New The protester argues that the solicitation's prohibition on foreign goat/kidskin leather is unduly restrictive of competition and contrary to governing regulations. In this regard, the protester notes that the regulations implementing the Berry Amendment expressly provide for an exception from the Amendment's domestic source restrictions for goat and kidskins. The protester further argues that, even if it was permissible for the agency to make such a restriction based on its market research into the availability of domestic goat/kidskin, the market research actually conducted by the agency here was unreasonable.

Application of Berry Amendment

Section 225.7002-1 of the DFARS implements the restrictions found in the Berry Amendment, 10 U.S.C. § 2533a, prohibiting the use of appropriated funds for items, including clothing and handwear items, where the item is not "grown, reprocessed, reused, or produced in the United States." DFARS § 225.7002-1(a)(1). This restriction was incorporated into the solicitation here via DFARS clause 252.225-7012, "Preference for Certain Domestic Commodities."

Both DFARS sections contain an exception to these requirements which states that the applicable restriction does not apply to "items listed in section 25.104(a) of the Federal Acquisition Regulation (FAR)." DFARS clause 252.225-7012(c)(1); see also DFARS § 225.7002-2(c). Section 25.104(a) of the FAR, which falls within the FAR section implementing the Buy American Act, lists various "[n]onavailable articles," including "[g]oat and kidskins." FAR § 25.104(a). Nonavailable articles are defined as those articles for which there has been a "[c]lass determination" that domestic sources can meet only 50 percent or less of total U.S. government and nongovernment demand. FAR § 25.103(b)(1).

The protester argues that because goat and kidskins fall within an express exception to the DFARS provisions implementing the Berry Amendment, it was both unreasonable and contrary to regulation for the agency to impose a domestic source restriction on the goat/kidskin leather used to make the gloves being sought here.

In response to this argument, the agency asserts that the meaning of the exception found at DFARS § 225.7002-2(c) and DFARS clause 252.225-7012(c)(1) cannot be understood in isolation and instead must be interpreted in conjunction with other considerations, including the provisions of FAR § 25.103(b)(1), the history of the applicable FAR provisions, and the purpose of the Berry Amendment. The agency argues that these considerations make clear that the agency is required to conduct market research to determine the availability of articles before accepting that those articles qualify for a nonavailability exception.

With respect to the provisions of FAR § 25.103(b)(1), DLA argues that this provision contains guidance that clarifies the application of the FAR § 25.104(a) nonavailability exception. In support of this assertion, the agency notes that FAR § 25.104(a) provides that the nonavailable articles listed in that section "have been determined to be nonavailable in accordance with [FAR] 25.103(b)(1)(i)." Section 25.103(b)(1)(i), in turn, states that this nonavailability determination "does not necessarily mean that there is no domestic source for the listed items, but that domestic sources can only meet 50 percent or less of total U.S. Government and nongovernment demand." DLA further notes that FAR § 25.103(b)(1)(ii) specifically requires the contracting officer to perform market research before relying on the list in FAR § 25.104(a), and FAR § 25.103(b)(1)(iii) states that the nonavailability determination does not apply if the contracting officer learns at any time before the close of the solicitation that there is sufficient domestic supply. Taken together, DLA argues that these provisions mean that the agency is required to conduct market research before determining an article qualifies for the nonavailability exception, including when applying that exception to the Berry Amendment's domestic sourcing restrictions.

Notwithstanding DLA's contentions, as set forth below, we see no support in the applicable FAR and DFARS provisions for DLA's contentions that the market research provisions of FAR § 25.103(b)(1)(ii) and (iii) are applicable to the Berry Amendment's domestic sourcing restrictions implemented in the DFARS. Without such a connection between the two similar, but distinct schemes, we conclude the agency has not established that it has the authority to use the FAR Buy American Act's market research provisions to evade the applicability of the "nonavailable articles" exception to the Berry Amendment.

The DFARS sections implementing the Berry Amendment clearly state that "[a]cquisitions in the following categories are not subject to the restrictions found in [DFARS §] 225.7002-1 . . . (c) [a]cquisitions of items listed in FAR 25.104(a)." DFARS § 225.7002-2; see also DFARS clause 252.225-7012(c) ("This clause does not apply . . . [t]o items listed in section 25.104(a) of the [FAR] or other items for which the Government has determined that a satisfactory quality and sufficient quantity cannot be acquired as and when needed at U.S. market prices."). These DFARS sections do not contain any limiting language or carve outs, e.g., a statement to the effect that the FAR § 25.104(a) exception does not apply where the agency finds that such items are, in fact, available in sufficient quantity and quality. Nor do the DFARS sections reference the market research contemplated in certain subsections within FAR § 25.103, which is a Buy American Act provision. In fact, the DFARS sections discussed above do not mention FAR § 25.103 at all. The plain language of these DFARS sections therefore does not support the agency's position that the applicable Berry Amendment exception is itself subject to an exception when the agency determines, via market research, that the applicable item is sufficiently available for purposes of the specific acquisition at issue.

Similarly, the language of FAR § 25.103 does not reflect an intention for that provision to apply to Berry Amendment restrictions. Instead, the provision addresses exceptions to the Buy American Act. See FAR § 25.103 ("when one of the following exceptions applies, the contracting officer may acquire a foreign end product without regard to the restrictions of the Buy American statute. . . ."); FAR § 25.103(b) ("Nonavailability. The Buy American statute does not apply with respect to articles, materials, or supplies if articles, materials, or supplies of the class or kind to be acquired . . . are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality."). Indeed, FAR § 25.103(b)(1) directs the contracting officer, upon making an availability determination, to "[e]nsure that the appropriate Buy American statute provision and clause are included in the solicitation." FAR § 25.103(b)(1)(iii).

The agency argues that our Office should look beyond the language of the applicable provisions, and take into consideration the history of the FAR provisions at issue, as well as the general policy underlying the Berry Amendment of protecting domestic sources of supply. In support of this argument, the agency asserts that in 2005, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council amended the FAR to clarify the intent of the nonavailability list provided at FAR § 25.104(a) and to "emphasize the need to conduct market research." Fed. Acquisition Regulation; Nonavailable Articles-Policy, 69 Fed. Reg. 29632 (May 24, 2004) (proposed rule), final rule issued at 70 Fed. Reg. 11742 (Mar. 9, 2005).

Additionally, prior to this revision, DLA's senior procurement executive issued a policy memorandum requiring that market research be conducted for items listed in FAR § 25.104(a), particularly for those items covered by the Berry Amendment. See Supp. AR, exh. 4, Memo. on Berry Amendment/Buy American Act Market Research Requirements, PROCLTR 03-21, at 1 (Dec. 8, 2003). The agency argues that this emphasis on market research, particularly for items covered by the Berry Amendment, led to the current iteration of FAR § 25.103. In light of this history, DLA contends that "the only reasonable interpretation of the interplay between DFARS [§] 225.7002-2(c) and FAR [§§] 25.103 and 25.104 is that it is both appropriate and required for a contracting officer to conduct market research when acquiring a Berry Amendment covered item or material listed at FAR [§] 25.104(a) rather than blindly applying the Berry Amendment exception at DFARS [§] 225.7002-2(c) without considering potential domestic availability." Supp. Memo. of Law at 5-6.

We find this argument unavailing. Where, as here, the language of a regulation is plain on its face, and its meaning is clear, there is no reason to move beyond the plain meaning of the text. Edmond Sci. Co., B-410179, B-410179.2, Nov. 12, 2014, 2014 CPD ¶ 336 at 7 n.9. Moreover, nothing in the relevant history demonstrates a clear intention for the market research requirements contained within FAR § 25.103, and applicable to the Buy American Act, to apply to Berry Amendment restrictions. While the agency relies on references to market research in the proposed rule amending FAR §§ 25.103 and 25.104, nothing in either the proposed rule or the final rule mentions the Berry Amendment. Similarly, the agency has not cited any support within the history of the DFARS sections to suggest that these sections were meant to be subject to FAR § 25.103. Additionally, while the agency cites to a policy memorandum drafted by DLA, as well as various general policy considerations, in support of its interpretation, the plain language of the relevant regulations at issue does not support this interpretation.

Although this reading of the relevant FAR and DFARS sections creates a divergence between the nonavailability determinations conducted under the Berry Amendment and the Buy American Act, this distinction stems directly from the language of the regulations themselves. The Buy American Act provisions found at FAR § 25.103 contemplate a comprehensive nonavailability determination that takes into consideration the contracting officer's market research, with the result being the application of the Buy American Act, even when the item being sought is listed at FAR § 25.104(a), where the contracting officer finds that the item is "available domestically in sufficient and reasonably available commercial quantities of a satisfactory quality to meet the requirements of the solicitation." FAR § 25.103(b)(1)(iii). In contrast, the Berry Amendment DFARS sections do not cite or incorporate FAR § 25.103, and instead state that application of the Berry Amendment restrictions do not apply "[t]o items listed in section 25.104(a) of the Federal Acquisition Regulation (FAR)." Nothing in this language, which applies to items found to be nonavailable in relation to total market demand, anticipates overriding the exception where the contracting officer finds the item to be domestically available in sufficient quantity and quality to meet the agency's acquisition need.

In sum, we conclude that the DFARS sections implementing the Berry Amendment do not require the agency to impose a domestic restriction on the goat/kidskins at issue here since this item qualifies for an applicable exception. Because we find that this domestic restriction is not required by an applicable regulation, and because the agency has not otherwise asserted that the restriction is reasonable or is needed to meet DLA's minimum needs, we find that the agency has not met its responsibility of establishing that the restriction is reasonably necessary to meet its needs.[3] See GlobaFone Inc.,
B-405238, Sept. 12, 2011, 2011 CPD ¶ 178 at 3 (where a protester challenges a specification as "unduly restrictive," the procuring agency has the responsibility of establishing that the specification is reasonably necessary to meet its needs).  (Mechanix Wear, Inc. B-416704, B-416704.2: Nov 19, 2018)

Inspire International protests the award to Lag Sports, arguing that the awarded contract price was so low that it could only be based on an intent to furnish non‑domestic products, in violation of the Berry Amendment. Protest at 1. In support of this allegation, the protester asserts that the Marner Group, named in the RFQ as a brand name manufacturer of the style of cap sought, agrees that the required quantity of that company’s products could not be manufactured and resold for the price of the awarded contract. Id.

In reviewing an agency’s technical evaluation of vendor submissions under an RFQ, we will not reevaluate the quotations; we will only consider whether the agency’s evaluation was reasonable and in accordance with the evaluation criteria listed in the solicitation and applicable procurement statutes and regulations. American Recycling Sys., Inc., B-292500, Aug. 18, 2003, 2003 CPD ¶ 143 at 4. In determining the technical acceptability of a quotation, an agency may not accept at face value a promise to meet a material requirement where there is significant countervailing evidence, reasonably known to the agency, that should create doubt whether the vendor will or can comply with that requirement. MMI-Federal Marketing Service Corp., B-297537, Feb. 8, 2006, 2006 CPD ¶ 38 at 5. With regard to domestic manufacturing requirements, we have concluded that an agency should go beyond an offeror’s self-certification where the agency has reason to believe, prior to award, that a vendor will not provide compliant products. See Leisure-Lift, Inc., B-291878.3, B-292448.2, Sept. 25, 2003, 2003 CPD ¶ 189 at 3-4.

On this record, we find that the agency reasonably relied on the representations made in Lag Sports’s quotation, and also sought additional reassurances regarding the domestic manufacture of the caps. Lag Sports’s quotation provided the representations and certifications required by the RFQ with regard to its intent to comply with the domestic production requirements of the Berry Amendment and Buy America Act. AR, Tab 5, Lag Sports Quotation, at 21-23, 44.

The protester, however, insists that the low price offered by Lag Sports’s quotation was sufficient to alert the agency that the awardee did not intend to comply with the Berry Amendment, and to require additional scrutiny. We disagree with the assertion that the awardee’s price, by itself or in comparison with an incumbent’s price, is dispositive of the vendor’s intent. For example, a firm, in its business judgment, properly may decide to submit a price that is extremely low, or even below the cost of performance. Government Contracts Consultants, B‑294335, Sept. 22, 2004, 2004 CPD ¶ 202 at 2. Moreover, notwithstanding the self-certification regarding the awardee’s intended compliance here, the Army sought additional information from Lag Sports and received assurances regarding the awardee’s intent to comply with the requirements of the Berry Amendment. AR, Tab 7, Correspondence. In its response, Lag Sports identified the domestic mills that would be supplying the fabric it would use to make the caps, and confirmed that Lag Sports itself would be manufacturing the caps in the United States.

In short, Inspire International has not shown that the Army failed to follow the required procedures for ascertaining the awardee’s intent with regard to the Berry Amendment, nor has it shown any reasonable basis to conclude that the awardee will furnish noncompliant products.  (Inspire International B-413798: Dec 8, 2016)

As it relates to the protest, the RFP included Department of Defense Federal Acquisition Regulation Supplement (DFARS) Clause 252.225-7012, “Preference for Certain Domestic Commodities.” RFP at 54. This clause provides that articles of clothing, defined to include gloves (referred to as “handwear”), offered in response to the solicitation, must be produced in the United States. DFARS 252.225-7012. This provision implements the requirements of 10 U.S.C. § 2533(a) (2006), commonly referred to as the “Berry Amendment.” The Berry Amendment generally restricts the Department of Defense’s expenditure of funds for certain articles (including “clothing”) to domestically produced products. See 10 U.S.C. § 2533a(b).

Integrity’s offer was one of six submitted in response to the RFP. During the course of proposal evaluations, the agency determined that Integrity’s proposal was unacceptable because the items proposed by Integrity were to be manufactured in Malaysia, and therefore did not qualify as domestically produced.[2] Agency Report (AR), at 6-7. In a letter dated May 30, 2012, the agency advised Integrity that its proposal had been found unacceptable because “the end items proposed [ ] will not be produced in the United States.” AR, Encl. 10, Letter to Integrity, May 30, 2012. Integrity filed this protest on June 6.

Integrity argues that the electrical gloves at issue should not be considered “clothing” within the meaning of the Berry Amendment and DFARS Clause 252.225-7012, and, as a consequence, the domestic source restrictions do not apply. In this regard, Integrity maintains that the electrical gloves are worn solely to protect against electrical shock and therefore should be regarded as a “tool” (characterizing the gloves as “’insulating liners’”) rather than an article of “clothing.” See Protest at 1; Comments at 1. The protester’s emphasis on the protective nature of the gloves is misplaced, however. The term “clothing,” as used in the Berry Amendment, is understood to include “a wide variety of items,” including items worn for the purpose of protection. Gumsar, Ltd., B-231630, Oct. 6, 1988, 88-2 CPD ¶ 329 at 4 (holding that term “clothing” in Berry Amendment encompassed protective coverings worn by civilian personnel to access toxic areas to dismantle chemical munitions). Accordingly, we have no basis to conclude that the agency acted unreasonably when it rejected Integrity’s gloves pursuant to the domestic production restrictions established by the Berry Amendment.  (Integrity Supply, B-406860, Sep 10, 2012)  (pdf)

MMI contends that the agency unreasonably relied upon information provided by Iguana certifying that it would comply with the Berry Amendment in the impregnation of the bednet fabrics with permethrin. As discussed in detail below, the agency requested that Iguana provide information to establish its quotation’s compliance with the Berry Amendment, and the agency relied upon this information to determine that Iguana’s quotation did comply. It is clear, however, based on our review of the record, that Iguana’s submissions did not convey the information that the agency believed was required to establish compliance with the Berry Amendment. In sum, we believe that the agency’s evaluation of Iguana’s quotation was unreasonable. Because Iguana’s quotation as originally submitted disclosed a manufacturing process in China that violated the Berry Amendment requirements, and because Iguana advised the agency that domestic facilities capable of performing the EXPEL impregnation processes were not then available, the agency was required to verify, prior to award, that Iguana’s intended manufacturing process would comply with the Berry Amendment. The agency’s pre-award determination regarding Iguana’s compliance was flawed because the agency relied on inadequate information to satisfy its concerns. Although Iguana identified Burlington as the domestic facility where permethrin impregnation would occur, the establishment number relied upon by the agency to verify Iguana’s self-certification of Berry Amendment compliance could not, as the agency acknowledges, have provided sufficient information needed to determine whether Burlington could perform the work. Instead, the agency confirms that, aside from verifying that the EPA establishment number for Burlington was valid, the agency did not determine whether Burlington, Bickel and Iguana had made the required arrangements to establish that Iguana’s quotation complied with the Berry Amendment. Furthermore, there is still substantial doubt as to whether post-award changes to Iguana’s manufacturing process bring Iguana’s quotation into compliance with the Berry Amendment, and the record does not show that the agency has evaluated these post-award changes. (MMI-Federal Marketing Service Corp., B-297537, February 8, 2006) (pdf)