Protest That Contracting Officer Acted Unreasonably

B-200837: Jul 7, 1981

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A firm protested the failure of the Air Force to award it a contract under a program designed to create additional cargo capability by incorporating cargo airlift characteristics in wide body passenger aircraft on order or to be ordered by U.S. air carriers. The government pays the difference between a passenger aircraft and a convertible aircraft and the excess operating costs due to increased weight for a 16-year period. The firm withdrew an earlier contract award protest, but a protest concerning the cost comparison of the two offers remained. The protester alleged that the contracting officer's decision was unreasonable in not awarding it a contract since the firm's offered price was lower than that of the awardee and its aircraft offered more cargo capability. It also contended that the contracting officer acted unreasonably in requiring a firm purchase commitment with an aircraft manufacturer and in refusing to negotiate a profit or fee for the protester. A comparison of the two proposals was not found to be germane to the protest as each offeror had to justify its costs to the satisfaction of the contracting officer to receive a contract. Since the protester had not yet ordered its plane and the awardee had, cost considerations were different for the two proposals. GAO failed to see how the requirement of a firm commitment with a manufacturer to purchase an aircraft was unreasonable or prejudiced the protester. The commitment was necessary to prevent the government from needlessly subsidizing a purchase that was going to occur anyway and to support the costs submitted by the carrier during negotiations. The Air Force contended that it did not need the excess capacity offered by the protester. The solicitation clearly stated that the purpose of the contract was to pay the cost differential between acquiring a passenger aircraft and one with cargo capability. GAO failed to identify any cost risk assumed by the carrier, any difficult or development work, or possible productivity increases. Thus, the contracting officer acted reasonably in denying any profit or fee. The protest was denied.

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