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Dispute Concerning Contract Termination for Default

B-198295 Aug 13, 1980
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Highlights

A company protested the award of a contract issued by the Veterans Administration (VA). The protester contended that: (1) the improper default of its contract should be rescinded and the contract should have been reinstated at an increased price; (2) this was not a proper reprocurement of the defaulted contract as the clarification drawing increased the amount of work to be performed by 50 to 75 percent; and (3) the contract should be awarded to the protester or it should receive bid preparation costs. The solicitation was a reprocurement for projects that were awarded to the protester. The contract was terminated for default. On resolicitation, the protester submitted its bids and the contracting officer determined that the protester's low bid was nonresponsive because it was based on the wrong number of drawings. GAO held that: (1) the propriety of a termination for default is a matter for resolution by the contracting parties and not for consideration by GAO; (2) the reprocurement contract may not be awarded to a defaulted contractor at a price greater than the terminated contract price because this would be tantamount to modification of the existing contract without consideration; and (3) the protester was not entitled to bid preparation costs since the rejection of its bid was not arbitrary or capricious. Accordingly, the protest and claim were denied.

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