Claim for Proposal Preparation Costs

A firm submitted a claim for costs incurred in 1977 in connection with its efforts to obtain a contract from the Department of Health, Education, and Welfare (HEW) to provide editing and other services in support of a report to Congress. The claim was based on the claimant's alternative theories that it was entitled to proposal preparation costs or it should have received compensation for extra services it was induced to perform under a purchase order with HEW. The claimant contended that it was induced to accept a small purchase order for preliminary work on the report because it was led to believe it would receive a larger follow-on contract on a sole-source basis. The claimant further contended that when negotiations between it and HEW collapsed, HEW, acting in bad faith, contracted to have performed elsewhere work which was based on the claimant's contributions without giving it an opportunity to compete. GAO will not consider claims when the claimant did not file or otherwise pursue a timely protest because consideration of such claims would undermine the timeliness provisions of GAO Bid Protest Procedures. Since the claim for proposal preparation costs was filed more than 2 years after adverse agency action, consideration on its merits was not deemed appropriate. As to the claim for payment above the amount of the purchase order for the initial services performed in the procurement, there was no legal basis upon which the claimant could be paid more than the amount for which it contracted to perform the services, even if it contributed more to the project than it would have had it not assumed that the contract would be awarded on a sole-source basis. Moreover, the record indicated that, although HEW personnel may have initially intended to use the claimant's services on a sole-source basis, the contracting officer subsequently determined competition was available. Under such circumstances, no authority existed for a sole-source award. Accordingly, the claim for proposal preparation costs was dismissed and the claim based on extra value of service was denied.