[Request for Reconsideration of Protest of Exercise of Option]

B-208281.2: Jul 12, 1983

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The Army requested reconsideration of a decision which sustained a protest against the exercise of a 100-percent option that it awarded to a firm under a solicitation for electronic tubes. Specifically, the Army raised the issue of whether the protester's lower priced offer for additional equipment was sufficient to force resolicitation rather than an exercise of the option. In the prior decision, GAO recommended that the awardee's option contract be terminated for the convenience of the Government. GAO had held that the Army could exercise the option only if it would provide the Government with the best price available. However, considering the passage of time, evidence that termination would be costly to the Government, and the protester's agreement, GAO modified the decision to the extent that termination was no longer recommended. However, GAO affirmed all other aspects of the prior decision.