Protest of HHS Contract Award

B-204737: Sep 29, 1981

Additional Materials:

Contact:

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

A firm protested the award of a contract by the Department of Health and Human Services (HHS) under an invitation for bids (IFB) for the renovation of a heating system at a school in Alaska and claimed bid preparation costs. As the second low bidder, the protester contended that it was entitled to the contract award because the awardee's bid was nonresponsive for failing to include a bid guarantee for the amount required by the IFB. The record showed that the awardee's bid guarantee was submitted in the form of a bid bond in the amount of 5 percent of its bid. Although the protester's bid bond did not comply with the requirement of the IFB for a 20 percent bid bond, HHS waived the deficiency in accordance with Federal Procurement Regulations which provide that, where the amount of a bid guarantee is equal to or greater than the difference between the price stated in the bid and the bid price stated in the next acceptable bid, the deficiency may be waived. GAO held that, since the awardee's bid bond was greater than the difference between the awardee's bid and the protester's bid, the deficiency was properly waived. Additionally, GAO held that the protester's claim for anticipated overhead and profit plus all expenses incurred in this matter is denied since there is no legal basis for allowing an unsuccessful bidder to recover anticipated profits. Accordingly, the protest was denied, and the protester's bid preparation costs were not allowed.