[Protest of Navy Decision Following Reevaluation of Proposals for Ship Overhaul and Repair]

A firm protested the Navy's determination that an award to another firm should remain in place after reevaluation of proposals under a solicitation for ship overhaul and repair, contending that: (1) the determination was unreasonable, since the Navy was aware of the awardee's serious performance problems under a major, ongoing Navy contract; and (2) GAO should recommend that the Navy terminate the contract and make award to it as the next highest-ranked bidder. GAO held that the: (1) Navy unreasonably reevaluated proposals, since it ignored the awardee's ongoing performance problems; (2) Navy should not terminate the contract, since that would not be in the government's best interest; and (3) protester was entitled to reimbursement for its bid and protest preparation costs. Accordingly, the protest was sustained, and GAO recommended that the Navy resolicit and not exercise any contract options.