Protest Against Fixed-Price Contract

B-195320: Feb 8, 1980

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

A firm protested the Navy's conduct of a procurement which resulted in the award of a fixed price contract for training courses to another firm. No noncost discussions were conducted with prospective competing offerors. The protester alleged that discussions of areas judged relatively weak in its noncost proposal would have been appropriate since most of the difference between the protester's score and that of the awardee related to lack of documentation or explanation of how and with what personnel the protester intended to conduct the course. The Navy stated that it was familiar with the strengths and weaknesses of the competing offerors' proposals and, therefore, its decision not to conduct discussions was justified and in accord with Navy Procurement Directives. According to the Navy, such discussions would have been inappropriate since there was no indication that discussion would have served any purpose other than to transfer better ideas from the awardee to the protester and would have resulted in a leveling of noncost proposals in violation of the Directive. GAO determined that no transfer of technical ideas and leveling would have resulted from posing clarification questions to the protester. Furthermore, since discussions were limited to price, the awardee had an opportunity to lower its price while the protester was not given an opportunity to improve its lower scored, lower priced proposal. GAO therefore concluded that the mandate for meaningful discussions was not met in the performance of the procurement. Accordingly, the protest was sustained. Since performance under the contract was already well underway, it was recommended that the Navy consider the feasibility of not exercising the option for future years' services and issuing a new competitive procurement for its future needs.