[Protest of Navy Contract Award and Claim for Proposal Preparation Costs]

B-207285: Jun 6, 1983

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A firm protested a Navy contract award under a request for proposals (RFP) for a hydrographic survey and requested proposal preparation costs. While this protest was pending, the awardee exhausted the contract funds without completing the work, and the Navy terminated the contract because it lacked the necessary funds to resolicit. The protester alleged that the Navy failed to identify alleged deficiencies in its proposal and, therefore, misled the firm into believing that its proposal was not deficient in those areas. The Navy admitted that it overlooked the deficiencies and, therefore, did not provide the protester with a reasonable opportunity to correct the deficiencies. However, the Navy denied that it misled the protester or acted in an arbitrary or capricious fashion. GAO found that, by failing to disclose to the protester the basis for its conclusion that its proposal was unrealistic, the Navy failed to hold meaningful discussions with the protester. Accordingly, the protest on this basis was sustained. However, GAO found the other bases for protest to be without merit. GAO found unconvincing an allegation that the Navy misled it into not providing for contingencies. In addition, the protester failed to carry its burden of proof that the Navy departed from the evaluation criteria set forth in the RFP. Finally, GAO would not consider untimely allegations concerning the proposed requirement for ship speed which were not filed with GAO until more than 10 working days after the basis for the allegations should have been discovered. Although GAO sustained the protest, it would not recommend that the Navy resolicit the procurement since it lacked the funds to resolicit. In addition, GAO would not grant the protester's request for proposal preparation costs, because such awards are only justified where the protester shows that the Government's conduct was arbitrary and capricious.