Protest Concerning Award of HEW Contract to Competitor

A contractor protested the award of a cost plus fixed-fee contract for setting up and holding health related conferences to the second low bidder. By request, a review of the award showed the competitor to be lacking in key eligibility criteria and that no significant judgment was given to the two best and final offers as required by regulations. GAO found that the Department of Health, Education, and Welfare (HEW) had erred in its cost evaluation of the project. The contract winner had clearly miscalculated the travel costs involved in sending representatives to the conferences. HEW response stated that the protester's arguments were untimely since the subject was not brought up during the contract negotiations. GAO decided that the protest has merits in that errors in judgment and research were made by HEW in awarding the contract and that the two proposals should be reviewed to be certain that the award was made in the best interests of the government. If the review fails to justify the awards merits, the second phase of the contract should not be exercised with the present contract winner.