Protest of Bid Rejection as Nonresponsive

B-197471.2: Aug 14, 1981

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A firm protested a Veterans Administration (VA) determination that its bid was nonresponsive. The record showed that the solicitation was a two-step, formally advertised procurement for the replacement of a telephone system at a VA medical center. Bidders found to be technically acceptable in the first step were to provide bids based on lease or purchase options in the second step. The invitation for bids (IFB) instructed bidders submitting purchase options to fully describe the purchase plan, the total cost and the method of payment. The IFB also admonished bidders that any advance payment plan would not be accepted which provided for payments in excess of the value of service rendered. From the protester's purchase option bid, VA determined that the payment of 15 percent of the purchase price prior to contract performance constituted a prohibited advance payment and, consequently, rejected the protester's bid as nonresponsive. In its protest, the protester argued that, prior to submitting its bid, it contacted the designated VA contracting official concerning the meaning of the IFB section on advance payments and that the official stated that the IFB section referred to the company's normal method of payment. The protester thus contended that the rejection of its bid offering its normal method of payment was unfair and also showed that the advance payment section was ambiguous. GAO held that it was clear from the record that the protester would not have earned 15 percent of the contract price at the time of contract execution. Therefore, that amount constituted an improper advance payment. Further, since the payment plan was a material condition of the bid, the bid was properly rejected as nonresponsive. Concerning the allegedly misleading advice given to the protester by VA, GAO held that, since the only evidence in the record was the conflicting statements of the protester and the contracting agency, the protester had not carried its burden of affirmatively proving its case. Accordingly, the protest was denied.

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