[Request for Reconsideration of Decision Concerning Army Rejection of Bid as Materially Unbalanced]

A firm requested reconsideration of the denial of its protest against the Army's rejection of its bid under a solicitation for magnetic compasses. GAO had held that the Army properly rejected the protester's low bid as unbalanced because its first article production and testing costs were unreasonably high. In its request for reconsideration, the protester contended that: (1) GAO erred in concluding that it failed to amortize its tooling and special equipment costs over the life of the contract; (2) it had no notice of the applicability of the rule prohibiting unbalanced bids; and (3) all other bids, including the awardee's, should also be rejected as unbalanced. GAO held that: (1) it properly concluded that the protester's proposed first article costs were disproportionately high; (2) it had previously considered and rejected the protester's contention that it had no notice of the rule against unbalanced bids; and (3) while the awardee's proposed first article costs were also disproportionately high, it would not actually incur any such costs because it was the incumbent contractor and the Army could legally waive first article testing. Accordingly, the original decision was affirmed.