[Protest of Army Solicitation for Privatization of Utilities]

B-285209,B-285209.2: Aug 2, 2000

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Two firms protested an Army Corps of Engineers solicitation for privatization of utilities, contending that the: (1) solicitation was defective for failing to acknowledge that state and local approval was required before a contractor was selected; and (2) Corps' decision to consolidate its 13 utilities into five contracts, one for each of its five installations, unduly restricted competition. GAO held that: (1) federal procurement regulations did not require the Corps to obtain state and local approval of the awardees, since doing so would eliminate all but one firm for each utility; and (2) the Corps reasonably determined that a consolidated contract for each installation would result in significant cost savings and would ensure that acceptable offers were received for all of its utility systems. Accordingly, the protests were denied.

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