Protest Alleging Award Was Based on Criteria Not Specified in IFB

B-198533: Apr 27, 1981

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Two firms protested the award of a Veterans Administration (VA) contract to a third firm contending that the award was based on criteria not specified in the invitation for bids (IFB). Additionally, one of the the protesting firms objected to any consideration by VA of the other protester's bid. VA agreed that the contract was improperly awarded, and after terminating its contract with the awardee, VA canceled the IFB for reasons it subsequently believed to be erroneous. However, VA believed the cancellation was proper because of the IFB failure to apprise bidders of a significant evaluation factor which originally resulted in the award of the contract. The other Firm protested the cancellation and the VA failure to award it the contract. GAO has held that where an agency cancels an IFB for erroneous reasons but subsequently presents a different reason that would have supported the cancellation initially, GAO will accept the subsequent reason. GAO must determine if the contracting actions taken complied with the applicable statutes and regulations in the light of the totality of the circumstances as they existed at the time. GAO has held that, in canceling an IFB after bid prices have been exposed, contracting officers must find that a cogent and compelling reason exists to warrant cancellation. GAO found the reason advanced by VA to be a cogent and compelling reason which supported the VA cancellation. Accordingly, one protest was denied, and the protest objecting to VA consideration of the other protester's bid was not for consideration.

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