Float Like a Butterfly (Valve), Sting Like a B(AA Requirement): GAO Issues Rare Decision Sustaining Challenge to Agency’s Application of the Buy American Act

In a polarized political environment, one area of bipartisan agreement in recent years has been renewed interest in leveraging government purchasing power to promote the domestic manufacturing base by expanding and strengthening federal “Buy America” requirements. For direct federal procurements subject to the Buy American Act (BAA), this has resulted in revised rules increasing the amount of U.S. content required to qualify a product as domestic, as well as heightened scrutiny of when waivers may be issued exempting a procurement in whole or in part from those requirements (covered here and here).

A recent GAO decision is illustrative of this trend. On August 1, in Unico Mechanical Corp., B-420355.6, B-420355.7, GAO sustained a protest challenging a U.S. Army Corps of Engineers (USACE) waiver of the BAA for the awardee. In Unico, USACE sought to award a construction contract for work at the Cougar Dam in Oregon and incorporated the requirements of the BAA requirements into the solicitation without exceptions. Based on its market research, USACE determined that there were sufficient domestic manufacturers of the required construction materials for the Cougar Dam, including certain butterfly valves, to allow offerors to comply with the BAA requirements. McMillen, LLC submitted a proposal using foreign-source butterfly valves and requested a BAA waiver, which USACE denied. Notwithstanding, USACE awarded McMillen the contract and exempted the butterfly valves from BAA compliance. An unsuccessful offeror, Unico Mechanical Corporation (“Unico”) protested, challenging USACE’s basis for granting the BAA waiver considering that Unico was a known domestic producer of the valves. Following corrective action, USACE doubled down on its waiver, explaining that Unico provided insufficient pricing information in its proposal to determine its domestic supplier capabilities and reaffirmed the award to McMillen. Unico protested once again and GAO sustained. GAO reasoned that USACE failed to explain its basis for changing from its original position that sufficient domestic suppliers could provide the valves. Furthermore, GAO rejected USACE’s claim that Unico did not provide necessary pricing information, noting that Unico was not required to include component pricing and that there was no evidence USACE had ever requested the pricing information it claimed was missing. Moreover, GAO emphasized, it was McMillen’s responsibility, as the requester seeking a waiver, to provide a reasonable market survey. Having failed to include Unico in its market survey, GAO found that McMillen did not meet its BAA obligations and therefore USACE’s waiver was unreasonable.

Adelicia Cliffe is a partner in the Washington, D.C. office, a member of the Steering Committee for the firm’s Government Contracts Group, and a member of the International Trade Group. Addie is also co-chair of the firm’s National Security practice. Addie has been…

Adelicia Cliffe is a partner in the Washington, D.C. office, a member of the Steering Committee for the firm’s Government Contracts Group, and a member of the International Trade Group. Addie is also co-chair of the firm’s National Security practice. Addie has been named as a nationally recognized practitioner in the government contracts field by Chambers USA.

Government contractors of all sizes — from Fortune 10 companies to small businesses — trust Cherie Owen to represent and advise them on a wide range of government contract matters, including bid protests at the Government Accountability Office, the Court of Federal Claims…

Government contractors of all sizes — from Fortune 10 companies to small businesses — trust Cherie Owen to represent and advise them on a wide range of government contract matters, including bid protests at the Government Accountability Office, the Court of Federal Claims, federal procuring agencies, and state courts. Cherie draws on the unique insights she gained as a senior bid protest hearing officer during her 12-year tenure at the GAO to identify the legal arguments and practical strategies most likely to result in strategic wins for her clients.

Clients rely on Cherie to provide counseling regarding contract formation and negotiation with respect to procurement contracts, grants, cooperative agreements, and Other Transaction Agreements. She also advises government contractors on business and compliance matters, including subcontractor agreements, suspension and debarment, and ethics and conflicts rules and mitigation strategies. In doing so, Cherie takes a pragmatic approach to addressing her clients’ legal and business concerns, leveraging her experience as both a GAO bid protest hearing officer and a judge on the GAO Contract Appeals Board. During her time at the GAO, she resolved over 600 protests, issued over 500 bid protest decisions, and conducted approximately 20 bid protest hearings. As one of only a few former GAO bid protest hearing officials in private practice, Cherie’s extensive familiarity with the inner workings of the GAO protest process distinguishes her from most other bid protest practitioners.

Cherie is a thought leader on topics relating to bid protests and agencies’ use of their Other Transaction Authority, holds several leadership roles in the ABA Public Contract Law Section, and maintains an active pro bono practice.

William B. O’Reilly is a counsel in Crowell & Moring’s Washington, D.C. office, where he is a member of the firm’s Government Contracts Group.

Liam assists clients with all phases of government contracting, including contract formation and award controversies, performance counseling, and claims…

William B. O’Reilly is a counsel in Crowell & Moring’s Washington, D.C. office, where he is a member of the firm’s Government Contracts Group.

Liam assists clients with all phases of government contracting, including contract formation and award controversies, performance counseling, and claims and disputes litigation. His practice includes representing clients in bid protests before the Government Accountability Office and U.S. Court of Federal Claims. Liam also regularly advises clients on supply chain risk management, addressing issues such as cybersecurity, country of origin and domestic preferences, and counterfeit part detection and avoidance, as well as conducting internal investigations and mandatory disclosures for performance breaches and potential violations of the False Claims Act (FCA).

Issac D. Schabes is an associate in the firm’s Washington, D.C. office, where he is a member of the Government Contracts Group.

Prior to joining the firm, Issac clerked for the Honorable Matthew H. Solomson on the U.S. Court of Federal Claims and…

Issac D. Schabes is an associate in the firm’s Washington, D.C. office, where he is a member of the Government Contracts Group.

Prior to joining the firm, Issac clerked for the Honorable Matthew H. Solomson on the U.S. Court of Federal Claims and the Honorable Robert N. McDonald on the Maryland Court of Appeals. Issac received his J.D., magna cum laude, from the University of Maryland Carey School of Law, where he graduated Order of the Coif and served as an executive editor for the Maryland Law Review. He received numerous awards, including the Judge Simon E. Sobeloff Prize for Excellence in Constitutional Law. During law school, Issac was a member of a low-income taxpayer clinic team that successfully appealed an IRS assessment resulting in a substantial tax liability reduction, and also interned for the Honorable Beryl A. Howell, Chief Judge, on the U.S. District Court for the District of Columbia and the Honorable Marvin J. Garbis on the U.S. District Court for the District of Maryland.