[Protest of Navy IFB Requirement]

A firm protested a requirement for performance and payment bonds in an invitation for bids (IFB) issued by the Navy for the operation and maintenance of vehicles and equipment. The protester contended that the bond requirement was being used as a substitute for a determination of contractor responsibility in violation of a Defense Acquisition Regulation (DAR). The protester also argued that the bond requirements resulted in an unnecessary expense to the Government because other provisions in the IFB provided sufficient protection for the Government. The Navy stated that the bond requirement was necessary to protect the Government's interest in a large quantity of costly Government-owned equipment which would be supplied to the contractor. DAR's provide that, if a performance bond is required, a payment bond should also be required if it can be obtained at no additional cost. GAO stated that contracting officers have the discretion to determine whether a need exists for performance and payment bonds in a particular procurement. GAO will not disturb an agency's determination to require bonds if it is reasonable and made in good faith. GAO found that the protester failed to demonstrate that the decision was either unreasonable or made in bad faith, and GAO found that the contracting officer had a reasonable basis for deciding to impose a performance bond requirement. GAO disagreed with the protester that other IFB requirements provided sufficient protection to the Government's interest so as to make the bond requirement unnecessary. Because GAO would not question the requirement of a performance bond, it would not question the requirement of a payment bond. Accordingly, the protest was denied.