[Protest of Navy Contract Award for Central Processor Units and Right-to-Use Licenses]

A firm protested a Navy contract award for central processor units and right-to-use licenses, contending that the: (1) Navy improperly opened discussions with the awardee after initially making award to the protester; (2) awardee's alternate proposal on which the award was based was unacceptable; and (3) Navy should have held discussions with all competitive range bidders and requested best-and-final (BAFO) offers from all bidders. GAO held that the: (1) Navy held post-award discussions with the awardee to provide it an opportunity to modify its bid and clarify information for determining its alternate bid's acceptability; (2) Navy should have held discussions with all the competitive range bidders and requested BAFO; and (3) protester was prejudiced by the Navy's actions, since the award outcome might have been different if the protester had a chance to modify its bid. Accordingly, the protest was sustained, and GAO recommended that the Navy: (1) hold discussions with the protester and the awardee and request BAFO; (2) terminate the awardee's contract if the protester offers the lowest price and make award to the protester; and (3) reimburse the protester for its protest costs.