid, GAO disagreed. Sea Box argues DLA was on notice because of (1) a prior GAO protest that was filed and withdrawn by W&K and (2) an email exchange between Sea Box and DLA representatives. DLA was involved in a prior protest filed by W&K regarding domestic end products and COTS eligibility for an unrelated procurement for a different type of container, but W&K withdrew the protest. Thus, GAO never addressed the merits of the allegation raised in that protest and never formally determined that W&K’s containers were not COTS eligible. Sea Box offered no substantive evidence establishing that W&K misrepresented its end-product status on its BAA certification.
In the emails referenced by Sea Box, Sea Box indicated to DLA representatives that it didn’t believe that W&K sells Tricons in substantial quantities in the commercial marketplace. However, Sea Box provided no factual information in those emails to support its allegations that W&K’s products were not COTS eligible and couldn’t qualify as domestic end products. GAO stated that “unsupported allegations lodged by a competitor that another competitor’s products–in unrelated procurements–were not in compliance with its Buy American Act certification does not impose an obligation on the contracting officer to conduct a detailed investigation behind that certification.”
Through its certification and subsequent award of the purchase order, W&K is bound to comply with the BAA. GAO held that whether or not W&K breached its duty to comply with the BAA is a matter of contract administration, which is not subject to resolution under GAO Bid Protest Regulations.
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