BID PREPARATION COSTS NOT REIMBURSABLE AFTER CANCELLATION SOLICITATION

By Kent Berk on February 2nd, 2010 in BLOG, BUSINESS LAW

Lockheed Martin Systems Integration-Owego and Sikorsky Aircraft Company successfully challenged the Air Force’s award to The Boeing Company of the contract to supply the Combat Search and Rescue Replacement Vehicle for the CSAR-X program.

The GAO sustained the protest because the “agency improperly amended the solicitation.” 

Specifically, the agency eliminated unique aspects of the proposed helicopters (including maintenance requirements) as a consideration in the agency’s calculation of certain aspects of the evaluated Most Probable Life Cycle Cost, and substituted a subjective consideration of potential maintenance efficiencies, but precluded offerors from generally revising their proposals to take this change into account.” Since those changes could have had an impact on the proposals, the GAO “recommended that the Air Force permit offerors to revise both the cost/price and non-cost/price aspects of their proposals in response to the changed evaluation scheme.

The GAO “further recommended that the agency terminate Boeing’s contract if the evaluation of revised proposals resulted in a determination that its proposal no longer represented the best value to the government, and that LMSI and Sikorsky be reimbursed the costs of filing and pursuing their protests, including reasonable attorneys’ fees.”

After amending the solicitation and allowing revised proposals, all as recommended by the GAO, the Secretary of Defense terminated the CSAR-X program. As a result, the Air Force terminated the solicitation. Thereafter, Lockheed and Sikorsky requested that the GAO modify its direction to require the Air Force to award them their costs of preparing their proposals, and the costs of the protest. In its December 15, 2009 decision, the GAO rejected the request:

As is clear from the record, the agency promptly implemented our recommended corrective action following our decision, and the protesters were furnished an opportunity to compete for the contract. LMSI and Sikorsky participated in the reopened competition on the same footing as the other competitive range offeror, Boeing, and all three offerors faced the same potential risk of a proper decision by the agency to cancel the procurement. This is the same risk that is inherent in any competitive acquisition. Since the protesters have made no showing that the cancellation of the CSAR-X solicitation was unreasonable or otherwise improper, the fact that the reopened competition did not ultimately result in an award provides no basis for us to recommend reimbursement of their proposal preparation costs.