B-229619, Feb 1, 1988

B-229619: Feb 1, 1988

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Submission and acceptance of a below cost offer is not legally objectionable. 2. A contention that the offeror will be unable to do so at the offered price constitutes an allegation that the offeror is not responsible. A protester alleging that another offeror has an unfair competitive advantage must show that the advantage is the result of unfair action by the government. 4. Whether the contractor performs as contractually required is a matter of contract administration which is the responsibility of the procuring agency and is not subject to review by the General Accounting Office under its bid protest function. AJK argues that TPC's low prices of $1.99 and $2.08 per unit constitute an "irresponsible low ball" offer which should not have been accepted.

B-229619, Feb 1, 1988

MEADNOTES-UNAVAILABLE DIGEST: 1. Submission and acceptance of a below cost offer is not legally objectionable. 2. Where an offeror promises to comply with the requirements of a solicitation, a contention that the offeror will be unable to do so at the offered price constitutes an allegation that the offeror is not responsible; General Accounting Office generally does not review affirmative determinations of responsibility. 3. A protester alleging that another offeror has an unfair competitive advantage must show that the advantage is the result of unfair action by the government. 4. Once an offeror promises to perform in accordance with a solicitation's requirements, whether the contractor performs as contractually required is a matter of contract administration which is the responsibility of the procuring agency and is not subject to review by the General Accounting Office under its bid protest function.

AJK Molded Products, Inc.:

AJK Molded Products, Inc. (AJK), protests the award of a contract to Technical Plastics Corp. (TPC) under request for proposals (RFP) No. DAKFO4-87-R-0016, issued by the Department of the Army's National Training Center, Fort Irwin, California, for various plastic training mine bodies. AJK argues that TPC's low prices of $1.99 and $2.08 per unit constitute an "irresponsible low ball" offer which should not have been accepted.

We dismiss the protest.

AJK maintains that TPC's prices are unreasonably low because they do not include all the cost elements which are required to produce acceptable products. According to the protester, the prices do not include profit and are far below both the Army's cost estimates and the prices offered by all other offerors. In this regard, the protester specifically disputes all the elements contained in a cost breakdown of its prices submitted by the awardee to the agency. AJK argues that acceptance of TPC's offer is unfair to all other bona fide offerors and states that the offer should have been rejected as unacceptable.

The Army responds that it contacted the awardee after the proposals were submitted and had the firm verify its prices. The agency further reports that it contacted other Army activities which held contracts with TPC and determined that its past performance was satisfactory prior to determining that TPC was a responsible offeror under the RFP. Since there is nothing on the face of TPC's offer that took exception to any of the RFP specifications, the offer was technically acceptable. Service & Sales, Inc., B-229602, Nov. 25, 1987, 87-2 CPD Para. 525. Despite the protester's varied arguments to the contrary, where a firm has offered to perform as required, there is no legal basis for objecting to award to that firm on the basis of a below cost offer so long as the firm is, as was the case here, found responsible. INSCOM Electronics Corp., B-228322, Oct. 30, 1987, 87-2 CPD Para. 421.

TPC's ability to perform at its offered prices is a matter of responsibility and our Office will not review protests of affirmative determinations of responsibility absent a showing of possible bad faith or fraud on the part of procuring officials or that definitive reponsibility criteria set out in the solicitation may not have been met. Bid Protest Regulations, 4 C.F.R. Sec. 21.3(f)(5) (1987); Service & Sales, B-229602, supra. Neither exception has been alleged in this case.

Finally, the protester has made a number of arguments concerning the alleged unfairness of TPC's arrangement with its raw material supplier and about TPC's ability to deliver a product which will meet the specifications. It is well recognized that a firm may enjoy a competitive advantage by virtue of its own particular circumstances. As long as the advantage is not the result of preference or unfair action by the government, the government is not required to equalize the competitive position of the bidders. Automated Datatron, Inc., B-219195, July 1, 1985, 85-2 CPD Para. 9. The asserted advantage in this case is not connected with any government action.

Furthermore, whether the product TPC actually delivers complies with the requirements of the contract resulting from the RFP involves a matter of contract administration which this Office does not review under its bid protest function. 4 C.F.R. Sec. 21.3(f)(1).

The protest is dismissed.