[Protest Against Rejection of Bid]

A firm protested the rejection of its bid for the management and operation of an audiovisual center under an invitation for bids issued by the Air Force. The protester contended that the Air Force improperly awarded the contract to the second low bidder despite the fact that it cooperated with the requests made by the contracting officer. Further, the protester requested that it be reimbursed for the costs of preparing its bid because of the alleged arbitrary and capricious action by the Air Force in handling it. The record showed that the contracting officer asked the Defense Contract Administration Services Management Area (DCASMA) to perform a financial preaward survey of the protester, which was the apparent low bidder. Although the survey was favorable to the protester, the contracting officer asked DCASMA to verify some of the financial data. Because of the delay in ascertaining its financial status, the protester was asked on several occasions to extend its bid acceptance period for an additional period. The protester was later notified that its bid was being rejected for failure to extend the original 60-day acceptance period. The Air Force contended that the award to the second low bidder was proper, because the protester refused to extend its bid despite several attempts by the agency to obtain an extension. Further, the Air Force questioned whether the protester was an interested party under bid protest procedures. GAO found that: (1) the protester indicated to the Air Force both verbally and by letter that it intended to extend its bid acceptance period; (2) the request by the Air Force for an extension of the protester's bid was unreasonable; (3) the expiration of the protester's bid bond period did not preclude the contracting activity from considering or accepting the bid; and (4) the contracting office could have made a responsibility determination prior to the expiration of the protester's letter of credit. Accordingly, the protest was sustained and a recommendation was made that, if otherwise proper, the award to the second low bidder be terminated and the contract awarded to the protester; based on this decision, it was not necessary to consider the claim for bid preparation costs.