[Protest of Rejection of Bid]

A firm protested the rejection of its bid under an invitation for bids (IFB), a 100-percent small business set-aside, issued by the Army for developing and presenting physical fitness classes. The protester contended that the Army erroneously determined that it was not a small business and followed improper procedures in making that determination. The Army stated that the firm does not qualify as a small business concern, because it represented itself as a nonprofit organization and, therefore, is not an interested party. GAO held that: (1) the protester is an interested party under GAO bid protest procedures because, if the protest were sustained, the protester would be eligible for award; and (2) a concern must be a business entity organized for profit to qualify as a small business concern, and the contracting officer acted reasonably in rejecting a bid which the bidder represented as a nonprofit organization. Accordingly, the protest was denied. However, GAO noted that the procurement was deficient because the solicitation set out a method for evaluating bids which was inappropriate for a formally advertised IFB. Since the contract has been completely performed, it was not feasible to recommend any corrective action, but GAO advised the Secretary of the Army of the deficiencies noted.