Protest Alleging Agency Used Improper Procedures in Assessing Technical Competence

Martel Industries, Inc., a small business, protested the award of two contracts by the National Marine Fisheries Service of the Department of Commerce for field investigation reports on permit applications in Florida. The project was divided into separate items for each of 11 counties and the invitation for bids (IFB) specified the required educational and work experience in marine ecology for prospective bidders. At the bid opening, Martel was informed that it was the apparent low bidder on four items and also the apparent overall low bidder, but that the award would be delayed until certain questions regarding personnel competence were resolved. Ultimately, Martel was ruled not to satisfy the IFB requirements. Martel protested this determination to GAO and also requested that the Small Business Administration (SBA) be asked to rule on its competency. Martel withdrew another objection against award of a contract during the protest procedure but replaced this charge with a claim for reimbursement of bid preparation costs. The agency claimed that Martel's protest was untimely in that the grounds were known more than 10 working days before filing. The Fisheries Service furthermore claimed that its disqualification of Martel as not responsive was a "rational action," and that Martel's modification of its relief claim was unjustified. Because of an alleged need for urgency, the Fisheries Service awarded contracts for the project without awaiting the GAO decision or a determination of competency by SBA. GAO found Martel's protest to be timely and noted that the protester had requested a certificate of competency (COC) determination by SBA from the agency; Martel's protest was received by GAO within 10 working days of Martel's notification by the agency that its request for a COC determination had been denied. This matter should have been referred to SBA despite the agency's plea of urgency. In fact, the agency had no choice but to refer the determination to SBA, the ultimate authority in such matters. Martel, however, cannot recover bid prepaation costs because the contracting agency's actions were not arbitrary or capricious, the only permissible grounds for allowing recovery, and protest preparation costs are not compensable. The claim was denied, but the Department of Congress was advised to avoid a repetition of these circumstances.