[Protest of Navy Contract Award]

B-214032: Jun 18, 1984

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A firm protested a contract award under a Navy solicitation to design and modify specifications to overhaul and repair ships contending that, since it submitted the lowest priced technically acceptable offer, it should have been awarded the contract. Further, the protester complained that the Navy substantially modified the contract's cost ceiling. The solicitation stated that the technical aspect of the procurement was weighted significantly higher. The protester and the awardee submitted best and final offers, and the procuring activity rated the awardee higher technically which gave it an overall higher ranking. GAO has held that an agency may award a contract to an offerer with a higher technical rating, even though its bid is not the lowest one, if the agency determines that the technical difference is sufficiently significant to outweigh the cost difference. GAO found that the Navy's decision was reasonable and in accordance with the solicitation's evaluation criteria. GAO held that the Navy's decision to modify the contract's cost ceiling was reasonable and in the best interests of the Government due to the Navy's increased needs and the fact that orders had already been placed. Accordingly, the protest was dismissed in part and denied in part.