Government Contracts Government Couldn’t Justify Domestic Source Restriction
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Friday, December 21, 2018

Government Couldn’t Justify Domestic Source Restriction

By Government Contracts Editorial Staff

A protest of the terms of a request for proposals for combat gloves was sustained because the RFP improperly required the use of domestic leather. The RFP required the leather used in the gloves to be goat/kidskin. As originally issued, the RFP only required the tanning and processing of the leather to be done domestically, but after conducting market research, the government issued an RFP amendment stating “[a]ll Goat/Kidskin ‘MUST’ be 100% Domestic ….” DFARS 225.7002-1 implements the Berry Amendment restrictions (10 USC 2533a) prohibiting the use of appropriated funds for items, including clothing and handwear items, that are not “grown, reprocessed, reused, or produced in the United States,” and the RFP incorporated this restriction with the DFARS 252.225-7012 clause. However, an exception in DFARS 252.225-7012(c)(1) states the applicable restriction does not apply to items listed in FAR 25.104(a), which sets forth various “[n]onavailable articles,” including “[g]oat and kidskins.” According to the protester, since goat and kidskins fall within an express exception to the Berry Amendment requirements, the government’s imposition of a domestic source restriction was unreasonable and contrary to regulation. The government maintained FAR 25.103(b)(1) requires it to conduct market research before applying the nonavailability exception.

Unsupported Interpretation. The Comptroller General rejected the government’s interpretation, finding the government lacked authority to use the FAR Part 25 Buy American Act market research provisions to evade the Berry Amendment’s “nonavailable articles” exception. DFARS 225.7002-2 and DFARS 252.225-7012(c) clearly state that DFARS 225.7002-1(c)’s restrictions do not apply to acquisitions of items listed in FAR 25.104(a), and these DFARS sections contain no limiting language or carve outs. Further, these regulations do not reference the market research contemplated throughout FAR 25.103. Thus, under the plain language of these DFARS sections, there was no support for the government’s contention that the applicable Berry Amendment exception is itself subject to an exception when the government determines, via market research, that the applicable item is sufficiently available for purposes of the specific acquisition at issue. Similarly, nothing in FAR 25.103 indicates that it applies to Berry Amendment restrictions, and the provision addresses Buy American Act exceptions. Since the RFP’s domestic restriction was not required by regulation and the government did not assert the restriction was reasonable, the government failed to meet its responsibility of showing the restriction was reasonably necessary to meet its needs. The Comptroller General recommended the government provide, consistent with the applicable regulations, reasonable support for the RFP’s restriction, or amend the restriction. (Mechanix Wear, Inc., 33 CGEN ¶116,190).

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