[Protest of Air Force Rejection of Bid for Painting Services]

B-220976: Feb 13, 1986

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A firm protested the Air Force's rejection of its bid as materially unbalanced, contending that the Air Force unreasonably determined that its bid might not ultimately result in the lowest overall cost to the government. GAO noted that: (1) although the protester was the apparent low bidder, the Air Force was concerned that the protester's pricing structure, in comparison with the government's estimate and the bids of other commercial firms, was unbalanced; (2) the Air Force specifically asked the protester to verify its second option year figure because it was nearly half of its base year price; and (3) the protester responded that its total bid price was correct but did not offer any explanation as to how it priced the second option year. GAO found that: (1) a bid is materially unbalanced if there is a reasonable doubt that award will result in the lowest cost to the government; (2) a mathematical bid evaluation determines whether each element of the bid carries its proportionate share of the total cost of the work plus profit, which the protester's second option year price did do; (3) if there was a legitimate expectation of a reduction in equipment costs, as the protester alleged, the first option year price should also be lower than the base year price; and (4) acceptance of the protester's bid might not be in the government's best economic interest since the bid would not become low until the final period of performance. Accordingly, the protest was denied.

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