[Protest of IRS Proposal Rejection]

A firm protested the rejection of its bid by the Internal Revenue Service (IRS), contending that: (1) IRS erroneously determined that its proposed product failed to meet solicitation requirements; and (2) IRS applied a different and more lenient standard in evaluating the awardee's product. GAO noted that, although the protester's argument should have been filed before the bid closing because it resulted from ambiguities in the solicitation itself, the protest was timely since the protester was unaware of the deficiency. GAO held that the protester was informed of a solicitation requirement during oral negotiations which obligated it to meet that provision. Since it failed to do so, rejection was proper. Although IRS provided an incorrect justification for bid rejection at the time of rejection, it subsequently provided an acceptable reason. GAO also held that IRS evaluation procedures were actually prejudicial toward the protester but that the protester failed to upgrade its proposal even after it was given an opportunity to correct its proposal through discussions. Accordingly, the protest was denied.