Contract Award Protest

A firm protested the award of a Veterans Administration (VA) contract to the incumbent contractor for grave liner covers for a National Cemetery. The invitation for bids (IFB) solicited bids for grave liners with and without covers. The protester was the low bidder for grave liners with covers. The awardee was the low bidder for grave liners without covers. Subsequent to the award of the grave liner contract, VA found that the use of grave liners without covers created problems because soil conditions were not as VA had anticipated. Rather than terminate the contract, VA decided to procure covers for the grave liners through a competitive procurement, where the incumbent was the low bidder. The protester alleged that the awardee had an unfair competitive advantage in bidding on the cover contract because, as the incumbent on the grave liner contract, the awardee knew what the protester had bid for grave liners with covers. GAO will review the validity of the award procedure where the question of contract termination is dependent upon whether there was an impropriety in the award process. The award was found to be proper, since it was in accord with the IFB award provision, and the problem with the soil conditions was not known at the time of the award. Thus, there was no requirement that VA terminate the contract for convenience. Moreover, GAO has recognized that a bidder may enjoy a competitive advantage by virtue of its incumbency or its own particular circumstances. Therefore, the protest was denied.