Protest of NIH Cost Reimbursement Limitation

B-196353: May 29, 1980

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A university protested the refusal of the National Institutes of Health (NIH) to allow the reimbursement of indirect costs exceeding 8 percent of the total direct costs in connection with the negotiation of a contract. NIH proposed to award multiple contracts to develop courses on cancer prevention for nurse practitioners and physician assistants. It indicated that the 8 percent restriction was used as a matter of longstanding practice in grants and contracts with nonprofit institutions where training projects were involved. NIH contended that the limitation was inadvertently omitted from the solicitation in this instance, but that all offerors in the competitive range were told of the rule and were asked to amend their proposals accordingly. The agency contended that the protest was untimely because it was not filed before the time permitted for proposal revision. GAO held that the protest was timely filed before the next closing date after the protester knew that the contracting activity would insist upon the allegedly restrictive requirement. Earlier discussion of the agency's policy was not sufficient to make the protest untimely because the protester was merely advised of the policy and asked to amend its proposal, but was not told that compliance was mandatory. GAO also held that, since the limitation was applied to all offerors and no offeror's relative position vis-a-vis others was affected, the condition was not protestable. Accordingly, the protest was dismissed.