Protest Against Bid Rejection

An engineering laboratory firm protested the decision by the General Services Administration (GSA) not to award it an automated data processing schedule contract for computer equipment and associated communications devices. The agency declined to award a contract to the protester because it determined that the discounts offered were not as favorable as those available to the protester's commercial customers. The protester argued that the system of awarding contracts based on evaluation of discounts was unfair and did not result in the Government getting the lowest price and, second, GSA mishandled the negotiations by using an auction technique and an invalid estimate of the expected volume of orders. The first protest was untimely as the solicitation clearly stated that the contracts would be awarded on the basis of discount evaluations. GSA did not engage in improper auction procedures. Auction connotes direct price bidding between two competing offerors, not price negotiation between offeror and agency. The agency's projection of future sales volume based on an increase in volume in the year proceeding negotiation was not arbitrary or unreasonable.