[Request for Reimbursement for Proposal Preparation Costs]

A firm requested reimbursement for the expenses it incurred in preparing a proposal for the United States Information Agency (USIA), contending that: (1) USIA encouraged it to submit a proposal and then failed to consider the proposal; and (2) USIA misappropriated information contained in its proposal by improperly using the information in a subsequent request for proposals from which it was excluded from competition. GAO noted that: (1) USIA requested information and cost estimates in order to decide how to best proceed with its project; (2) USIA issued a solicitation which was limited solely to European governmental telecommunication agencies (PTT); and (3) the solicitation emphasized the lowest cost for a system and an advance operational demonstration. The claimant argued that it was entitled to preparation costs because: (1) its proposal was submitted as a reasonable response to the encouragement of USIA officials; and (2) extensive discussions as well as demonstrations of its proposed system were consistent with a negotiation process rather than the gathering of information to be used in a subsequent acquisition. USIA argued that: (1) there was no implied duty to fairly consider the claimant's proposal because no solicitation was ever issued; (2) the claimant misinterpreted the discussions which were traditional and necessary processes of market analysis for acquisition planning; (3) limiting the competition to PTT best satisfied its minimum needs; and (4) the claimant failed to adequately mark or identify information sought to be protected from disclosure. GAO found that: (1) USIA advised the claimant that its quotation was considerably higher than various other proposals received; (2) the claimant was excluded from the competition because it was not a PTT; (3) where no solicitation is issued, there can be no breach of implied duty to fairly review any proposal; (4) an agency may legitimately conduct preprocurement tests and discussions in formulating its minimum needs; and (5) the protester had not met its burden of proving that the material submitted was marked proprietary, involved significant time and expense, and contained data or concepts that were not common knowledge. Accordingly, the claim was denied.