[Protest That DLA Acted in Bad Faith by Failing To Negotiate With SBA for Fair Market Price]

A firm protested that the Defense Fuel Supply Center (DFSC) acted in bad faith by failing to negotiate with the Small Business Administration (SBA) for a fair market price for a fuel oil item under a request for proposals reserved for 8(a) subcontracting. The protester asserted that the action was taken in order to prohibit it from accepting an award to which it was entitled. In order to show bad faith, a protester must offer irrefutable proof that an agency action was taken with the intent to injure the firm. Since the protester had already accepted the DFSC fair market prices for three out of four items under the request for proposals, GAO could not conclude that DFSC intended to deprive the protester of an award for the remaining item by setting an unacceptable fair market price. However, the record indicated that the agency acted unreasonably by refusing to adjust the price. GAO found evidence that the protester could not have procured its fuel oil supplies in the local area at the given fair market price without suffering a loss on the subcontract. Therefore, although a showing of bad faith was not made, GAO advised the agency of its concerns in the matter. Accordingly, the protest was denied.