Claim for Proposal Preparation Costs

A firm claimed that the Bureau of Mines failed to advise offerors of the exceedingly limited funds available for the performance of a contract, thereby misleading it in the preparation of its proposal. The firm initially contended that the successful offeror was not capable of accomplishing the required work at the contract award price. The firm dropped its protest after receiving the agency's protest report containing the Government estimate of work. It contended that it was entitled to compensation for proposal preparation costs because the agency knowingly and capriciously withheld the level of work it was prepared to fund. GAO treated the matter solely as a claim for proposal preparation costs. The standard for determining that the costs should be recovered may be satisfied by subjective bad faith on the part of procuring officials which deprives the offeror of fair and honest consideration, no reasonable basis for administrative action, a sliding degree of proof commensurate with the amount of discretion afforded the procuring officials, or proven violation of pertinent statutes or regulations which may suffice for recovery. Also, GAO has stated that in a negotiated procurement, costs may not be recovered unless it is reasonably certain that the disappointed offeror would have received the award had it not been for the alleged Government action. In this case, GAO held that none of the requirements was met and the failure of the claimant to receive award was due solely to the fact that its proposed costs were excessive. Therefore, the claim for proposal preparation costs was denied.