Protest of RFQ Cancellation

The Department of the Army, Corps of Engineers awarded two contracts, one to Air Base Constructors (ABC) and the other to Negev Airbase Constructors (NAC), for the design and construction of two separate airbases in Israel. A firm protested the cancellation of ABC's request for quotation (RFQ) and of NAC's RFQ. Both solicitations were issued for the transportation from the United States to Israel of equipment needed by each of the prime contractors for the construction of their respective airbase. The protester argued that NAC and ABC were acting in a purchasing agent type of function for the Government. In addition, the protester made a general type reference to the prime contracts which required Government approval prior to subcontract awards and mentioned the possibility of incompetence, fraud, conspiracy and rigged bids. The Corps' position was that the protest did not come within the standards set forth by GAO concerning subcontractors over which they exercise jurisdiction. More specifically, the Corps argued that neither NAC nor ABC could be characterized as purchasing agents and the Corps believed that the record did not support the protester's allegation of fraud. GAO did not agree with the allegation that NAC and ABC were purchasing agents for the Government. With respect to the reference concerning the Corps' subcontract approval authority, the exercise of such authority alone, was not a basis for GAO to consider the merits of a subcontract protest. Furthermore, the allegation of fraud or bad faith, required more than a mere allegation of fraud or an expression of a suspicion of wrongdoing in order for GAO to undertake a review of such charges. Before GAO would intervene, a protester must submit evidence establishing a prima facie case of fraud or of such willful disregard of the facts or such misconduct as to be tantamount to fraud on the part of the contracting officials. The protester has not demonstrated nor have the circumstances shown any fraud or bad faith on the part of the Corps. For these reasons, GAO found no basis for asserting jurisdiction. Accordingly, the protest was dismissed. However, the matter was referred to the GAO audit division for whatever action it deemed appropriate.