Allis-Chalmers Corp. v. Friedkin

ADAMS, Circuit Judge,

concurring.

While I concur in the result reached by the majority, I write to emphasize that our decision today is virtually ordained by the principle that the judiciary is required to accord substantial deference to the opinion of the administrative body charged with interpreting and applying a set of statutory and regulatory requirements. See United States v. National Association of Securities Dealers, 422 U.S. 694, 718-19, 95 S.Ct. 2427, 2442, 45 L.Ed.2d 486 (1975); Investment Co. Institute v. Camp, 401 U.S. 617, 626-27, 91 S.Ct. 1091, 1097, 28 L.Ed.2d 367 (1971). At least as early as 1973, the Comptroller General concluded that when the Government seeks to procure items that will not be assembled until after delivery at the job-site, that portion of the bid of a foreign corporation attributable to on-site assembly and installation costs is not subject to the differential provided by the Buy America Act. Westinghouse Electric Corp., 53 Comp.Gen. 259 (1973). The Comptroller General has not retreated from this interpretation of the statute, as illustrated by his application of the principles of Westing*258house Electric to the present case. See In re Allis-Chalmers, B-195311 (Dec. 17,1979).

Were it not for this line of precedent from the Comptroller General, I would have considerable difficulty holding that the contract in the present case was properly awarded to Hitachi. The legislative history of the Buy American Act suggests that at least some of its supporters intended to include within the sweep of the Act products whose parts were manufactured abroad and then assembled in the United States. When the Act was debated on the floor of the Senate, an amendment was proposed that would have exempted from the Act’s coverage “articles of the growth, production, and/or manufacture of the United States.” Senator Johnson, the sponsor of the Act, objected to the proffered amendment on the following grounds:

From my standpoint, the vice of this amendment is that from outside, from a foreign country, could be brought into this country the material which could be manufactured as seen fit, and then it would not be within the prohibition of the law.
For instance, as I have repeatedly stated upon the floor, the impelling cause of this measure was the situation at the Boulder Dam, where it was expected that the lowest bid would be from Germany for the turbines or generating machinery and the like-a transaction involving about $6,000,000. Now, assume that they brought over from Germany part of the machinery, and assume that they brought over then in another ship another part of it, and in another ship another part of it, and then, in some factory in this country, it was assembled and manufactured. Then, there would be no prohibition upon it such as I desire to put in this bill upon bids of that sort.

76 Cong.Rec. 3267 (Feb. 3, 1933). It is troubling, to say the least, that the situation sought to be protected against by the sponsor of the Buy American Act-the production abroad of parts for hydro-turbines which would later be assembled in the United States-is now asserted to be outside the ambit of the Act’s provisions.

As the majority points out, the legislative history also reflects a concern for the protection of American workers. I am not so confident as the majority, however, that the award of the contract to Hitachi will have no effect on American labor. There is no indication in the record that American engineers and technicians will be employed for the installation of the hydroturbines in the same numbers in which they would have been employed had the contract been awarded to Allis-Chalmers. To the extent that they are replaced with foreign technical experts, American labor will have been displaced.

The Comptroller General’s interpretation of the Act and the attendant award of the contract to Hitachi are not, in this case, so “clearly illegal’’-the standard set forth in Sea-Land Service, Inc. v. Brown, 600 F.2d 429, 435 (3d Cir. 1979)-that they should be overturned by this Court. But I have serious doubts whether the interpretation of the Comptroller General is the one that comports best with the underlying purposes of the Buy American Act.