Request for Proposal Preparation Cost

A firm requested reconsideration of part of a GAO decision, which denied the firm's claim for proposal preparation costs. The claim had been filed after the Army rejected the firm's proposal for the provision of tow aircraft services because the firm failed to show that its proposed aircraft met the necessary speed requirement. Although GAO believed that the Army had prejudicially misapplied the Federal Aviation Administration (FAA) regulation compliance requirement, the claim was denied for two reasons: (1) the firm's proposal was properly rejected for failure to meet the speed requirement and was, therefore, ineligible for award; and (2) it was conjectural whether, in the absence of the deficiency in the procurement (Army failure to communicate a shift in its intent/interpretation of the FAA requirement), the firm would have received the award. GAO viewed the FAA requirement as being of central importance since its interpretation could influence the offeror's choice of aircraft. The firm's interpretation of the requirement precluded its consideration of aircraft which met the speed requirement. The firm urged that the success of its claim should turn on its ability to show that the Army breached an implied promise to fairly and honestly consider its proposal, and should not depend on whether the firm would have received the award. However, the firm could only be entitled to award of proposal preparation costs if it could be shown that the actions of the Army, in rejecting the firm's proposal, were arbitrary or capricious. GAO believed that its consideration of the uncertainty surrounding the issue of whether the Army's actions precluded the firm from receipt of the award was proper, and that the denial of proposal preparation costs was proper. Accordingly, the prior decision was affirmed.