The Buy American Act… provides for the acquisition of American materials and goods for public use, except to the extent that it is inconsistent with the public interest or the cost is unreasonable. If there is a domestic offer that is not the low offer, and the restrictions of the Buy American Act apply to the low offer, the contracting officer must determine the reasonableness of the cost of the domestic offer by adding an evaluation factor (of either 6 or 12 percent for civilian agency procurements, Federal Acquisition Regulation (FAR) § 25.105(a), or 50 percent for Department of Defense procurements, DFARS § 225.105) to the low offer. The price of the domestic offer is reasonable if it does not exceed the evaluated price of the low offer after addition of the evaluation factor. FAR § 25.105(c).

For manufactured end products, the FAR uses a two-part test to define a domestic end product: (1) the article must be manufactured in the United States, and (2) the cost of domestic components (i.e., components mined, produced, or manufactured in the U.S.) must exceed 50 percent of the cost of all components. FAR §§ 25.003 and 25.101; see also DFARS § 225.101. The FAR defines “component” as an article, material, or supply incorporated directly into an end product. FAR § 25.003.

In cases involving an end product derived from a single component or material, we have looked to whether the component/material has undergone substantial changes in physical character in determining whether manufacturing has occurred…. Further, since the BAA requires both that the end product have been manufactured in the U.S. and that the cost of components mined, produced, or manufactured in the U.S. exceed 50 percent of the cost of all components, where it is alleged that a foreign material has been manufactured into a component domestically and the component in turn manufactured into an end item domestically, we have also looked at whether the manufacturing process consists of two distinct phases, the first yielding a component that is distinguishable from the original material and the second yielding an end item that is distinguishable from the component…. Where the original material is of foreign origin and we have failed to find two distinct manufacturing phases yielding two distinct products, we have found noncompliance with the two-pronged test for defining a domestic end product.

City Chemical LLC, B-296135.2, B-296230.2, June 17, 2005.

As a general rule, an agency should go beyond a firm’s self-certification for Buy American Act purposes and should not rely upon the validity of that certification where the agency has reason to believe, prior to award, that a foreign end product will be furnished. On the other hand, where a contracting officer has no information prior to award that would lead to the conclusion that the product to be furnished is a foreign end product, the contracting officer may properly rely upon an offeror’s self-certification without further investigation. Following award, whether an offeror does in fact furnish a foreign end product in violation of its certification is a matter of contract administration…. Where an agency is required to investigate further, we will review the evaluation and resulting determination as to whether the item offered is a domestic end product to ensure that they were reasonable.

…

As with the Buy America Act, when a bidder or offeror represents that it will furnish end products of designated or qualifying countries (including domestic end products) in accordance with the Trade Agreements Act, it is obligated under the contract to comply with that representation. If prior to award an agency has reason to believe that a firm will not provide compliant products, the agency should go beyond a firm’s representation of compliance with the Trade Agreements Act; however, where the contracting officer has no information prior to award which would lead to such a conclusion, the contracting officer may properly rely upon an offeror’s representation without further investigation.

Leisure-Lift, Inc., B-291878.3, B-292448.2, Sept. 25, 2003.

The Committee used informal rule-making to add the operations and facilities maintenance services at the [an Army multi-purpose range] to the Procurement List. The measuring stick for the Committee’s action is its own regulations which describe the suitability determination that the Committee must make before adding a product or service to the Procurement List. 41 C.F.R. § 51-2.4. Thus, when comparing the Committee’s action in this case to the regulation that describes the requirements of a suitability determination, the court will consider: “(1) whether the rulemaking record supports whatever factual conclusions underlie the rule; (2) whether the policy determinations behind the rule are rational; and (3) whether the agency has adequately explained the basis for its conclusion.”

Systems Application & Technologies, Inc. v. United States, 107 Fed. Cl. 795 (2012).

[The non-JWOD protester] received the contract at issue under a purchase exception, pursuant to 41 C.F.R. § 51-5.4 and 48 C.F.R. § 8.706. The granting of an exception does not have the effect of removing the contract from the JWOD procurement list—such a “deletion” is accomplished under an entirely different regulation, 41 C.F.R. § 51-6.8. Moreover, the removal of a contract from the JWOD procurement list requires the same notice and comment rulemaking procedures as are followed in adding contracts to the list. See 41 U.S.C. § 47(a)(2) (requiring the Committee to follow 5 U.S.C. § 553(b)-(e) to make additions or subtractions to the JWOD procurement list); see also 41 C.F.R. § 51 2.8(d) (additions to and deletions from the list are published in the Federal Register). Nothing of the sort was alleged to have been followed in the granting of the exception. Since the contract was not removed from the procurement list, the procedures for adding a contract to the list are irrelevant.

Magic Brite Janitorial v. United States, 69 Fed.Cl. 319 (2006).

A contracting agency needs a reasonable basis to support a decision to cancel an RFQ. We have recognized that a solicitation may be cancelled where, during the course of the procurement, the item or services involved are discovered to be on, or have been added to, the JWOD procurement list.

Here, we find that GSA had no reasonable basis to cancel the RFQ, because the tarps obtained from IBNC under the authority of the JWOD Act are not on the procurement list. Accordingly, GSA’s noncompetitive purchase of the tarps was not authorized by the JWOD Act. Given that the noncompetitive purchase of the tarps from IBNC under the JWOD Act was the agency’s only documented basis for cancellation of the RFQ, we find that GSA did not have a reasonable basis to cancel the RFQ.

See OSC Solutions, Inc, B-401498, Sept. 14, 2009.

The PIA governs the disclosure of contractor bid, proposal, or source selection information, and prohibits government representatives from “knowingly disclos[ing] contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.” 41 U.S.C. § 423(a)(1) (emphasis added). The PIA defines “contractor bid or proposal information” as:

41 U.S.C. § 423(f)(1) (emphasis added). The PIA also prohibits any person from protesting an award or proposed award alleging a violation of the PIA “unless that person reported to the Federal agency responsible for the procurement, no later than 14 days after the person first discovered the possible violation, the information that the person believed constitutes evidence of the offense.” 41 U.S.C. § 423(g) (emphasis added).

…

The court agrees with the government that [the protester’s] contention that [the government agency] violated the PIA and disclosed [the protester’s] proprietary information to [the awardee] is without merit. Omega has not alleged that [the agency] released [the protester’s] proprietary and confidential information to [the awardee] before the award of the master task order on June 20, 2007, as required by the PIA. 41 U.S.C. § 423(a)(1) (“A person… shall not, other than as provided by law, knowingly disclose contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.” (emphasis added)). Instead, [the protester] alleges that [the Government agency] violated the PIA in the fall of 2007, after the master task order had been awarded to [the awardee], and has not alleged that [the awardee] utilized [the protester’s] proprietary information to obtain the master task order or sub task orders. Furthermore, [the protester’s] allegations are untimely, because [the protester] never presented evidence to DOJ that it considered to be “evidence of the offense” under the PIA as required by 41 U.S.C. § 423(g). Accordingly, [the protester’s] contention that [the agency] violated the PIA by releasing its proprietary information to [the awardee] is without merit. The government’s motion for judgment on this claim is GRANTED.

Omega World Travel, Inc. v. United States, 82 Fed. Cl. 452 (2008).

The PIA provides that “[a] person shall not, other than as provided by law, knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.” 41 U.S.C. § 423(b). FAR § 3.104-3(a) dictates that a contracting officer who receives or obtains information of a possible violation of the PIA must determine if the possible violation has any impact on the pending award or selection of the contractor. If the contracting officer concludes that a violation may impact the procurement, the contracting officer is required to report the matter to the head of the contracting activity (HCA). FAR § 3.104-7(b). The HCA must review the information and take appropriate action, which includes either: 1) advising the contracting officer to proceed with the procurement; 2) beginning an investigation; 3) referring information to appropriate criminal investigative agencies; 4) concluding that a violation occurred; or 5) recommend to the agency head that a violation has occurred and void or rescind the contract. Id.

Here, the agency followed exactly the procedures set forth above in investigating the alleged violation. Upon receiving information concerning a potential PIA violation from [the incumbent contractor], the contracting officer referred the matter to the HCA and the [agency’s inspector general]. The [agency’s inspector general] then thoroughly investigated the record, conducted interviews, and analyzed [the incumbent computers before concluding that there was no indication of theft of GEO property or proprietary information, and no information to substantiate a PIA violation. On the basis of the investigation results, the HCA directed the contracting officer to proceed with the procurement. On this record, we see no basis to conclude that a PIA violation occurred, or that the agency’s actions were unreasonable.

…

… In any event, the agency argues, and we agree, that any protected pricing materials obtained by the [the awardee] in this manner are covered by the PIA’s “savings clause,” which provides in relevant part that “[t]his section does not… restrict a contractor from disclosing its own bid or proposal information or the recipient from receiving that information.” 41 U.S.C. § 423(h)(2).

[The protester] objects to the application of the PIA savings clause in this context. [The protester] argues that where the [awardee/former employee of the protester] failed to disclose his interest in [the awardee’s company] to [the protester], and purposefully lied to [the protester] in breach of his fiduciary duties and [the protester’s] code of ethics, the savings clause protections of the PIA have been waived. We disagree. We have repeatedly determined that the PIA’s savings provisions apply notwithstanding the fact that the voluntarily provided information is subsequently misused or not properly safeguarded. Here, [the protester] voluntarily provided its confidential information to the [awardee’s CEO] in the course of his employment with [the protester]. The [awardee’s CEO’s] alleged misuse of that information in transferring it to [the awardee], breach of his fiduciary duties to [the protester], or breach of [the protester’s] corporate code of ethics, are matters of a private dispute not for resolution by our Office.

The GEO Group, B-405012, July 26, 2011.

East West contends that NIH officials committed a procurement integrity violation by sharing “procurement-related” information with Integrity regarding the contract award prior to making an official award.

The Procurement Integrity Act, 41 U.S.C. § 423(a) (2006), prohibits any present or former official of the United States, with respect to a federal agency procurement, from “knowingly” disclosing contractor bid or proposal information or source selection information before the award of a federal agency procurement contract to which the information relates. The statute defines source selection information to include bid and proposal prices, source selection and technical evaluation plans, technical and cost/price evaluations of proposals, competitive range determinations, rankings of bids/proposals, and reports/evaluations of source selection panels, boards, or advisory councils. 41 U.S.C. § 423(f)(2).

East West, Inc., B-400325.7, B-400325.8, Aug. 6, 2010.

[The protester] states that, during the procurement, [the awardee] hired a (now-former) employee [of the protester] who had access to [the protester’s] proprietary pricing data. [The protester] asserts that, because [the awardee] lowered its proposed price between submission of initial and final revised proposals, the former [ ] employee [of the protester] must have provided [the protester’s] pricing information to [the awardee]. Accordingly, [the protester] maintains that [the awardee] violated the statutory procurement integrity provisions, 41 U.S.C. § 423 (2000), which prohibit an offeror’s unauthorized acquisition of a competitor’s proprietary information. Based on this allegation, [the protester] asserts that award to [the awardee] was improper.

Both our Bid Protest Regulations and the statutory procurement integrity provisions require—as a condition precedent to our consideration of an alleged procurement integrity violation—that a protester have reported the matter to the contracting agency within 14 days of becoming aware of the possible violation. This 14-day reporting requirement affords procuring agencies an opportunity to timely investigate alleged improprieties before completing procurement and, in appropriate circumstances, to take remedial action. See 41 U.S.C. § 423(e)(3).

…

… [the protester] clearly failed to comply with the 14-day reporting requirement regarding the alleged procurement integrity violation. Accordingly, we will not consider [the protester’s] allegations in this regard.

DME Corporation, B-401924, B-401924.2, Dec. 22, 2009.

The disclosure of source selection information, including an offeror’s price, during the course of a procurement is improper and the agency may take remedial steps, including canceling the procurement, if it reasonably determines that the disclosure harmed the integrity of the procurement process. Where an agency decides that no remedial steps are necessary, we will sustain a protest based on the improper disclosure only where the protester demonstrates that it was in some way competitively prejudiced by the disclosure. Here, the record reflects that [the protester] was not competitively prejudiced by DOD’s mishandling of its pricing information.

Health Net Federal Services, LLC, B-401652, Oct. 13, 2009.

Our Office has recognized that, in meeting their responsibility to safeguard the interests of the government in its contractual relationships, contracting officers are granted wide latitude to exercise business judgment, FAR § 1.602-2, and may impose a variety of restrictions, not explicitly provided for in the regulations, where the needs of the agency or the nature of the procurement dictates the use of those restrictions. For example, a contracting officer may protect the integrity of the procurement system by disqualifying an offeror from the competition where the firm may have obtained an unfair competitive advantage, even if no actual impropriety can be shown, so long as the determination is based on facts and not mere innuendo or suspicion. It is our view that, wherever an offeror has improperly obtained proprietary proposal information during the course of a procurement, the integrity of the procurement is at risk, and an agency’s decision to disqualify the firm is generally reasonable, absent unusual circumstances.

Kellogg Brown & Root Services, Inc., B-400787.2, B-400861, Feb. 23, 2009.

It is our view that, wherever an offeror has improperly obtained proprietary proposal information during the course of a procurement, the integrity of the procurement is at risk, and an agency’s decision to disqualify the firm is generally reasonable, absent unusual circumstances.

Computer Technology Associates, Inc., B-288622, Nov. 7, 2001.

Although we construe the RSA’s [Randolph Sheppard Act’s] arbitration provisions more narrowly than the trial court, [the protester’s] complaint alleges a violation of the RSA even under our narrower interpretation. [The protester’s] complaint hinges on the contracting officer’s exclusion of [the protester’s] bid from the solicitation’s “competitive range.” [The protester’s] amended complaint alleges that the contracting officer “abused her discretion and eliminated the [the protester], knowing that if the [the protester] was included in the competitive range, the [protester] was required to receive the contract award under the Randolph-Sheppard Act and related regulations.” Simply put, [the protester] alleges that the Army thwarted the regulations promulgated under the RSA by constructing the competitive range and evaluating [the protester’s] past performance in a way that avoided giving the state licensing agency priority in the bidding process. If there were any doubt as to whether [the protester’s] claim arises under the RSA, the complaint dispels it, as the complaint specifically alleges that [the protester] was entitled to the contract “under the Randolph-Sheppard Act and related regulations.” Because [the protester’s] complaint is premised on a violation of the RSA, it falls within the scope of the arbitration provisions of the Act.

Kentucky, Educ. Cabinet, Dep’t for the Blind v. United States,
424 F.3d 1222 (Fed. Cir. 2005).

[The State Licensing Authority’s (“SLA”)] complaint, however, raises a significant jurisdictional issue. The Randolph Sheppard Act, in addition to providing employment opportunities to blind vendors, also establishes an arbitration process within the [Department of Education] for resolution of disputes that arise under the Act. [The SLA] admits that it has not sought resolution of the present dispute through arbitration. The government’s principal argument is that recourse to arbitration is mandatory, and [the SLA’s] failure to exhaust its administrative remedies deprives this court of jurisdiction to consider [the SLA’s] post-award bid protest. [The SLA] argues, to the contrary, that the language of the RSA’s arbitration provision is permissive and primarily relies for support on this court’s opinions in Texas State Commission for the Blind v. United States, 6 Cl. Ct. 730, 735-36 & n.12 (1984), rev’d on other grounds, 796 F.2d 400 (Fed. Cir. 1986) (en banc) and Washington State Department of Services for the Blind v. United States, 58 Fed. Cl. 781, 786 n.8 (2003).

…

The arbitration scheme, therefore, envisions the DOE [Department of Education] panel to be able to, in effect, order an agency to take sufficient steps to bring its actions in compliance with the RSA if the panel concludes that the agency has run afoul of the Act’s provisions. Id. This certainly would include ordering the Army to set-aside the contract and re-bid the solicitation according to the proper standards required by law, which would include establishing a proper competitive range, the very relief [the protester] seeks from this court.

Kentucky v. United States, 62 Fed. Cl. 445 (2004).

Contrary to [the protester’s] contentions, the preferences [set out in the HUBZone Act and the RSA] are not incompatible. Each preference can be given its due. The fact that the RSA preference or priority, if triggered, is superior to the others, does not mean that the various preferences conflict. The fact that one preference is of greater value than the others does not mean that each cannot be fully applied before the contract award is made. The court finds that such is the case here, and there is no inherent conflict between the competing preferences.

Automated Communications System, Inc. v. United States, 49 Fed. Cl. 570 (2001)

As stated above, we have interpreted the RSA and its implementing regulations as vesting authority with the Secretary of Education regarding SLA complaints concerning a federal agency’s compliance with the RSA, including challenges to agency decisions to reject or not include SLA proposals in the competitive range. In our view, this meant that such complaints are subject to the RSA’s binding arbitration provisions. Our view in this regard is consistent with the stated purpose of the arbitration process, as set forth in the preamble to the regulations issued to govern the arbitration process: “It is expected that when [an SLA] is dissatisfied with an action resulting from its submittal of a proposal for the operation of a cafeteria, it will exercise its option to file a complaint with the Secretary.” Our position also reflects our more general view that where, as here, Congress has vested oversight and final decision-making authority in a particular federal official or entity, we will not consider protests involving issues subject to review by that official or entity.

Maryland State Department of Education, B-400583, B-400583.2, Nov. 7, 2008.

We agree with the protester that there was no proper basis for withdrawing the small business set-aside here. Although the preference embodied in the RSA takes precedence over small business preferences, the small business set-aside here need not be eliminated altogether in order to give effect to the RSA. Rather, we see no reason why the solicitation cannot be fashioned to accommodate both preferences. This approach is consistent with the Court of Federal Claims’ (COFC) recent decision in Automated Communication. Sys., Inc. v. United States, supra, in which the court considered the interrelationship between the preferences afforded by the RSA and the Historically Underutilized Business Zone (HUBZone) Act, 15 U.S.C. 657a (2000); FAR subpart 19.13.

Intermark, Inc., B-290925, Oct. 23, 2002.

The evaluation of proposals and the determination of whether a proposal is in the competitive range are principally matters within the contracting agency’s discretion, since agencies are responsible for defining their needs and for deciding the best method for meeting them. The criterion for inclusion in the competitive range is that a proposal must be one of the most highly rated, including cost and non-cost factors. Federal Acquisition Regulation Sec. 15.306(c). This standard applies even where a procurement is subject to the RSA priority, and there is no requirement that in order to be included in the competitive range, an SLA’s proposal must be rated as high technically as other competitive range proposals or be very close to them in price. In this instance, where only two proposals were received, both of which were technically acceptable, there is no basis to question the agency’s decision to include the SLA in the competitive range notwithstanding the 16 percent higher proposed cost, where technical factors were significantly more important than cost, both offerors’ proposed costs were within IGCE, and the SLA’s proposal was considered technically superior. As explained above, under Department of Defense regulations, where an SLA’s proposal is included in the competitive range, the SLA must be awarded the contract (absent circumstances not present here).

Cantu Services, Inc., B-289666.2, B-289666.3, Nov. 1, 2002.