[Request for Reimbursement for Proposal Preparation Expenses]

A firm requested reimbursement for its proposal preparation costs under a Navy request for quotations (RFQ) which was cancelled and which it protested after a subsequent sole-source award of the requirement. In a prior decision, GAO rejected the protest that the Navy's actions were unreasonable. In its request, the firm contended that the Navy was aware, prior to issuing the RFQ, that a sole-source award would be made and that it should be reimbursed the needless cost of preparing its quotation and the legal fees it incurred in pursuing its protest. A prerequisite to entitlement to proposal preparation costs based on an allegation that the agency solicited proposals with knowledge that the proposals could not be considered is a showing that the government acted in bad faith. In this case, GAO found that the Navy's determination to cancel the RFQ and award the contract were reasonable and it found no evidence that the Navy acted in bad faith. Further, Navy carelessness in allowing the solicitation to be issued or in not cancelling the RFQ at an earlier date does not entitle the protester to bid preparation costs. Bid protest regulations limit the recovery of legal costs to situations where the protester is unreasonably excluded from the procurement. In this case, since the protester was not improperly excluded from the competition, GAO found no basis to allow the recovery of such costs. Accordingly, the protester's requests were denied.