[Protests of DLA Inclusion of Ineligible Bidders in LSA Procurement]

Two firms protested the Defense Logistics Agency's (DLA) resolicitation of a partial small business/labor surplus area set-aside after they had been determined to be the two low responsive bidders. A third firm had originally joined in these protests; however, it subsequently indicated agreement with the DLA position, in effect withdrawing its protest. DLA determined after resolicitation that two previously unacceptable firms were the low bidders and it made award to them. The protesters argued that: (1) DLA improperly received bids from two firms which it had excluded from the initial solicitation because they were debarred contractors; (2) one of the firms submitted an ambiguous and unacceptable bid; (3) the resolicitation was disruptive of the procurement; and (4) DLA acknowledged by telephone to one of the protesters that the agreement resulting from the initial procurement was binding regardless of the outcome of the resolicitation. DLA stated that its exclusion of the two eventual awardees from the initial solicitation because of their eligibility status amounted to a premature determination of nonresponsibility. GAO noted that the firms had regained their eligibility before contract award had been made. Since a firm's responsibility may only be determined at the time of award, the firms were eligible and the DLA action was proper. GAO also held that: (1) the protest alleging that DLA accepted an ambiguous offer was based on self-serving and questionable assumptions; (2) resolicitation was a reasonable remedy to achieve fairness to all bidders; and (3) it was unreasonable to assume that a binding agreement arose from a telephone conversation with DLA. Accordingly, the protests were denied.