Complaint About Contract Awarded by Federal Prison Industries, Inc.

In response to a congressional request, GAO considered a complaint that Federal Prison Industries, Inc., rejected a low bidder's proposal because it did not comply with the request for proposals (RFP).

GAO found that the proposal had been rejected because a representative of the complainant had not visited and inspected the work site as required by the solicitation. Although this fact was the subject of contention, GAO has held that the failure to make a mandatory site visit is not in itself grounds for rejection of an otherwise acceptable proposal, since a firm would still be bound to perform under the terms of the contract at the offered price. In addition, the proposal was rejected as nonresponsive to the solicitation because it was not submitted on forms provided with the solicitation, the equipment proposed deviated from that specified, and a trade-in allowance was subject to change. GAO found that the items which did not comply with RFP requirements comprised only a small portion of the total number of items required. In addition, it appeared that the agency did not adequately consider whether the few nonconforming items were so material as to justify rejecting the proposal despite the considerable cost savings which the proposal offered. In view of the substantial potential savings, GAO questioned the rejection of the proposal. However, since it found no specific deficiencies and believed that the rejection of the proposal was an honest disagreement as to the degree of the bidder's compliance, GAO made no recommendations. GAO suggested that the Commissioner of Federal Prison Industries, Inc., review its procurement procedures and give consideration to higher level approval for rejection of offers if the offers could result in sizable savings.