Protest of Contract Modification

A firm protested the modification of a contract by the Navy for radar indicators. The modification required the awardee to make some changes to radar indicators already delivered to the Navy. The protester contended that the modification provided the awardee with: (1) a financial and technical bailout under the current contract, and (2) an inequitable financial edge for all competitive procurements. In support of this argument, the protester stated that the anticipation of receiving such Government financial aid allowed the awardee to offer a lower price than its competitors. GAO has held that a contract modification is a matter of contract administration which is primarily the function and responsibility of the contracting agency and is not for resolution under the bid protest function unless the modification is beyond the scope of the contract. In this case, the modification was to correct deficiencies detected in material delivered under the contract. Regarding the contention that this action gave the awardee an unfair advantage, GAO has recognized that a firm may enjoy a competitive advantage because of its incumbency, and the Government is not required to equalize the competition unless the competitive advantage enjoyed is the result of preference or of unfair action by the Government. Accordingly, the protest was dismissed in part and denied in part.