Eastman Kodak Company

Eastman Kodak Company protested the award of a contract for 16 millimeter roll film reader-printers to 3M Business Products Sales, Inc. under a solicitation issued by the Naval Regional Procurement Office, Philadelphia, Pennsylvania. Kodak's primary complaint was that the Navy evaluated maintenance costs for its equipment by using a Federal Supply Schedule rate, rather than a lower estimate included in its proposal. Kodak argued that its maintenance costs should have been evaluated at $250 a year throughout the life of its equipment, since its Federal Supply Schedule annual maintenance rate was based on much greater use. Moreover, Kodak stated, the Navy was inconsistent in using $250 as a basis for evaluating first year maintenance costs and $480 for evaluating the same costs for subsequent years. GAO believed that the Navy had failed in the request for proposals to advise offerors of the basis and procedures for cost evaluation. Technical evaluation criteria were fixed, but the Navy apparently decided to use offerors' Federal Supply Schedule rates for annual maintenance and to apply those rates over 8 years, minus warranty periods, after receiving best and final offers. Kodak also argued that the Navy should have suspended performance while its protest was being considered. GAO held that if a contracting agency refuses to do this, then the protester may seek relief in the Federal courts. Kodak did not do so. Therefore, GAO recognized that there would be no relief for Kodak, since all the reader-printers covered by the contract had been delivered. However, GAO advised the Secretary of the Navy that the solicitation was defective and the cost evaluation procedures improper, and recommended corrective action for future procurements.