Incumbent Contractor Protests Award

B-196615: Feb 5, 1980

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An incumbent contractor protested the award of a Navy contract to a competing firm. The firm contended that, because of administrative problems in its contract, it was effectively deprived by the Navy of the opportunity to compete under the request for proposals. The protester further contended that the bids were opened in secret, that the initial prices may have been improperly disclosed only to the awardee, and that the awardee could not perform the requirements of the contract at the contract price. The Navy denied that it improperly disclosed any information to the awardee. The Navy received three offers for the incentive-type contract, best and final offers were subsequently submitted, and the awardee's price was lowest. GAO held that, since the protester had submitted a proposal, it was not prevented from participating in the procurement. Therefore, the basis for protest was denied. In a negotiated procurement such as the instant case, contracting officials are precluded from opening the proposals in public. GAO held that the protester had the burden to affirmatively prove its allegation that the Navy improperly disclosed information to the awardee. Since it did not offer such proof, that basis of protest was denied. The protester's only proof for the contention that the awardee submitted a below-cost offer was the difference between its price and that of the awardee. Since the second low offer was close to that of the awardee, GAO held that it was more likely that the protester's price was too high, rather than that the awardee's price was too low. In any event, there is no legal prohibition against the acceptance of a below-cost offer from a responsible firm. Since GAO does not review affirmative determinations of responsibility except in circumstances not applicable here, the basis of protest was dismissed.

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