B-193296, DECEMBER 6, 1978
Highlights
ACCEPTANCE OF BELOW-COST BID IS NOT LEGALLY OBJECTIONABLE. 2. PROTEST OF AFFIRMATIVE DETERMINATION OF LOW BIDDER'S RESPONSIBILITY IS NOT REVIEWED BY GAO ABSENT ALLEGATIONS OF FRAUD OR MISAPPLICATION OF DEFINITIVE RESPONSIBILITY CRITERIA. NEITHER OF WHICH ARE PRESENT HERE. THE ACCEPTANCE OF A BELOW-COST BID IS NOT LEGALLY OBJECTIONABLE. THE CONTRACTING OFFICER MUST DETERMINE THAT THE BIDDER IS RESPONSIBLE. THE PROTEST IS IN EFFECT AN OBJECTION TO AN AFFIRMATIVE DETERMINATION OF ABL'S RESPONSIBILITY. THIS OFFICE DOES NOT REVIEW PROTESTS WHICH QUESTION SUCH DETERMINATIONS OF RESPONSIBILITY UNLESS EITHER FRAUD ON THE PART OF THE PROCURING OFFICIAL IS ALLEGED. OR THE SOLICITATION CONTAINS DEFINITE RESPONSIBILITY CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN APPLIED.
B-193296, DECEMBER 6, 1978
DIGEST: 1. ACCEPTANCE OF BELOW-COST BID IS NOT LEGALLY OBJECTIONABLE. 2. PROTEST OF AFFIRMATIVE DETERMINATION OF LOW BIDDER'S RESPONSIBILITY IS NOT REVIEWED BY GAO ABSENT ALLEGATIONS OF FRAUD OR MISAPPLICATION OF DEFINITIVE RESPONSIBILITY CRITERIA, NEITHER OF WHICH ARE PRESENT HERE.
RADIONICS, INC.:
RADIONICS, INC. (RADIONICS) PROTESTS AWARD TO ABL GENERAL SYSTEMS CORPORATION (ABL), THE APPARENT LOW BIDDER, UNDER INVITATION FOR BIDS (IFB) NO. DAABO7-78-B-1193, ISSUED BY THE UNITED STATES ARMY, FORT MONMOUTH, N.J. RADIONICS CONTENDS THAT ABL SHOULD BE REGARDED AS A NONRESPONSIBLE BIDDER BECAUSE IT SUBMITTED AN UNREASONABLY LOW PRICE.
THE ACCEPTANCE OF A BELOW-COST BID IS NOT LEGALLY OBJECTIONABLE. SEE IMBA, INCORPORATED, B-188364, B-187404, NOVEMBER 9, 1977, 77-2 CPD 356; FUTURONICS INDUSTRIES, INC., B-185896, MARCH 10, 1976, 76-1 CPD 169. HOWEVER, BEFORE A BID MAY BE ACCEPTED, THE CONTRACTING OFFICER MUST DETERMINE THAT THE BIDDER IS RESPONSIBLE. SEE DEFENSE ACQUISITION REGULATION (DAR) SEC. 1-904.1. THE PROTEST IS IN EFFECT AN OBJECTION TO AN AFFIRMATIVE DETERMINATION OF ABL'S RESPONSIBILITY. THIS OFFICE DOES NOT REVIEW PROTESTS WHICH QUESTION SUCH DETERMINATIONS OF RESPONSIBILITY UNLESS EITHER FRAUD ON THE PART OF THE PROCURING OFFICIAL IS ALLEGED, OR THE SOLICITATION CONTAINS DEFINITE RESPONSIBILITY CRITERIA WHICH ALLEGEDLY HAVE NOT BEEN APPLIED. SEE CENTRAL METAL PRODUCTS, INC., 54 COMP.GEN. 66 (1974), 74-2 CPD 64 AND DATA TEST CORPORATION, 54 COMP.GEN. 499 (1974), 74-2 CPD 365, AFFIRMED 54 COMP.GEN. 715 (1975), 75-1 CPD 138. NEITHER EXCEPTION IS APPLICABLE HERE.
WE POINT OUT THAT, ALTHOUGH A CONTRACTING OFFICER MAY ACCEPT AN UNUSUALLY LOW BID, THE PRACTICE OF "BUYING IN," THAT IS, SUBMITTING A BELOW COST BID WITH EXPECTATION OF RECOUPING POTENTIAL LOSSES THROUGH FOLLOW-ON PROCUREMENTS, IS DISCOURAGED BY DAR SEC. 1-311. PURSUANT TO THAT REGULATORY PROVISION, CONTRACTING OFFICERS ARE REQUIRED TO MONITOR THE SITUATION CLOSELY SO THAT THE AMOUNTS "EXCLUDED IN THE DEVELOPMENT OF THE ORIGINAL CONTRACT PRICE ARE NOT RECOVERED IN THE PRICING OF CHANGE ORDERS OR (THROUGH) FOLLOW-ON PROCUREMENTS SUBJECT TO COST ANALYSIS."
THE PROTEST IS DISMISSED.