[Protest of Air Force Contract Award for Electrical Power]

B-235761: Oct 6, 1989

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A firm protested an Air Force contract award for electrical power, contending that the: (1) Air Force improperly calculated the awardee's life-cycle costs, since it used a fixed escalation rate to calculate the awardee's coal costs and did not consider the cost of constructing power lines to tie into the utility company's power system; and (2) awardee could not obtain the permits required to operate a coal-fired power plant. GAO held that: (1) the Air Force properly used a fixed escalation rate to calculate the awardee's coal costs, since the awardee owned the coal mine and could guarantee a fixed rate; (2) the Air Force reasonably did not consider the power line construction costs, since the awardee's system met the reliability requirement without the intertie; and (3) it would not review the Air Force's affirmative determination of the awardee's responsibility. Accordingly, the protest was denied.