Protest of Cancellation of IFB

A firm protested the cancellation of an invitation for bids (IFB) and the contracting officer's intention to submit two IFB's to minority firms under the Small Business Administration's (SBA) 8(a) program. The Army issued two invitations for bids for the construction of two access areas at a lake. When bids covering two phases of the project were opened, the lowest bid was 46.4 percent higher than the Government's estimate. All bids were rejected as unreasonable and the IFB was canceled. The protester maintained that the Government's estimate was too low. As a result of this protest, the Army reviewed its estimate and made certain revisions which added $16,200 to the Government's estimate. Notwithstanding these revisions, the protester's bid price was still more than 30 percent over the Government's estimate. The Army contended that all bid prices were unreasonable and were properly rejected. The Army stated that GAO decisions support the contracting officer's right to reject unreasonable bids. It also stated that by splitting the work into two contracts for the two areas to be constructed would be appropriate for the SBA 8(a) program pursuant to the Army's Interagency Agreement with SBA to submit projects to minority contractors. Regulations provide that after bids have been opened award must be made to the lowest responsible bidder unless there is a compelling reason to reject all bids and readvertise. The invitation may also be canceled after opening if the prices on all otherwise acceptable bids are unreasonable. GAO will sustain a determination as to unreasonableness of price barring bad faith or fraud. In this case, there was only the unsupported statement of the protester that the Government's estimate was too low. With only this information, GAO was unable to conclude that the rejection of all bids due to unreasonable prices was improper. GAO will not review decisions to set aside procurements under the 8(a) program absent a showing of fraud or bad faith. The record showed no evidence of either. Accordingly, the protest was denied.