A firm protested the Air Force's award of a fixed-price contract for refueling booms, contending that the awardee's item bid price was lower than its price on a prior contract and was indicative of an attempt to eliminate small business competition. GAO believed that, in stating that the awardee's price was below its price on a prior contract, the protester may have been alleging that the offer contained an error. GAO has held that: (1) an agency's acceptance of a buy-in or below-cost, fixed-price offer is not legally objectionable and does not provide a basis on which to challenge a contract award; (2) whether an offerer's price is below its cost is a matter for the contracting officer to consider in determining responsibility; (3) it will not consider protests concerning affirmative determinations of responsibility absent a show of fraud or bad faith; (4) only the contracting parties can bring forth all necessary evidence to resolve mistake questions; and (5) speculation that an awardee may have made a mistake does not provide a valid basis for protesting the award. Accordingly, the protest was dismissed.
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