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the agency's actual requirements. We therefore sustain the protest.4 See Chromatics, Inc., supra. As to PRMMI's objection to the RFP's stated preference for diesel vessels over steam, we find that the preference is reasonably related to the agency's needs, and therefore does not unduly restrict competition. In this regard, the agency has explained that steam vessels are no longer being built and the number of operating steam ships therefore has declined over the years. As a consequence of the industry shift to diesel power, the number of shipboard personnel qualified to operate steam vessels has also declined. While PRMMI has established that there currently are many steam vessels that still perform very well, and plenty of steam-qualified personnel available to run them, we think MarAd is justified in its concern about the age and declining number of steam vessels, and a possible future personnel shortage. We therefore find no basis to object to the preference provision (which, the protester acknowledges, comprises only a maximum of 7 percent of the available technical evaluation points). See Blaesbjerg Marine (Texas), Inc., and Alabama Shipyard, Inc., B-247975.2, Aug. 11, 1992, 92-2 CPD 1 95; CardioMetrix, B-234620, May 1, 1989, 89–1 CPD 1 415.

Buy American Act

The Buy American Act generally requires that agencies purchase only domestic end products for use within the United States, 41 U.S.C. § 10a. One exception is where the agency head determines the cost of domestic end products to be unreasonable. 41 U.S.C. § 10d. Under the FAR, price reasonableness of domestic end products is determined by adding an evaluation differential to offers of foreign products. FAR $ 25.105. PRMMI alleges that the agency failed to either provide for a Buy American Act evaluation preference for domestic offers as required by FAR $ 25.105, or execute a determination under FAR 8 25.102(b)(2) not to apply the Act to this acquisition. MarAd explains that it was not required to evaluate offers in accordance with Buy American Act requirements because the Trade Agreements Act of 1979 (TAA), 19 U.S.C. $8 2503 et seq. (1988), exempts this procurement from the Buy American Act. The TAA, in pertinent part, approves the Agreement on Government Procurement, H.R. Doc. No. 96–153, Part I (1979), part of the General Agreement on Tariffs and Trade, April 12, 1979. In general, and subject to certain exceptions, the Agreement provides for equality of treatment of foreign and domestic products in federal procurements. To this end, the TAA authorizes the President to waive discriminatory purchasing requirements (such as the Buy American Act) for "eligible products" from certain foreign countries. Executive Order No. 12260 delegates to the U.S. Trade Representative the authority both to interpret the Agreement on Government Procurement and to waive purchasing restrictions; the Trade Representative has waived the restrictions. 46 Fed. Reg. 1657 (1981). Currently, products valued at more than $176,000 are "eligible products" exempt from application of the Buy American Act. 56 Fed. Reg. 66117 (1991). As MarAd points out, the RRF vessels to be acquired here exceed the $176,000 threshold, and therefore are “eligible products” under the TAA. FAR § 25.403(d)(2), however, exempts from TAA coverage purchases by civilian agencies "indispensable for national security or for national defense purposes, subject to policies established by the U.S. Trade Representative."5 MarAd asserts that, even though the RRF vessels might well qualify for the exemption from TAA coverage as indispensable to the national defense, the exemption is "subject to policies established by the U.S. Trade Representative”; MarAd maintains that it therefore must submit a request to the Representative before applying the FAR exemption. MarAd maintains that the exemption for national defense purchases does not apply to this procurement because the agency did not submit a request for the exemption. The authority to exempt purchases indispensable to the national defense from TAA coverage comes from Article VIII:1 of the Agreement on Government Procurement, which provides: Nothing in this agreement shall be construed to prevent any Party (i.e., signatory country) from taking any action . . . which it considers necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defense purposes. FAR $ 25.403(d)(2) implements this article for civilian agencies by exempting all procurements that are indispensable to national defense or national security, "subject to policies established by the U.S. Trade Representative.” The U.S. Trade Representative has not issued policies in this regard or provided specific guidance in this case. 6 In the absence of some policy established by the U.S. Trade Representative, we are left with an interpretation of the plain language of FAR $ 25.403(d)(2), which provides that purchases indispensable to the national defense are exempt from TAA provisions. MarAd's interpretation of the exemption—that it does not apply if the agency does not submit a request to the Trade Representative—is unsupported in the language of the provision itself. The record here leads to a conclusion that the ships to be acquired for the RRF are indispensable to the national defense. The procurement clearly is defenserelated; as noted above, the mobility requirements study found that immediate buildup of the Force is necessary in order to maintain adequate U.S. sealift capacity. MarAd itself states that the exemption, but for Trade Representative agreement, "would seem to apply.” We also note that the Department of Defense (DOD) considers all ships to be war material and excludes ship purchases from Trade Agreements Act coverage. See DOD FAR Supplement (DFARS) $ 225.403-70. See also Hung Myung (USA) Ltd., Inc.; Containertechnik Hamburg GmbH & Co., 71 Comp. Gen. 64 (1991), 91-2 CPD 434 (items that are listed in DFARS $ 225.403-70 are not "war materials”). On this record, and in the absence of any policy or specific guidance in this case from the U.S. Trade Representative, we conclude that what is being purchased here is indispensable to the national defense under FAR $ 25.403(d)(2). That being so, this procurement is not exempt from the restrictions of the Buy American Act.

4 Given the agency's actual requirement for only one side ramp, and the protester's assertion that it could have met the requirement at the time of proposal submission, PRMMI's allegation that the RFP should have allowed offerors until the delivery date to complete modifications to their ships is academic.

5 Department of Defense procurements have a separate exemption in FAR $ 25.403(d)(1). 6 Although MarAd states that Trade Representative policy requires an agreement between MarAd and the Trade Representative that the exemption applies, the record does not reflect such a policy.

Conclusion

We sustain the protest. By letter of today to the Secretary of Transportation, we are recommending that MarAd amend the RFP to reflect its actual need for only one side ramp. MarAd should also amend the solicitation to reflect the applicability of the Buy American Act (see FAR $ 25.109), unless it obtains a determination of the U.S. Trade Representative that the procurement is subject to the TAA or obtains a waiver of the Buy American Act as provided in FAR § 25.102(a)(3). MarAd should then accept revised proposals from all offerors (except those that have been eliminated from the competition for failure to meet other requirements).? We also find PRMMI entitled to the costs of filing and pursuing its protest, including attorneys' fees. 4 C.F.R. $ 21.6(d). The protest is sustained.

7 The record shows that at least two other ships were rejected because they did not have "the required ramps."

November 1992

B-247708, November 3, 1992
Appropriations/Financial Management
Accountable Officers
I Relief
IPhysical losses
When employing agency does not make required findings under 31 U.S.C. $ 3527(a), matter of relief
for accountable officer for an unexplained loss of $527.60 is not properly before GAO and, regardless
of merits, we have no authority to grant or deny relief.

Appropriations/Financial Management
Accountable Officers

Determination criteria Person who is not formally designated as an accountable officer becomes an accountable officer when the person takes custody of funds.

Appropriations/Financial Management
Accountable Officers

Determination criteria Person who serves as Budget and Fiscal Officer, or Financial Management Officer, and supervises cashiers and other custodians of funds, is not an accountable officer solely by virtue of her responsibility as supervisor.

Matter of: Chairman, Committee of Inquiry Into Fiscal Irregularities, United States Department of State

This responds to your request of February 10, 1992, for our opinion on whether Ms. Dora J. Hanna was an accountable officer with respect to an unexplained loss of $527.60 at the American Embassy, DAR es Salaam, Tanzania, and whether there is a basis for relieving her from liability for that loss. For the reasons discussed below, we conclude that Ms. Hanna was an accountable officer during part, but probably not for all, of the period when the loss occurred. Further, because you have not been able to determine the exact cause or timing of the loss, there may not be a basis for holding her liable, either jointly or solely, for all, if any, of the loss. Also, questions of liability still remain for other persons who were accountable officers at the Embassy during part of the period when the loss occurred.

Page 49

Background

Based on your submission, which includes a report by Ms. Hanna on the cashier shortage relating to the loss, the facts of this case are as follows. Ms. Hanna was the Budget and Fiscal Officer at the American Embassy, DAR es Salaam, Tanzania, and therefore responsible for its cashier operation. In anticipation of the main cashier, Ms. Sita George, going on vacation in December 1989, Ms. Hanna decided it would not be in the Embassy's best interest for the previous alternate cashier to again serve as cashier and, instead, arranged for Ms. Joyce Mwombela to receive training and act as cashier during Ms. George's vacation. Ms. Hanna's report reflects her and Ms. George's concern during Ms. Mwombela's training over her ability to handle the cashier job alone. Ms. Hanna reports that Ms. Mwombela was nervous on her first day (December 11) as cashier. Nevertheless, Ms. Mwombela stated she had balanced at the end of the day, although there is no evidence that Ms. Hanna verified Ms. Mwombela's statement. Ms. Mwombela also told Ms. Hanna early on December 12 that she was scared of making mistakes. During the afternoon of December 12, Ms. Mwombela reported to Ms. Hanna that her cash was out of balance. A cash count that Ms. Hanna characterizes as a reconciliation to the daily cash log, but not a verification that the log is correct, revealed a shortage of about 39,000 Tanzanian shillings. They ended the day without verifying the amount of the shortage or the reason for it. After doing a “complete reconciliation” on December 13 that did not include breaking down bundles of bills or counting coins in bags, the amount of the shortage increased to over 59,000 Tanzanian shillings. Later that day, Ms. Hanna, Ms. Mwombela, and Mr. Tom Warren (an American officer appointed to assist in the cash count) began a cash count that included breaking down the bundles of bills. Because Thursday, December 14, was payday, Ms. Hanna decided to continue cashier operations even though they had not completed the cash count and reconciliation. Ms. Hanna allowed Ms. Mwombela to continue as cashier but to conduct transactions only in Ms. Hanna's presence. To assist in paying the payroll, Ms. Hanna allowed an employee who was not a certified cashier to pack pay envelopes. Ms. Hanna admits that some mistakes were made and there is no assurance that payees were not overpaid. Another employee served as temporary cashier on Thursday afternoon and Friday. In addition, another American officer, Cathy Starnes, was asked to work with Ms. Hanna on a new reconciliation. This count was done manually and revealed errors in the previous machine counted bundles. This reconciliation was not completed until Monday, December 18, almost 1 week after the first discrepancy was discovered. Further, while the reconciliation revealed the money on hand, neither Ms. Hanna nor her colleagues could determine the

1 Ms. Hanna also is described as a Financial Management Officer (FMO) in some of the materials provided us. An FMO has various cash management responsibilities. E.g., 4 Foreign Affairs Manual 391.4i.

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