The judge ruled that while it was true that the purchase did not meet the "Buy America Act", the Coast Guard could still make the purchase.
Not exactly true, but true up to a point.
The aircraft were equipped with Lycoming LTS101-750B-2 engines (built in PA) and Rockwell Collins avionics (built in KS) and the aircraft were assembled in Grand Prairie, TX. That pushed the cost basis beyond 51% American, and so made the purchase legal. Similar attempts of late with the VXX program and the KC-X program have not met with success.
The LTS101s were a disaster, while the avionics were pretty good. The airframes have since been refit with Turbomeca engines, so now they are much more French and closer to the original design than they started out, but still don't much resemble any civil Dauphin.
Bell's position wasn't much stronger going in, as much of their manufacturing base was in Canada, though they were headquartered in the U.S. The 222 (Bell's offering) would have been a poor alternative, operating from Coast Guard cutters. Very underpowered at the time of the RFP, and that teetering head is not what the doctor ordered operating from tiny ships.