[Protest of IRS Contract Award]

A firm protested an Internal Revenue Service (IRS) contract award for waste collection services. The solicitation was a total small business set-aside, and the protester, which was a large business, contended that the awardee's bid price was excessive. The protester disputed the IRS determination that the awardee's bid was fair and reasonable. However, IRS stated that the Government estimate was in line with the contested bid and that the awardee had performed the same services in the prior year for the same price as it bid here, notwithstanding the fact that the awardee's bid was 51 percent higher than the protester's courtesy bid. IRS further asserted that it was not required to compare a small business bid with a courtesy bid to access price reasonableness. In view of the congressional policy of favoring small businesses, a fair proportion of Government contracts may be awarded to small business firms, even at premium prices. Therefore, the fact that the awardee's bid was 51 percent higher than the protester's did not render the bid unreasonable. GAO stated that the extent to which a courtesy bid indicates a price that actually would be available is largely a matter for the contracting officer's judgment, and the determination of whether a small business bid is reasonable may also be based on other relevant facts. GAO will not question such a determination unless it is clearly unreasonable or there is a showing of bad faith or fraud. Since there was no such showing in this case, GAO found no reason to disturb the contracting officer's findings. The protester also expressed concern that IRS will continue to set aside waste collection contracts for small businesses, thereby improperly providing the awardee with sole-source contracts. GAO would not consider this argument because bid protest procedures do not provide for challenging future procurements. GAO found that other bases of the protest alleging improprieties which were apparent on the face of the solicitation were untimely, because they should have been protested before bid opening. Accordingly, the protest was denied in part and dismissed in part.