[Protests of Navy Contract Award for Oiler Ship Design and Construction]

B-231923,B-231923.2: Nov 3, 1988

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Two firms protested any Navy contract award to another firm for oiler ship design and construction. One protester contended that the Navy: (1) improperly included a solicitation specification for the possible consideration of industrial mobilization factors; and (2) originally solicited offers in bad faith, since it had improperly evaluated contract costs. Both protesters contended that the Navy improperly: (1) cancelled the original solicitation; and (2) conducted an auction by issuing an amendment which allowed the incumbent contractor to compete for the contract. The second protester also contended that the: (1) Navy improperly conducted discussions with the incumbent contractor; (2) incumbent contractor had a competitive advantage; and (3) Navy contradicted its policy regarding an industrial mobilization base by allowing the incumbent contractor to compete. GAO held that the first protester: (1) untimely filed its protest regarding alleged solicitation improprieties after bid opening; and (2) failed to show that the Navy acted in bad faith. GAO also held that the Navy: (1) properly cancelled the original solicitation, since it lacked sufficient funds; (2) did not conduct an auction, since it revealed the bid on an existing contract; (3) did not conduct improper discussions with the incumbent contractor; (4) was not required to eliminate the incumbent contractor's advantages; and (5) did not violate its mobilization-base policy, since funding limitations required the solicitation amendment. Accordingly, the protests were dismissed in part and denied in part.

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