Protest of Bid Rejection for Unreasonableness

A firm protested an agency determination that its bid was unreasonable. When the two bids received for a construction contract were 24 and 32 percent higher than the Government's estimate, the agency notified the bidders that their bids had been determined to be unreasonable and that negotiations would be undertaken. The Government reviewed the basic estimates in detail with the bidders, and was unable to find any item that appeared excessive or unreasonable. After proposals submitted pursuant to the negotiations were opened, the agency awarded the contract to the only other bidder who was also the lowest bidder. After bid opening, the agency discovered an error in the Government's estimate of over $47,000. The protester maintained that the agency did not make enough effort to assure that its bid price was unreasonable; the agency's attempt to verify its estimate was inadequate; and under the circumstances, the agency recognized that the protester's bid price was not unreasonable, but refused to sustain the protester's position on the assumption that the agency lacked authority to sustain the protest. GAO did not question the agency's authority to cancel the invitaion for bids, and has previously upheld the rejection of bids and readvertisement where the lowest eligible bid exceeded the Government's estimate by as little as 16 percent. Regarding the contention that the agency did not devote enough effort to assure that the protester's bid was in fact unreasonable, GAO was unable to find that the contracting officer's acceptance of the Government's estimate was without a reasonable basis since the record indicated that every possible effort was made to assess the accuracy or inaccuracy of the Government's estimate. The protester's allegation that the agency knew its bid was low but refused to sustain the protest because it assumed it lacked the authority to do so, was academic, and GAO would not consider it.