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A firm protested that five invitations for bids (IFB) which were issued by the General Services Administration for custodial services contained provisions which imposed allegedly unfair monetary deductions for defective performance. The protester contended that the provisions authorized deductions for the cleaning of an entire room based on the contractor's unsatisfactory performance of a portion of the room; therefore, they provided no variation between the amounts deductible for a marginal failure and a complete failure and depriving the contractor of credit for partial or substantial performance. GAO has found that, absent circumstances where unsatisfactory cleaning of a portion of a room would render the entire room unsuitable for the government's purpose, such provisions would impose an unfair and unreasonable penalty. While the threat of such a penalty might encourage satisfactory performance, such a penalty is improper and unenforceable. Therefore, GAO recommended that future GSA solicitations be amended to prevent the adverse effect such penalty provisions have on competition. However, GAO did not believe that the questioned provisions were of sufficient magnitude to require correction of these solicitations since contracts have been awarded on each solicitation. Therefore, GAO denied the protest, but recommended revision of future solicitations.

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