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Request for Bid Preparation Costs

B-196029.3 Aug 08, 1980
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Highlights

A firm requested reimbursement for costs incurred in the preparation of its bid plus a percentage of its anticipated profit. The request related to a solicitation issued and a contract awarded by the General Services Administration. In an earlier decision, GAO sustained a protest by the firm against the agency's modification of the contract on the basis that the modification had the effect of circumventing the competitive procurement statutes. However, GAO did not recommend remedial action since the system already had been installed. The awardee notified the agency that it would be unable to fulfill the contract within the necessary time period due to a shortage of equipment. Nonetheless, the contracting officer issued the firm a notice to proceed and issued a contract modification to accept a value engineering change proposal that had been offered by the awardee. This involved the installation of a substitute system with somewhat lesser capabilities and at a lower price than the one solicited. GAO felt that this was at least arguably significant and effectively distorted the competition on which the award of the contract was based. To be successful in its claim for bid preparation costs a firm must show not only that the Government acted arbitrarily and capriciously, but such action precluded the firm from receipt of an award. As the protester was only the third low bidder, GAO could not say that but for such action the firm would have been awarded the contract. Thus the claim for bid preparation costs was denied. There was no legal basis for allowing an unsuccessful bidder anticipated profit. Accordingly, the protest was denied.

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