[Request for Reconsideration of Recommendation for Corrective Action Under Air Force Procurement]

The Air Force requested reconsideration of a recommendation for corrective action contained in a decision which sustained a protest of the Air Force's failure to reject the awardee's bid as ambiguous. GAO had recommended that, if termination and reaward of the contract were not practicable, the protester be reimbursed for bid preparation costs. The principle involved is that a disappointed bidder is entitled to reimbursement where the contracting agency acts in an arbitrary and capricious manner and, except for such agency action, the bidder would have had a substantial chance of being awarded the contract. GAO withdrew its recommendation that the existing contract be terminated because there was no reason to dispute the Air Force's position that termination would be costly and cause additional delays in project completion. However, GAO affirmed its holding on bid preparation costs because the awardee's bid could have been interpreted in two ways and, under the second interpretation, it would not have been low. Although the Air Force argued that the contracting officer's motivations were not improper, GAO stated that his motivations were not in question, but that the actions of the Government were such that each bid was not fairly and honestly considered. Finally, the unsuccessful bidder requested that it be paid the anticipated profits under the contract. GAO stated that there is no legal basis to pay anticipated profits to an unsuccessful bidder. Accordingly, GAO withdrew its recommendation that the contract be terminated but affirmed its position that the unsuccessful bidder be granted bid preparation costs.