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Protest challenging the terms of a solicitation is dismissed. The solicitation applied the Buy American Act to small business offerors and the Trade Agreements Act to large businesses. The solicitation also waived the nonmanufacturer rule, so small businesses could supply foreign products. The protester argued that this arrangement was unfair to large businesses. Small business could provide cheap products under the Buy American Act, but large businesses, who would be bound by the Trade Agreements Act, had to provide more expensive domestic products. GAO, however, found that this arrangement conformed to the FAR. The procurement was set aside for small businesses. FAR part 25 provides that the Buy American Act applies to small business set asides and that the Trade Agreements Act does not apply to small business set asides. The agency was merely applying the FAR as written, not setting up an unequal solicitation.

The VA issued a request for quotations to establish blanket purchase agreements for the procurement of medical supplies. The RFQ provided for a set aside based on a tiered evaluation scheme. First, the contracting officer was supposed to evaluate proposals from service-disabled veteran-owned small businesses. If award could not be made to an SDVOSB, then the contracting officer was required to evaluate proposals from veteran owned small businesses. If award could not be made to a VOSB, then proposals from HUBZone businesses and 8(a) participants had to be evaluated. If award could not be made to a small business, then the contracting officer could evaluate quotes from large businesses.

Because of the tiered evaluation, different contract clauses applied to offerors depending on their status. For instance, the RFQ provided that the FAR’s Buy American clause applied to SDVOSB’s, VOSB’s and other small business. On the other hand, the FAR’s Trade Agreement Act clause applied only to large businesses.

The RFQ further provided that the nonmanufacturer rule, which requires small businesses to supply products manufactured by domestic small businesses had been waived. This meant that if an SDVOSB, a VOSB, or another small business received the contract, they would not have to worry about where the medical supplies they provided were manufactured.

Becton, Dickinson and Company (BDC), a prospective bidder, filed a protest challenging the terms of the RFQ. BDC argued that because the RFQ waived the nonmanufacturer rule, the terms of the solicitation were not applied equally. As noted, the RFQ applied the Buy American Act to small businesses and the Trade Agreements Act to large business. Under the Buy American Act, which only expresses a preference for American-made goods, a business can propose cheap products from non-Trade Agreement Act countries. Under the Trade Agreements Act, however, business can only propose U.S. made products or the end products from certain designated countries. Because the nonmanufacturer rule had been waived, BDC contended, small businesses could provide cheap foreign product. Large business, on the other hand, that were bound by the Trade Agreements Act, had to provide more expensive domestic products.

But GAO found that this argument did not establish a violation of the procurement laws or regulations. The procurement was expressly set aside for SDVOSBs, VOSBs, and other small businesses. FAR part 25 provides that the Buy American Act applies to small business set asides, and that the Trade Agreements Act does not apply to small business set asides. There was, therefore, nothing wrong with applying the Buy American Act, and not the Trade Agreements Act, to small business. In fact, that is exactly what the FAR required.

BDC also argued that the RFQ was inconsistent with 13 C.F.R. § 121.406(b)(7), which states that wavier of the nonmanufacturer rule does not waive the requirement of the Buy American Act or Trade Agreements Act. BDC contended that the RFQ should apply the Trade Agreement Act to small business to avoid inconsistencies with 13 C.F.R. § 121.406(b)(7). But GAO did not find the RFQ inconsistent. The RFQ did not waive the Buy American Act; rather, it specifically applied the Act to small businesses. In fact, because the Buy American Act allows small business to provide foreign goods in certain circumstances, it does not conflict with the waiver of the nonmanufacturer rule.

BDC is represented by William A. Shook of The Law Offices of William A. Shook. The agency is represented by Deborah K. Morrell of the Department of Veterans Affairs. GAO attorneys Sarah T. Zaffina and Jennifer D. Westfall-McGrail participated in the preparation of the decision.