Protest of U.S. Corps of Engineers Contract Award

B-195001: Jun 11, 1980

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A small business firm protested the award of a contract for two brand name or equal outboard marine propulsion units. The protester stated it was wrongfully denied a contract because the Small Business Administration (SBA) exceeded its authority in determining not to issue a certificate of competency based only on the protester's nonresponsiveness. It also protested that the specifications were unduly restrictive, precluding competition. Since the contract was completed simultaneously with the filing of the protest, the protester requested relief in the form of bid preparation costs. SBA had determined that the protester's equipment would not comply with the specification requirement for propeller diameter. The agency agreed that the matter should not have been referred to SBA for a determination of responsibility, but stated that the protester's bid should have been rejected as nonresponsive. The agency was bound by the SBA determination because of the SBA conclusive jurisdiction. GAO concluded that the protester's bid was nonresponsive and that the agency should not have requested a preaward survey or referred the question of the protester's responsibility to SBA because the bid failed to show compliance with a salient characteristic of the item requested with respect to propeller dimension. Whether or not the specifications were unduly restrictive was academic because the agency did not respond to that allegation. Bid preparation costs are allowed where the agency's actions were arbitrary and capricious and deprived the claimant of an award to which it would have otherwise been entitled. In this case, it was clear that the protester's bid should have been rejected as nonresponsive. Even if the specifications were restrictive, the remedy would have been resolicitation rather than an award to the protester. Thus, the claim for bid preparation costs was denied.