Claim for Bid Preparation Costs

A joint venture claimed bid preparation costs in the amount of $7,000 because the Government estimate of the work to be performed under the solicitation was faulty and resulted in its cancellation. The solicitation was issued in 1978 for flood rehabilitation work to be performed in three areas of a Wenatchee National Forest, Washington. The Government estimate for the solicited work was $152,843. The only bid received was from the protesters, at $970,203.65 for the three areas, subject to acceptance of only two areas, not to exceed an award of $610,000. Since the bid was considerably above the Government estimate for the work, both the agency and the protesters reexamined the estimate and bid. The Forest Service conducted a time study of trenching, since a large part of the rehabilitation work consisted of digging trenches by hand, and recalculated the Government estimate at $268,335. The protesters' recalculated price was lowered to $913,206. Since the parties were still far apart, the Government cancelled the solicitation and performed the rehabilitation work itself. Although the protesters claimed that the Forest Service's initial cost estimate was grossly wrong, the Forest Service completed the project at a cost of $157,297. The agency admitted, however, that its project was reduced in scope from that contemplated by the solicitation, but argued that its cost when adjusted to the scope contemplated would be considerably less that the protesters' second bid. The protesters contended that the Forest Service used their know-how and estimating techniques not only to develop a second estimate but also to perform the work itself. GAO felt that the agency made a reasonable effort to correct its first estimate. Since both parties agreed it was difficult to estimate accurately the cost of performing the project, it did not appear that the agency acted unreasonably. GAO held that the agency's determination to cancel the solicitation had a reasonable basis, and any information which the Government received from conversations with the protesters was not restricted or proprietary. The claim for bid preparation costs was denied.