Sea Box asserts that the agency improperly determined that the bid prices all were unreasonably high, and challenges the agency’s determination that it lacked sufficient funds. The protester asserts that the original estimate of $624,750 was not based on proper market research and therefore was unrealistically low. Comments at 2. Sea Box concludes that, since its bid for non-Chinese-made connexes was low, the agency should have awarded it a contract instead of canceling the IFB.

Cancellation of a solicitation after bids have been opened and prices have been exposed is only permitted where a compelling reason exists to cancel. National Projects, Inc., B‑283887, Jan. 19, 2000, 2000 CPD para. 16 at 4; Federal Acquisition Regulation (FAR) sect. 14.404-1(a)(1). A contracting agency properly may cancel a solicitation when sufficient funds are not available, regardless of any disputes concerning the validity of the government estimate or the reasonableness of the low responsive bid price. National Projects, Inc., supra; J. Morris & Assocs., Inc., B‑256840, July 27, 1994, 94-2 CPD para. 47 at 2 n.1; Armed Forces Sports Officials, Inc., B-251409, Mar. 23, 1993, 93-1 CPD para. 261 at 2-3, recon. denied, B-251409.2, May 24, 1993, 93-1 CPD para. 402.

Here, only two bids--Sea Box’s and one other--offered products that met the solicitation’s BAA requirements, and by the time the agency canceled the IFB, Sea Box was unable to supply 238 connexes that were BAA compliant. The agency determined that both bids exceeded the original budgeted funds and the additional funds identified by the contracting officer, and the protester has not shown otherwise. Under these circumstances, the agency had a compelling reason to reject all bids and cancel the solicitation.

Our conclusion is not changed by Sea Box’s observation that the IFB allowed the agency to make multiple awards, meaning that award could be made for less than the entire requirement, and that the agency therefore could have purchased a quantity of connexes from Sea Box up to the available funding. Comments at 3-4. While the IFB allowed the agency to make multiple awards, it did not require the agency to do so. The management of an agency’s funds generally depends on the agency’s judgment concerning which projects and activities shall receive increased or reduced funding. National Projects, Inc., supra at 5; Armed Forces Sports Officials, Inc., supra, at 2. Thus, the failure to make award to Sea Box for a reduced quantity was not improper.  (Sea Box, Inc., B-400198, August 25, 2008) (pdf)

With regard to the cancellation of the IFB, a contracting agency must have a compelling reason to cancel an IFB after bid opening because of the potential adverse impact on the competitive bidding system of resolicitation after bid prices have been exposed. Federal Acquisition Regulation (FAR) sect. 14.404-1(a)(1); HDL Research Lab, Inc., B-254863.3, May 9, 1994, 94-1 CPD para. 298 at 5. Where a solicitation contains inadequate or ambiguous specifications, or otherwise does not contain specifications that reflect the agency’s actual needs, the agency has sufficient reason to cancel. FAR sect. 14.404-1(c)(1); Days Inn Marina, B-254913, Jan. 18, 1994, 94-1 CPD para. 23 at 2. Contracting officials have broad discretion to determine whether a compelling reason to cancel exists, and our review is limited to considering the reasonableness of their decision. Chenega Mgmt., LLC, B-290598, Aug. 8, 2002, 2002 CPD para. 143 at 2.

USAID first contends that its decision to cancel BOQ B was reasonable because the specifications for Class 300 gate valves were ambiguous with regard to whether NRS or RS gate valves were required. USAID states that the omission of language specifying NRS valves likely arose because the shortcomings of RS valves in buried applications appeared self-evident to USAID’s engineers and outside technical staff. AR, Tab 3, Memorandum, at 5. Thus, to these engineers, specifying that the project was for buried water lines meant that only NRS valves were suitable. USAID therefore argues that the specifications were ambiguous because its engineers interpreted the specification language to mean that only NRS valves would work, while to Corcel, the specification of a buried application did not eliminate RS valves from consideration.

Specifications must be sufficiently definite and free from ambiguity so as to permit competition on an equal basis. Hebco, Inc., B-228394, Dec. 8, 1987, 87-2 CPD para. 565 at 2-3. An ambiguity exists if a solicitation requirement is subject to more than one reasonable interpretation when read in the context of the solicitation as a whole. Phil Howry Co., B-245892, Feb. 3, 1992, 92-1 CPD para. 137 at 2-3. Based on our examination of the record here, we do not agree with the agency that the specifications were ambiguous in the context of the solicitation as a whole. Rather, as explained below, we conclude that Corcel’s interpretation of the solicitation, as written, was the only reasonable interpretation.

The specification requirements for Class 300 gate valves, as relevant here, were limited to the statement that the valves must be suitable for buried service. However, the specification document attached to the BOQ also contained requirements for other types of valves, and in a specification for lower pressure valves, the specification document explicitly required that the valves be “[s]uitable for buried service with non-rising stem.” AR, Tab 5, at 5 (emphasis added). By clearly requiring NRS valves in a specification for lower pressure buried gate valves, but not clearly requiring NRS valves for the Class 300 gate valve requirement, the solicitation suggested that any type of Class 300 gate valves suitable for buried service would be acceptable. Furthermore, the specifications listed “Velan” as an approved manufacturer of the required Class 300 valves. As pointed out by Corcel, Velan does not manufacture a Class 300 NRS gate valve, although it does manufacture a Class 300 RS gate valve. Comments at 4. The agency does not dispute this fact.  Under these circumstances, we think that Corcel’s interpretation of the specifications, that the valves needed only to be suitable for buried use and were not required to be NRS, is the only reasonable interpretation. Therefore, we conclude that there was no ambiguity in the specifications that would justify cancellation of BOQ B of the IFB.

USAID next contends that its decision to cancel BOQ B was reasonable because, if Corcel’s interpretation of the solicitation was the only reasonable reading, then the specifications failed to meet the agency’s needs for the intended project. We agree.

An IFB may be canceled after bid opening, and all bids rejected, where an award under the IFB would not serve the government’s actual needs, Eastern Technical Enter., Inc., B-281319, B-281320, Jan. 22, 1999, 99-1 CPD para. 17 at 2, and our Office will defer to the agency and to the technical expertise of its engineering personnel in defining the government’s needs. Corbin Superior Composites, Inc., B-242394, Apr. 19, 1991, 91-1 CPD para. 389 at 5; Kings Point Mfg. Co., Inc., B-210757, Sept. 19, 1983, 83-2 CPD para. 342 at 3. Accordingly, we will question that determination only where it is shown to have no reasonable basis.

Although Corcel has zealously advocated the technical merits of its customized RS valves, we conclude from the record that an award under BOQ B of the IFB would not have met the agency’s needs, and that the cancellation of BOQ B of the IFB was therefore reasonable. Based on our review of the record, and specifically of the statements of the contracting officer, the USAID engineer, the PWA, and the independent engineering firms consulted by USAID, it is clear that all parties to the approval of the solicitation understood the specifications to require NRS gate valves. These parties understood NRS gate valves to be necessary to the project due to their perceptions of the inherent shortcomings of RS valves in buried applications and their understanding of the PWA’s technical standards, and clearly did not anticipate that a bidder would offer RS valves customized for buried applications. According to the agency, standard off-the-shelf RS valves are not suitable for buried applications due to several concerns. First among these is that the threaded stem of a RS valve is at least partially outside the valve body itself, and if buried, would be directly exposed to dirt and debris that would jam and corrode the mechanism. Engineer’s Statement of Facts, at 4. Second, RS valves have more maintenance issues as they require periodic lubrication, which would be impossible in the case of a buried valve. Id. Third, due to their rising mechanism, RS valves are greater in height than NRS valves, which imposes restrictions on their use, especially where pipelines are to be buried in roads.  Corcel’s customized valves claim to address the major shortcomings of RS valves in buried uses by equipping the standard RS valve with custom stem enclosures, sealed lubrication housings, and a separately manufactured valve box. However, these customizations do not allay all of the agency’s concerns about the use of RS valves in buried applications, and introduce some additional concerns. For example, the agency remains concerned about the lubrication needs of RS stem valves, and how those needs would be met once the valves were buried. Agency Technical Supplement, at 3. In response, Corcel has referred to its manufacturer’s catalog sheet on “adapto-gear actuators” which are “fully enclosed light weight, maintenance free, bevel gear units for valves that require gearing to facilitate operation.” Comments, at 8; Corcel Supplementary Response, at 4. Corcel highlights the assurance that these parts are “maintenance free.” However, this claim relates to the adapto-gear actuator, an accessory item, and not the RS valves themselves. See Comments, Tab 12. It is unclear that such an accessory, for valves that require gearing, would be suitable or necessary for the valves required under the BOQ. Protest, Tab 3, at 1. Furthermore, the agency is reasonably concerned that these customizations and accessories may themselves add an unnecessary maintenance burden on the PWA, and that the addition of such customizations and accessories will further exacerbate the height drawback inherent to RS valves. Agency Technical Supplement, at 3. Finally, despite Corcel’s customizations, Corcel is still offering RS valves, which the agency is reasonably concerned will not be acceptable to the PWA. Contracting Officer’s Statement of Facts, at 4; Engineer’s Statement of Facts, Tab D.

In light of the foregoing concerns and the clear statement of the PWA that only NRS valves are acceptable, we think that the USAID engineering personnel had a reasonable basis to conclude that NRS valves were necessary to meet the agency’s needs for this project. On that basis, and also considering the clear consensus that a requirement for NRS valves had been intended in pre-solicitation planning, we conclude that the agency had a compelling reason to cancel the BOQ B portion of the IFB.  (Corcel Corporation, B-311332; B-311332.2, June 13, 2008) (pdf)

Although DRG did not submit the lowest bid, the contracting officer selected DRG for contract award on the basis that it had submitted the “best responsive bid” and that DRG’s price was “fair and reasonable.” Id. The contracting officer explained that her decision that DRG had submitted the “best” bid reflected her assessment of “the general quality of [DRG’s] submitted written materials pertaining to [the] solicitation, accomplishing the scope of work, qualifications, [and] experience,” along with the fact that DRG’s bid included a cost breakout identifying the “cost of staff, equipment, supplies and other needs for this project.” Id. The contracting officer further noted that the bid submitted by Upper Mohawk, the lowest priced bidder, “did not contain information about judgment fund expertise or the staff’s qualifications or experience and no cost[] break out was submitted.” Id. A contract was awarded to DRG on August 31. In October, Upper Mohawk filed an agency-level protest complaining that award to DRG was improper for various reasons, including the fact that DRG had not submitted the lowest bid and was not an SDVOSB. AR, Tab 14, Upper Mohawk Agency-level Protest. Thereafter, the agency concluded that award to DRG had been improper and, on November 6, terminated DRG’s contract for the convenience of the government. The agency plans on resoliciting the requirement after correcting material errors in the solicitation. On November 9, DRG filed an agency-level protest; prior to receipt of the agency’s response to that protest, DRG filed this protest with our Office on November 22. DRG complains that termination of its contract was improper for various reasons, including that the agency’s inclusion of the solicitation clause establishing the procurement as an SDVOSB set-aside was “inadvertent” and--while not disputing the fact that it failed to submit the lowest bid--maintains that termination of its contract 2 months after award was “arbitrary and capricious.”  Contracting agencies have broad discretion to take corrective action where they determine that such action is necessary to ensure a fair and impartial competition. Where the agency has a reasonable concern that there were material errors in a procurement, it is well within the agency’s discretion to correct those errors. Alfa Consult S.A., B-298288, B-298164.2, Aug. 3, 2006, 2006 CPD para. 127 at 2; Patriot Contract Servs., LLC, B-278276.11 et al., Sept. 22, 1998, 98-2 CPD para. 77 at 4. Specifically, an agency may resolicit previously competed requirements where the record shows the agency’s decision to take this action is made in good faith. Federal Sec. Sys. Inc., B-281745, Apr. 29, 1999, 99-1 CPD para. 86 at 5.  Here, nothing in the record suggests that the agency’s corrective action was unreasonable, or that the agency acted other than in good faith. Specifically, the contracting officer acknowledges that the solicitation “should not have contained the language” regarding award to the “best” bid or, alternatively, that the solicitation should have been issued as a request for proposals pursuant to the negotiated procurement procedures of FAR Part 15. Further, there can be no dispute that the contracting officer’s selection of DRG’s bid was improperly made on the basis of unstated evaluation factors. Finally, there is no dispute that DRG is not an SDVOSB and therefore is not eligible for award under the SDVOSB set-aside. On this record, we have no basis to question the reasonableness of the agency’s corrective action to revise the solicitation to correct errors which led to the improper award to DRG and to allow all interested parties to compete. (Delaware Resource Group of Oklahoma, LLC, B-299165, February 26, 2007) (pdf)

The PPR states that an IFB may be cancelled after bid opening where cancellation is “clearly in the best interest of the government.” PPR, Chap., XII, sect. 2.1(b). Here, the contracting officer had two principal reasons for concluding that the cancellation was in the government’s best interest: the agency failed to publish the solicitation on FedBizOpps; and the agency failed to solicit two incumbents. As explained below, we think the contracting officer’s decision to cancel the solicitation and, in the resolicitation, to adhere more closely to the policy guidance in the PPR, was reasonable. The PPR provides that contracting officers “shall promote and provide for competition to the maximum extent practicable.” PPR, Chap. VIII, sect. 3.4(a). Under the PPR, the term “maximum extent practicable” is defined to mean that “all responsible sources are permitted to complete.” Id. sect. 3.3. In this case, it clearly was reasonable for the contracting officer to conclude that the failure to publish the IFB on FedBizOpps may have impeded all responsible sources from competing. Compounding that failure, two incumbent contractors were not sent the IFB, also contrary to the policy in the PPR to include previously successful bidders on the bidders list. PPR, Chap. X, sect. 1.1(b)(2). Under these circumstances, it was reasonable for the contracting officer to conclude that cancellation would serve the public’s interest in maximizing competition. Kertzman Contracting, Inc.; Centigrade, Inc.—Entitlement to Costs, supra. In support of their position that the cancellation lacked a compelling basis, the protesters argue first that the grounds cited by the contracting officer reflect GPO policy, not regulations, and that the agency actions not taken were optional, not required. We recognize that some provisions of the PPR describe the procedures to be used in mandatory language, while other provisions are expressed in terms of a policy to be followed. These differences in terminology in the PPR are not dispositive of the propriety of the decision to cancel, however; rather, it is clear that, as discussed above, the PPR directs contracting officers to promote and provide for maximum competition that offers the opportunity for all responsible sources to compete. As discussed above, the record shows that the cancellation here was consistent with that responsibility. The protesters also argue that one of the incumbent contractors not solicited originally failed to take advantage of the opportunity to obtain a copy of the solicitation through a bid subscription service, and that its failure to do so, rather than the agency’s failure to solicit the firm, was the principal reason that the incumbent did not receive a copy of the IFB. This argument does not support the conclusion that the cancellation was improper. The central issue here is whether the agency’s failure to publicize the solicitation and to include two incumbents on the bidders list justifies cancellation of the solicitation in furtherance of the government’s interest in maximizing competition. As explained above, we conclude that it does. We therefore see no basis to question the contracting officer’s decision to cancel the IFB. (Goodway Graphics of Virginia, Inc.; NPC, Inc.; P.A. Hutchison Co., B-297789, March 21, 2006) (pdf)

After reviewing the bids, the contracting officer decided that it was appropriate to cancel the IFB for three reasons.

• First, it was not clear whether bidders were obligated to enter bids for all the unit price items in the attachment. As quoted above, the agency, in response to a bidder's question on this issue, stated that bidders could offer different unit prices if they deemed them "applicable." In contrast, Section 10 of the SF stated that bidders were to "furnish all labor, material, equipment and supervision for the demolition, abatement and chilled water by-pass" for the building. (Emphasis added.) In fact, three of the eight bidders, including the protestor, did not enter unit prices for all the types of materials specified. The contracting officer determined that the price evaluation method called for by the IFB, which added all of the unit prices to arrive at a grand total, did not adequately account for those bids which did not include unit prices for all material types, and therefore provided those bidders a possible price advantage.
   
• Second, the estimated quantity of work for some types of abatement services was substantially overstated due to the way in which the attachment was laid out. For example, the estimated quantity of work for each of the three types of pipe insulation abatement was given as 100, for a total of 300 for all three types, although the actual estimated quantity was 100 for the three types combined. Similar overstatements occurred throughout the attachment. Although each of the bidders was using the same incorrect information, the contracting officer reasoned that the overstated quantities may have produced inaccurate pricing, because bidders' unit pricing would presumably be lower for larger quantities of work.
   
• Finally, the attachment was intended to request pricing information for abatement services at various locations within the building, and the form contained blank spaces for three types of removal which were up to the bidder to define. For example, as set out above, under the category "pipe insulation," the attachment asked bidders to "identify [three] types of material or removal method[s] having different unit costs." Some bidders responded by bidding on different diameter pipes, while others selected different asbestos containment methods. Even bidders who chose to bid on three different pipe diameters did not all choose the same ones. Consequently, the individual unit prices varied significantly among the bidders. For instance, the average low bid for the three types under pipe insulation was $3.10, and the average high bid was $16.83, a difference of over 400 percent. See Protest, Exhibit B. Because GSA had not defined the unit items, but rather left their definition to bidders' discretion, the contracting officer determined that the unit prices provided by each bidder could not reasonably be compared to one another.

We find that the GSA properly canceled the IFB here because it contained numerous ambiguities, as a result of which bidders did not prepare their bids based on a common understanding of the agency's requirements, and prices could not be compared on an equal basis. The ambiguities misled bidders as to the requirement to enter prices for all the unit price items listed, producing lower total bids for the three bidders who did not bid on each of the unit prices. Further, even if every bidder had entered prices for each unit price item, because, in completing the attachment, the IFB left to the bidders' discretion the nature of the work that each bid, the resulting total price for the unit work provided by each of the bidders did not afford the agency a basis on which to accurately compare the bid prices. In addition, as explained above, the way in which the estimated quantities were listed in the attachment was misleading and resulted in a substantial overstatement of the estimates, which in turn likely materially affected the bidders' prices. The record thus shows that the lack of clarity in the attachment resulted in bidders competing on an unequal basis, such that any award based on this IFB would be prejudicial to the remaining bidders and the government. This provides the agency with a compelling reason to cancel the IFB. Neals Janitorial Serv. , B-276625, July 3, 1997, 97-2 CPD paragraph 6 at 5. (Dynamic Corporation, B-296366, June 29, 2005) (pdf)

A contracting agency has the right to cancel a solicitation when sufficient funds are not available regardless of any disputes concerning the validity of the IGE, National Projects, Inc., B-283887, Jan. 19, 2000, 2000 CPD ¶ 16 at 4; J. Morris & Assocs., Inc., B-256840, July 27, 1994, 94-2 CPD ¶ 47 at 2 n.1, as agencies cannot create obligations that exceed available funds. Further, the VA is precluded by law from obligating or expending funds in excess of $4 million total for any medical facility project without express Congressional approval. See 38 U.S.C. §§ 8101 et seq. (2000). Since the VA previously had obligated $366,228 for the design aspect of the project here, the contracting officer could not have made contract award to First Enterprise after the withdrawal of Ace's bid, even if it had sought to obtain additional funds. Accordingly, the VA's decision to cancel the IFB after determining that all bids not withdrawn exceeded available funding was proper. (First Enterprise, B-292967, January 7, 2004)  (pdf)

A contracting agency must have a compelling reason to cancel an IFB after bid opening because of the potential adverse impact on the competitive bidding system of resolicitation after bid prices have been exposed. FAR § 14.404-1(a)(1); HDL Research Lab, Inc., B-254863.3, May 9, 1994, 94-1 CPD ¶ 298 at 5. Where a solicitation contains inadequate or ambiguous specifications, or otherwise does not contain specifications that reflect the agency's actual needs, the agency has sufficient reason to cancel. FAR § 14.404-1(c)(1); Days Inn Marina, B-254913, Jan. 18, 1994, 94-1 CPD ¶ 23 at 2. Contracting officials have broad discretion to determine whether a compelling reason to cancel exists, and our review is limited to considering the reasonableness of their decision. Chenega Mgmt., LLC, B-290598, Aug. 8, 2002, 2002 CPD ¶ 143 at 2. Our review of the record here shows that the FHWA reasonably concluded that it had a compelling reason to cancel the solicitation because it both included ambiguous specifications and failed to reflect the agency's actual needs.  (Brickwood Contractors, Inc., B-292171, June 3, 2003) (pdf)

Here, we find that the Army reasonably concluded that it had a compelling reason to cancel the IFB after bid opening. The IFB contained conflicting terms with respect to the contract performance period, which is a material solicitation requirement. See The Ryan Co., B-275304, Feb. 6, 1997, 97-1 CPD ¶ 62 at 3 n.1. The bid schedule stated that the performance period would expire January 31, 2003 (which was only 3 months after the October 23 bid opening date), but the IFB stated in other clauses that the period of performance would be 12 months from the date of award. The IFB also incorporated by reference the standard “Order of Precedence--Sealed Bidding” clause, FAR § 52-214-29, which provides that solicitation inconsistency are to be resolved by giving precedence in the following order: (1) bid schedule; (2) representations and instructions; (3) contract clauses; (4) other documents, exhibits and attachments; and (5) specifications. Application of the Order of Precedence clause indicates that, as argued by the Army, any contract awarded under the IFB would have expired on January 31, 2003.  (Paragon Van Lines, Inc, B-291820.2; B-291913, April 8, 2003)

We conclude that MARAD reasonably determined that the bunkering requirement could not be met as it intended--by barge, within a 4-hour transit time to the layberth-and, therefore, that the agency had a compelling reason to cancel the IFB. See Champion Structure Co., B?198863, Oct. 17, 1980, 80-2 CPD ¶ 291 at 2 (cancellation proper where award would result in a contract impossible to perform).  (Chenega Management, LLC, B-290598, August 8, 2002)  (pdf)

Where prior to issuing a solicitation on an unrestricted basis, an agency fails to investigate whether the conditions requisite to a set-aside under the JWOD Act or for a category of small business may be expected, cancellation is clearly in the public interest if the agency subsequently determines that the solicitation should have been set aside. Ryon, Inc., B-256752.2, Oct. 27, 1994, 94-2 CPD para. 163 at 4 (cancellation even after bid opening was proper where agency erroneously determined initially not to set procurement aside for small business).  (Diversified Management Group, A Joint Venture, B-288443.2, October 12, 2001)

Upon learning that the IFB should have incorporated FAR sect. 52.219-14, requiring the contractor to perform at least 15 percent of the cost of the contract with its own employees, rather than FAR sect. 52.236-1 as completed by the Corps, requiring the contractor to perform 60 percent of the total amount of work with its own organization, the contracting officer determined that the IFB should be canceled.

Here, the record shows that at least one potential bidder was dissuaded from submitting a bid in response to the solicitation by the requirement that the contractor perform at least 60 percent of the work with its own organization, [3] and we think that the agency could reasonably have surmised that other prospective bidders were likewise dissuaded, given that more than 50 contractors requested plans and specifications for the solicitation, but only 3 submitted bids. Agency Report, Apr. 21, 2000, at 7. Under such circumstances, we think that the agency reasonably determined that resolicitation would result in enhanced competition and, accordingly, that cancellation was in the public's interest.  (Hroma Corporation, B-285053, June 6, 2000)

Even if the government estimate is adjusted upward to $3.9 million or $4.3 million as asserted by the protester, Overstreet's bid is still 18 percent to 8.6 percent higher than the government estimate. Since a contracting officer may reject a bid as unreasonably priced when the bid exceeds the government estimate by as little at 7.2 percent, we see no basis to object to the contracting officer's determination of price unreasonableness. See Atkinson Dredging Co. Inc.--Recon., supra, at 2; Building Maintenance Specialists, Inc., B-186441, Sept. 10, 1976, 76-2 CPD para. 233 at 4.  (Overstreet Electric Company, Inc., B-284691, May 12, 2000)

A contracting agency has the right to cancel a solicitation when sufficient funds are not available, regardless of any disputes concerning the validity of the IGE or the reasonableness of the low responsive bid price. J. Morris & Assocs., Inc., B-256840, July 27, 1994, 94-2 CPD para. 47 at 2 n.1; Armed Forces Sports Officials, Inc., B-251409, Mar. 23, 1993, 93-1 CPD para. 261 at 2-3, recon. denied, B-251409.2, May 24, 1993, 93-1 CPD para. 402. We therefore conclude that the agency had a compelling reason to reject all bids and to cancel the solicitation.  (National Projects, Inc., B-283887, January 19, 2000)

We have long held that, where a solicitation's quantity estimates are found to be erroneous, it is generally improper for the contracting agency to reevaluate existing bids based on corrected estimates that are substantially different from those that formed the basis of the bidders' competition. See, e.g., Edward B. Friel, Inc., B-183381, Sept. 22, 1975, 75-2 CPD para. 164 at 10. Here, the error in the quantity estimate for item No. 35 is so large that there is no way to predict the impact that correcting it may have on the prices bid for that or other items being procured. Accordingly, instead of making an award in these circumstances, the agency should have resolicited the procurement on the basis of its best estimate of its actual requirements. While we recognize the potential adverse impact on the competitive bidding system of resoliciting after prices have been exposed, here a compelling reason for doing so exists, since the IFB substantially overstates the anticipated needs of the government. See Deere & Co., B-241413.2, Mar. 1, 1991, 91-1 CPD para. 231 at 2.  (Mallinckrodt Inc., B-282902, September 10, 1999)

The agency canceled the IFB only after it determined that both Poerio's and Massaro's varying interpretations of the IFB's pricing terms were reasonable. Since we have determined that Massaro's interpretation was not reasonable, and that the IFB was not ambiguous, we conclude that the VA did not have a compelling reason to cancel the IFB after bids had been exposed.  (Massaro Company; Poerio Inc., B-280772.2; B-280772.3, December 4, 1998)