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NDA protests the agency’s “gross mismanagement” of the
solicitation and “contract irregularities.” Protest at 1.
Specifically, NDA argues that the cancellation of the
solicitation and the award of a task order to BAH for a budget
courses instructor were “improper.” Protest at 1; Comments at 3.
NDA requests the agency terminate the contract with BAH and
award a contract to small business offerors for that work. Id.
In a negotiated procurement, a
contracting agency has broad discretion in deciding whether to
cancel a solicitation, and need only establish a reasonable
basis for doing so. Trujillo/AHW, JV, B-403958.4, Oct. 13, 2011,
2011 CPD ¶ 218 at 3; USA Elecs., B-283269.2, Oct. 5, 1999, 99-2
CPD ¶ 67 at 3. A reasonable basis to cancel exists when, for
example, an agency determines that a solicitation does not
accurately reflect its needs, Logistics Solutions Group, Inc.,
B-294604.7, B-294604.8, July 28, 2005, 2005 CPD ¶ 141 at 3, or
where the agency determines that it no longer has a requirement
for the item solicited. Peterson-Nunez Joint Venture, B-258788,
Feb. 13, 1995, 95-1 CPD ¶ 73 at 4. Moreover, an agency may
cancel a solicitation no matter when the information
precipitating the cancellation first arises, even if it is not
until proposals have been submitted and evaluated. Brian X.
Scott, B-310970, B-310970.2, Mar. 26, 2008, 2008 CPD ¶ 59 at 3.
Here, the agency’s decision to
cancel the solicitation was reasonable. The DIA mistakenly
included in the RFP the SOW seeking an instructor to teach
budget courses, and that requirement had already been met under
a previously issued task order to BAH. Consequently, the agency
no longer had a requirement for the work being solicited.
Instead, the college needed an instructor with “vastly different
education, experience, and subject matter qualifications” to
teach cyber courses. AR at 3. In this regard, replacing the SOW
was so substantial a change that it exceeded what potential
offerors could have anticipated. See Federal Acquisition
Regulation § 15.206(e). Indeed, the protester acknowledged the
“dramatic change” and “substantial difference” between the two
SOWs and advocated canceling the RFP. Comments at 3; Protest,
Tab D, NDA Draft Protest Letter, at 1. Thus, on the record
before us where the solicitation did not accurately reflect the
agency’s needs, we find reasonable the agency’s decision to
cancel the RFP. (National
Defense Advisors, Inc., B-405741, December 13, 2011) (pdf)
The protester contends that the agency's decision to cancel the
RFP was unreasonable. The protester also argues that it was
unreasonable for the agency to compare the offerors' prices to
the government estimate or the prior contract price because the
agency did not offer a site visit and did not set forth
facilities requirements in the RFP. Comments at 1. Therefore,
the protester claims, offerors were lead to believe that only
one facility, owned by National Aviation Services (NAS) could be
used. Id.
A procuring agency has broad authority to cancel a solicitation
issued under negotiated procedures and need only establish a
reasonable basis for cancellation. Bahan Dennis, Inc.,
B-249496.3, Mar. 3, 1994, 94-1 CPD para. 184 at 3. If an agency
cannot purchase at a "fair and reasonable" price, as required by
the FAR, then cancellation is warranted. Id.; see FAR
sect.15.402 (price must be "fair and reasonable"). A
determination of price reasonableness is a matter of agency
discretion, involving the exercise of business judgment, which
our Office will not question unless it is shown to be
unreasonable. Selecta Corp., B‑252182, May 26, 1993, 93-1 CPD
para. 421 at 2; Sletager, Inc., B-240789.6, Oct. 11, 1991, 91-2
CPD para. 328 at 2. In determining price reasonableness, an
agency may consider a number of factors, including prior
contract history and the government estimate. Vitronics, Inc.,
B-237249, Jan. 16, 1990, 90-1 CPD para. 57 at 2; see FAR
sect.15.404-1(b). In this regard, we have found cancellations
proper where the protester's price exceeded the government
estimate by as little as 7.2 percent. Nutech Laundry & Textiles,
Inc., B‑291739, Feb. 10, 2003, 2003 CPDpara. 34 at 4 (citing
Building Maint. Specialists, Inc., B‑186441, Sept. 10, 1976,
76-2 CPD para. 233 at 4).
Based upon our review of the record, there is no basis to find
unreasonable the Air Force's determination that none of the
prices were fair and reasonable. As noted above, the agency
compared the offerors' prices to the government estimate and the
prior contract price. Given that the lowest proposed price
exceeded the government estimate by a significant amount, we
think the agency could reasonably conclude that the offered
prices were not reasonable and that the offerors did not clearly
understand the requirements of the RFP. (Trade
Links General Trading and Contracting, WLL, B-405182,
September 1, 2011) (pdf)
First, KNAPP argues that VA should not have cancelled the
solicitation, and should have instead awarded it the contract as
the lowest-priced, technically acceptable offeror. Protest
(B-404887.2) at 1-2. For the reasons discussed below, we
conclude that the agency's corrective action was reasonable.
Contracting officers in negotiated procurements have broad
discretion to take corrective action where the agency determines
that such action is necessary to ensure a fair and impartial
competition. Domain Name Alliance Registry, B-310803.2, Aug. 18,
2008, 2008 CPD para. 168 at 8. As a general matter, the details
of corrective action taken in response to a protest are within
the sound discretion and judgment of the contracting agency.
Rockwell Elec. Commerce Corp., B-286201.6, Aug. 30, 2001, 2001
CPD para. 162 at 4. We generally will not object to the specific
corrective action, so long as it is appropriate to remedy the
concern that caused the agency to take corrective action.
Networks Elec. Corp., B-290666.3, Sept. 30, 2002, 2002 CPD para.
173 at 3.
As discussed above, the agency stated that it would take
corrective action by canceling the award to R/X and issuing a
new solicitation. In response to the instant protest and request
for costs, VA has provided additional information concerning its
rationale for opting to cancel and resolicit. First, the agency
concluded that R/X's proposal had improperly taken exception to
the solicitation with regard to the payment terms. Agency
Response to Request for Costs, June 3, 2011, at 3. For this
reason, the agency contends that it properly took corrective
action and terminated R/X's contract. Id. at 4. Second, the
agency states that it concluded that cancellation of the
solicitation was necessary because the agency intends to add
additional requirements to the TCA system. Agency Response to
Protest B-404887.2, May 26, 2011, at 2; Agency Response to
Protest B-404887.2, June 15, 2011, at 1-2. In this regard, VA
states that the agency currently uses a manual mail packaging
system, and it intends to add the following additional
requirements to the TCA procurement:
The new solicitation will
encompass a fully automated packaging system that conveys
completed prescription bottles directly from dispensing
automation, prints, folds and inserts requisite patient
literature and the prescription bottle into a pouch that meets
the requirements of the [U.S.] Postal System for prescription
mailing.
Agency Response to Protest
B-404887.2, June 15, 2011, at 1.
In a negotiated procurement such as this one, a contracting
agency has broad discretion in deciding whether to cancel a
solicitation, and need only establish a reasonable basis for
doing so. Applied Resources, Inc., B-400144.7, B-400144.8, July
31, 2009, 2009 CPD para. 161 at 2. A reasonable basis to cancel
exists when, for example, an agency determines that a
solicitation does not accurately reflect its needs, or where
there is a material increase in the services needed to satisfy
the agency's requirements; in such cases, cancellation of the
solicitation and issuance of a revised solicitation is
appropriate. Logistics Solutions Group., Inc., B-294604.7,
B-294604.8, July 28, 2005, 2005 CPD para. 141 at 3.
Here, we think that VA's basis for
canceling the solicitation was reasonable. In this regard, the
corrective action addressed the protest argument that award to
R/X was improper. Furthermore, the corrective action was based
on the agency's determination that new requirements will require
the agency to issue a revised solicitation and obtain new
proposals, which precludes award to KNAPP based on its existing
proposal. On this record, we conclude that VA's corrective
action was reasonable. (KNAPP
Logistics Automation, Inc.--Protest and Costs, B-404887.2;
B-404887.3, July 27, 2011) (pdf)
KGL asserts that the agency's actual reason for canceling the
solicitation is KGL's refusal to provide certified cost and
pricing data. According to the protester, the agency's position
that cancellation is warranted by the alleged uncertainty
relating to DLA's requirements in the region is a pretext
because the rationale was provided only after KGL had raised the
possibility of protesting the request for certified cost and
pricing data. The protester further asserts that the agency has
a continuing need for the services. KGL requests that we
recommend that the solicitation be reinstated and award made to
it, or, in the alternative, that we recommend that it be
reimbursed the costs of preparing its proposal, including the
costs it incurred to acquire the material handling equipment.
We find no merit to KGL's protest. In a negotiated procurement,
a contracting agency has broad discretion in deciding whether to
cancel a solicitation and need only establish a reasonable basis
for doing so. ESM Group, Inc., B-400298.2, Oct. 14, 2008, 2008
CPD para. 190 at 2. Moreover, even if an initial justification
is unreasonable, that fact is immaterial, provided that another,
proper, basis for the cancellation exists. Sunshine Kids Serv.
Supply Co., B-292141, June 2, 2003, 2003 CPD para. 119 at 2.
Here, we find that the uncertainty surrounding the future need
for the services provided a reasonable basis upon which to
cancel the solicitation. In this respect, the record includes an
affidavit prepared by DLA's Deputy Director of Logistics
Operations in which he states:
I spoke with . . . [the] Director
of Logistics, Third Army and the US Army Central Command (ARCENT)
G4 and the Army Materiel Command Southwest Asia Commanding
General Kuwait. [The Third Army Director of Logistics] discussed
the Army's drawdown in Iraq and its relation to the Army's need
for [the current requirement]. [The director of Logistics, Third
Army ] indicated that there might not be a continuing need for
[the services] beyond mid 2011 and that potentially all the
remaining . . . stock could be moved to Army warehouses on Camp
Arifjan in Kuwait.
* * * * *
I also reviewed data that
indicates [the solicited] workload had been shrinking and that
its current storage utilization had declined over the past
several months to about 51 percent capacity and the need would
be lower in future years.
* * * * *
At the same time, DLA and the
military services were aware of the mission risks and extensive
costs that would be incurred to move the [agency's] inventory to
the KGL location, and taking those risks and incurring those
costs might not make sense if the solicited requirement] will
close or be substantially downsized soon after the move.
Affidavit of DLA's Deputy Director
of Logistics Operations, at 1-2.
As noted by KGL, the record shows that the agency requires the
solicited services in the near term. However, the protester has
not shown, nor does the record indicate, that the agency's
stated concern as to nature and extent of its longer term needs
was unreasonable. On the contrary, the record clearly indicates
the existence of considerable uncertainty regarding the agency's
future needs. Cancellation is appropriate where an agency
conducts a reassessment that suggests the solicitation may not
reflect its needs, such that the agency is uncertain whether the
requirement will exist in the future. Global Solutions Network,
B-299424, Apr. 20, 2007, 2007 CPD para. 76 at 2. In these
circumstances, we find no basis to question the agency's
decision to cancel the solicitation rather than enter into a new
long-term contract. (KGL Logistics,
B-404340, January 26, 2011) (pdf)
PSC contends that DLA's rationale for canceling the two RFQs was
a pretext to avoid these protests. PSC makes a number of
arguments in support of its position, all of which we have fully
considered, although we only address PSC's primary arguments in
this decision.
Contracting officials in negotiated procurements have broad
discretion to take corrective action where the agency determines
that such action is necessary to ensure fair and impartial
competition. Major Contracting Servs., Inc., B-400737.2, Dec.
17, 2008, 2008 CPD para. 230 at 2. Where, as here, a protester
alleges that an agency's rationale for cancellation is but a
pretext to avoid resolving a protest, we review the agency's
rationale to ensure that the agency has a reasonable basis for
the cancellation. See Superlative Techs., Inc., B-310489,
B-310489.2, Jan. 4, 2008, 2008 CPD para. 12 at 7.
DLA explains that, as a result of PSC's protests, the agency
began a review of the methodology it used to evaluate
quotations, and realized that the RFQ did not adequately advise
offerors as to how past performance would be evaluated. AR at 8.
DLA further explained that it would resolicit the procurement
after its review was complete. Id.
It is fundamental that vendors should be advised of the basis on
which their quotations will be evaluated. See C3, Inc.,
B‑241983.2, Mar. 13, 1991, 91‑1 CPD para. 279 at 3 (involving
proposals). The Competition in Contracting Act of 1984, 10 U.S.C.
sections 2305(a)(2)(A)(i) and (ii) (2006), requires contracting
agencies to set forth in a solicitation all significant
evaluation factors and their relative importance. Id. Here, DLA
recognized as a result of PSC's protest that the RFQs did not
clearly state the evaluation criteria pertaining to past
performance. In this regard, DLA in recent weeks has issued
multiple solicitations for lumber that contain detailed
evaluation criteria for past performance. See, e.g., RFQ ‑0251
at 3; RFQ ‑0246 at 3; RFQ -0306 at 3. Specifically, the new
evaluation criteria state:
The past performance evaluation
will include a consideration of the following:
1. Failure to deliver by the required delivery date,
2. Number of late orders partially delivered (per order),
3. Contractor requested purchase order cancellations,
4. Quality issues or rejected material, and
5. Missed or late appointment times at the depot or missed or
late container pickups (any appointment change not coordinated
four (4) working days prior to the original appointment time
will be considered a late/missed appointment).
Id. Correcting this error to allow
for a fair and equal competition provides a reasonable basis for
canceling the solicitations. Accordingly, we do not find that
the agency's cancellation of the RFQs was a pretext to avoid our
review. (Progressive Services
Corporation, B-404183; B-404251.2, January 11, 2011) (pdf)
Greentree contends that the Army should not have cancelled the
solicitation. In response, the Army explains that the
solicitation did not identify all of significant evaluation
factors and their relative importance, which rendered the
solicitation defective. AR at 2-3. The Army further explains
that it found that the record did not contain any
contemporaneous documentation of the rationale for making award
to Greentree. Id. at 3. Greentree argues that the transportation
officer should have documented the evaluation of the proposals,
rather than canceling the solicitation.
Contracting officials in negotiated procurements have broad
discretion to take corrective action where the agency determines
that such action is necessary to ensure fair and impartial
competition. Major Contracting Servs., Inc., B-400737.2, Dec.
17, 2008, 2008 CPD para. 230 at 2. Moreover, it is fundamental
that offerors should be advised of the basis on which their
proposals will be evaluated. C3, Inc., B‑241983, B‑241983.2,
Mar. 13, 1991, 91‑1 CPD para. 279 at 3. The Competition in
Contracting Act of 1984, 10 U.S.C. sections 2305(a)(2)(A)(i) and
(ii) (2006), requires contracting agencies to set forth in a
solicitation all significant evaluation factors and their
relative importance. Id.
Here, the Army identified not only an issue with the
documentation of the best value determination, but also a
problem with the evaluation criteria in the solicitation. The
solicitation stated that the factors were "based on but not
limited to" the listed evaluation factors. This is inconsistent
with the fundamental requirement that offerors be informed of
all the significant evaluation factors and their relative
importance. Correcting this error to allow for a fair and equal
competition provides a reasonable basis for canceling the
solicitation. As a general rule, in a negotiated procurement the
contracting agency need only demonstrate a reasonable basis to
cancel a solicitation after receipt of proposals. Rand & Jones
Enters. Co., Inc., B‑296483, Aug. 4, 2005, 2005 CPD para. 142 at
3.
The protest is denied. (Greentree
Transportation Company, Inc., B-403556.2, December 7, 2010)
(pdf)
ASI argues that, because CAMSS's quotation was technically
unacceptable, the agency should have issued an order to ASI (as
the firm with the lowest-priced, technically acceptable
quotation) for the items that had not yet been delivered. In
this regard, ASI contends that a recompetition would delay
delivery of these "urgently needed" items and improperly provide
CAMSS with a "second chance" to submit a technically acceptable
quotation. Protester's Comments at 8.
The agency responds that, in reviewing ASI's earlier protest, it
concluded that the salient characteristics identified in the
solicitation materially overstated the agency's requirements by
specifying ASI's brand name products. The agency also states
that the CAMSS products that were shipped prior to the issuance
of the stop work order were found to satisfy the agency's needs.
Contracting Officer's Statement at 2. The agency contends that
recompeting the remainder of its requirements under
specifications that reflect the agency's actual minimum needs
will increase competition and ensure that the agency receives
the lowest possible price. Id.
In negotiated procurements, agencies have broad discretion to
take corrective action where they determine that such action is
necessary to ensure fair and impartial competition. See MayaTech
Corp., B-400491.4, B-400491.5, Feb. 25, 2009, 2009 CPD para. 55
at 3; Domain Name Alliance Registry, B-310803.2, Aug. 18, 2008,
2008 CPD para. 168 at 8. We will not object to the specific
corrective action, so long as it is appropriate to remedy the
concern that caused the agency to take corrective action.
Networks Elec. Corp., B-290666.3, Sept. 30, 2002, 2002 CPD para.
173 at 3. In this regard, we have found unobjectionable an
agency's cancellation of a negotiated procurement after
receiving proposals where the agency determined that the
solicitation overstated the agency's requirements and the agency
would seek enhanced competition by relaxing its requirements.
See Robertson Leasing Corp., B-275152, Jan. 27, 1997, 97-1 CPD
para. 49 at 3-4.
We find reasonable the agency's decision to relax its
requirements to seek enhanced competition for the remaining
items. Although ASI concludes that the agency has not proven
that its needs will be met by the relaxed efforts, the fact that
the agency has evaluated its needs, found that the awardee's
products would meet its needs, and further determined that the
awardee's products were not compliant with the solicitation's
salient characteristics, is sufficient to demonstrate the
reasonableness of the agency's actions here. Moreover, where, as
here, an agency determines that a relaxed specification will
both meet its needs and afford enhanced competition for the
goods or services being acquired, we will not object to the
relaxation. See Virginia Elec. and Power Co; Baltimore Gas &
Elec. Co., B‑285209, B‑285209.2, Aug. 2, 2000, 2000 CPD para.
134 at 7-8 (the role of our Office in reviewing bid protests is
to ensure that the statutory requirements for full and open
competition are met, not to protect any interest a protester may
have in more restrictive specifications). (Alaska
Structures, Inc., B-402648.3, August 10, 2010) (pdf)
Platinum Services asserts that the
cancellations here were unreasonable because there is no basis
for concluding that the solicitations as amended (and the
resulting contracts) did not accurately reflect the agency's
needs, or otherwise confused offerors. We disagree.
A procuring agency has broad authority to cancel an RFP, and
needs only a reasonable basis to do so. A-Tek, Inc., B-286967,
Mar. 22, 2001, 2001 CPD para. 57 at 2. Such a reasonable basis
exists where a solicitation does not present a reasonably
accurate representation of the agency's anticipated actual
needs. Lederle-Praxis Biologicals Div., Am. Cyanamid Corp.,
B‑257104 et al., Aug. 22, 1994, 94-2 CPD para. 205 at 5.
Further, where a valid basis for cancellation exists, an agency
properly may cancel a solicitation no matter when the
information precipitating the cancellation first surfaces or
should have been known. Daston Corp., B-292583, B-292583.2, Oct.
20, 2003, 2003 CPD para. 193 at 3.
It is clear from the record that the solicitations, even as
amended, did not present a reasonably accurate representation of
the agency's anticipated actual needs. In this regard,
Platinum's assertion that the cancellations were improper
because amendment 5 corrected the original errors in the
estimates ignores the fact that the agency received revised
estimates in April 2010 showing that the amendment 5 estimates
on which offers and the awards were based were substantially
overstated. As reported by the contracting officer, amendment 5
"published estimated acceptable daily weight capabilities that
were grossly overestimated." AR, CO Statement at 3. Further, the
determination that the amendment 5 estimates were materially
overstated is supported not only by the April revised estimates,
which were substantially lower than the amendment 5 estimates on
which the awards were based, but also by the "actual" weights
provided by the CO in her August 24 supplemental statement,
which likewise are substantially lower than the amendment 5
estimates. AR, CO Supplemental Statement, Aug. 24, 2010, at 3.
Since the risks associated with a variance between actual and
estimated purchase quantities are borne by the contractor, the
government is obligated to use its best information in preparing
quantity estimates so that offerors can appropriately assess and
apportion risk and other contract performance costs into their
prices. Where award is made on the basis of estimates that vary
significantly from the agency's actual requirements, the
contractor is in the untenable position of performing contract
work of a magnitude significantly different from the solicited
work, posing a risk to both the contractor and the government
that the contractor will be unable to perform as required. News
Printing, Inc., B-274773.2, Feb. 11, 1997, 97-1 CPD para. 68 at
3. Here, we conclude that the significantly overstated estimates
in amendment 5 provided a reasonable basis for cancellation.
Noting that the agency has determined that even the April 2010
estimates are flawed, Platinum questions whether the revised
solicitations will have estimates better than those contained in
amendment 5. This concern is premature since the agency has not
yet issued a revised solicitation. Norfolk Shipbuilding and
Drydock Corp., B‑219988, B-219988.3, Dec. 16, 1985, 85-2 CPD
para. 667 at 3. (Platinum
Services Inc., B-402718.2; B-402923, August 27, 2010) (pdf)
JER recognizes that in a negotiated procurement, an agency may
cancel an existing solicitation where it has a reasonable basis
for doing so, see, e.g., Blue Rock Structures, Inc., B-400811,
Jan. 23, 2009, 2009 CPD para. 26 at 2, but argues that the
agency lacked a reasonable basis for its decision to cancel
here. The protester contends that the agency decided to cancel
after it became apparent that Lincoln would be unable to perform
and that award to the next-in-line offeror, i.e., JER, would
therefore be required. The protester maintains that GSA sought
to avoid awarding it a lease because EPA did not want to move
into its proposed building, despite the fact that its offered
space meets all of the SFO's stated requirements.
In response, the agency maintains that JER's offer was
ineligible for award because the protester's proposed building
failed to meet critical solicitation requirements. Specifically,
the agency asserts that the offer failed to demonstrate
compliance with the guidance in the SFO that "space within the
ceiling cavity should be sufficient (in no case less than 18")
to provide ample room for the necessary services without the
need for bulkheads or beam breaks," SFO at 41, and with the
requirement in the POR that no occupiable floor space be more
than 50 feet from perimeter windows.
As noted above, the agency failed to produce a technical
evaluation report endorsed by the evaluation panel members in
its response to the protest here; thus, the record lacks
documentation as to the technical evaluation panel's conclusions
regarding strengths, weaknesses, deficiencies, or risks in the
protester's offer. Moreover, none of the versions of the
technical evaluation report produced by the agency, or the SSA's
source selection decision, includes a finding that the
protester's offer had been determined technically unacceptable.
That is, while all versions of the report include findings of
noncompliance with the guidance pertaining to required space in
the ceiling cavity, in none is it indicated that the
noncompliance rendered the offer technically unacceptable; on
the contrary, in all versions of the report, the protester's
offer was assigned a score of [deleted], corresponding to a
rating of [deleted], under the building design/systems
evaluation factor. Likewise, while the SSA found that the
protester had failed to comply with the guidance pertaining to
the ceiling cavity and that this posed a risk to the government,
he did not find that JER's offer was technically unacceptable as
a result; his rationale for selecting Lincoln for award was that
its proposal was superior to the proposals of the other offerors,
not that Lincoln had offered the only acceptable proposal. AR,
Exh. 10, SSA Decision, Nov. 23, 2009, at 15. In sum, the record
here does not establish that either the technical evaluators or
the SSA considered the protester's proposal to be technically
unacceptable and thus ineligible for award.
We turn then to the agency's second justification for canceling
and resoliciting--i.e., that there has been a recent increase in
the inventory of buildings available for rental in San
Francisco, and, as a result, the agency can expect to receive
offers for space [deleted] at lower rates than the rate proposed
by Lincoln. We have reviewed the "market research" relied on by
the contracting officer in reaching the foregoing conclusion,
and fail to see how it supports a finding that offers of space
comparable in quality to the Lincoln building at rates in the
[deleted] may be anticipated. In addition, while we have
recognized that the potential for cost savings provides a
reasonable basis for cancellation, RN Expertise, Inc., B-401020,
Mar. 27, 2009, 2009 CPD para. 63 at 4, GSA has not
established--or even conjectured--that it will receive prices
more favorable than the protester's if it resolicits; its
position is simply that it can expect to receive prices more
favorable than Lincoln's.
In our view, the record fails to demonstrate that the agency had
a reasonable basis for canceling the SFO. We recommend that the
agency reinstate the cancelled solicitation and proceed with the
source selection process, which process, we recognize, may
include further consideration of the technical acceptability of
the offers, in light of the concerns expressed by the agency in
response to the protest regarding, in particular, the
protester's compliance with the ceiling cavity and window
distance specifications. We also recommend that JER be
reimbursed the reasonable costs of filing and pursuing the
protest, including reasonable attorneys' fees. 4 C.F.R. sect.
21.8(d)(1) (2010). The protester's certified claim for costs,
detailing the time spent and the costs incurred, must be
submitted to the agency within 60 days after receipt of this
decision.
The protest is sustained. (JER
370 Third Street, LLC, B-402025.2; B-402541, June 1, 2010) (pdf)
KAES asserts that the cancellation was improper. In a negotiated
procurement, a contracting agency has broad discretion in
deciding whether to cancel a solicitation, and need only
establish a reasonable basis for doing so. USA Elecs.,
B-283269.2, Oct. 5, 1999, 99-2 CPD para. 67 at 3. A reasonable
basis to cancel exists when, for example, an agency determines
that a solicitation does not accurately reflect its needs.
Logistics Solutions Group, Inc., B-294604.7, B-294604.8, July
28, 2005, 2005 CPD para. 141 at 3 n.1.
FEMA has set forth a facially reasonable basis for
cancellation--that its technical needs have changed, increasing
beyond what the contract award would have provided, and that the
statement of work (SOW) also no longer reflects the government's
needs. KAES does not dispute the agency's specific factual
assertions regarding the cancellation; that is, it does not
assert that the agency's needs have not changed or that the
original SOW will meet the agency's needs. Thus, there is no
basis for us to question the agency's justification for the
cancellation, and since cancellation of an RFP is permissible
where the agency's needs have changed, we have no basis to
object to the cancellation here.
KAES asserts that the cancellation decision lacked credibility
and was a "pretext" to avoid having to make award to KAES and to
"avoid resolution of the protest." Protest at 3-4. Procurement
authorities are presumed to act in good faith, however, and in
order for our Office to conclude otherwise, the record must show
that procuring officials intended to injure the protester. Cycad
Corp., B-255870, Apr. 12, 1994, 94-1 CPD para. 253 at 5. The
protester's general assertion of bad faith notwithstanding,
there is no evidence of such intent here. KAES cites the timing
of the cancellation--it followed shortly the December 8
conference--as evidence of bad faith. However, since a
solicitation properly may be canceled whenever the information
precipitating the cancellation first surfaces or should have
been known, Daston Corp., B-292583, B‑292583.2, Oct. 20, 2003,
2003 CPD para. 193 at 3, the timing of the cancellation, by
itself, in no way evidences agency bad faith.
KAES asserts that it will be prejudiced by the cancellation
because its prices presumably have been exposed. However, there
is no evidence or reason to believe that KAES's prices have been
exposed. There also is no indication that KAES was otherwise
prejudiced by the cancellation to an extent greater than other
offerors. As discussed at the December 8 ADR conference, if the
protest were sustained on the issue identified by GAO--exclusion
of KAES's proposal from the competitive range without
consideration of its price--the probable recommended corrective
action would have been for the agency to reassess KAES's
exclusion considering price. Thus, there was no assurance that
KAES would have been included in the competitive range but for
the cancellation, and there certainly is no basis to assume that
it would have had a greater chance of receiving the award than
other offerors.
KAES asserts that the cancellation is inconsistent with the
corrective action recommended by GAO during the ADR conference.
However, the GAO attorney did not recommend corrective action at
the conference; rather, he advised the parties of the likely
recommendation if we issued a decision sustaining the protest.
In any case, even had the GAO attorney provided such a
recommendation, that would not have precluded the agency from
canceling the RFP upon subsequently determining--properly, we
have found--that the RFP did not meet its current needs. We
conclude that there is no basis for us to object to the
cancellation of the RFP. (KAES
Enterprises, LLC--Protest and Costs, B-402050.4, February
12, 2010) (pdf)
On August 20, before the due date for receipt of proposals, the
agency canceled the RFP. The cancellation notice stated that
cancellation was “due to the unresolved issues attending parity
of small business programs, and conflicting guidance from GAO
[Government Accountability Office] and OMB [Office of Management
and Budget] regarding priority of the HUBZone program relative
to SBA’s [Small Business Administration’s] 8(a) Business
Development Program.” Agency Report at 1; RFP amend. 5.
In this regard, as noted by the agency, our Office has
interpreted the applicable statutes authorizing the HUBZone and
8(a) programs to require an agency to set aside a solicitation
for HUBZone small business concerns where the standards of that
program are satisfied prior to setting aside the solicitation
for 8(a) small business concerns. As stated in our decisions,
the plain language of the statute authorizing the HUBZone
program is mandatory and requires that an agency set aside a
procurement when certain criteria are met, whereas the plain
language of the authorizing statute for the 8(a) program leaves
the agency with discretion to set aside the procurement. See
Mission Critical Solutions, B-401057, May 4, 2009, 2009 CPD para.
93 at 3-8, recon. denied, Small Business Admin.--Recon.,
B‑401057.2, July 6, 2009, 2009 CPD para. 148 at 5. In contrast,
the SBA has taken the position that all small business programs
are co‑equal in status and one does not take priority over
another--that is, the SBA asserts that there is “parity” in the
programs.
On July 10, OMB advised agencies that the Executive Branch
(through the Department of Justice (DOJ)) was undertaking a
“review of the legal basis underlying the GAO’s decisions.” OMB
reminded agencies that GAO decisions “are not binding on Federal
agencies,” and stated that our decisions in this area “are
contrary to regulations promulgated by the [SBA] that provide
for ‘parity’ among . . . small business programs.” OMB directed
that agencies “should not, as a result of GAO’s decisions, be
compelled to prioritize HUBZone small businesses over [other
small business programs].” OMB Memorandum, July 10, 2009, at
1-2.
On August 21, DOJ issued a “Memorandum Opinion” stating that it
disagreed with GAO’s decisions and concluded that the Small
Business Act “does not compel SBA to prioritize the HUBZone
Program in the manner GAO determined to be required.” DOJ
Memorandum Opinion, Aug. 21, 2009, at 2. DOJ instructed that
“the SBA’s regulations . . . are reasonable [and are] binding on
all Executive Branch agencies, notwithstanding any GAO decisions
to the contrary,” and reminded agencies that GAO decisions are
not binding on the Executive Branch. Id. at 13.
Thereafter, the agency was contacted by the SBA, OMB, and senior
officials in the Department of the Army, who expressed the view
that setting aside the requirement for HUBZone contractors was
in “direct violation of OMB guidance.” Agency Memorandum on
Supplemental Protest at 1. The agency also was contacted by an
attorney representing an 8(a) firm who suggested that the firm
might seek injunctive relief to prevent the agency from awarding
the contract under the current RFP. Id. Because of the threat of
litigation and the “unresolved issues attending parity of small
business programs,” the agency decided to cancel the RFP and
consider other vehicles to procure Army combat shirts.
Contracting Officer’s Statement para. 1. On September 9, the
agency issued a delivery order for a portion of the quantity
included in the RFP to the National Industries for the Blind
(NIB), in accordance with the Javits-Wagner-O’Day Act, 41 U.S.C.
sections 46-48c (2006), and the rules of the Committee for
Purchase from People Who are Blind or Severely Disabled, 41
C.F.R. ch. 51 (2009). Contracting Officer’s Statement para. 7.
ASA contends that the agency’s decision to cancel the
solicitation was unreasonable. In a negotiated procurement, such
as the one here, a contracting agency has broad discretion in
deciding whether to cancel a solicitation and need only
establish a reasonable basis for doing so. ESM Group, Inc.,
B-400298.2, Oct. 14, 2008, 2008 CPD para. 190 at 2. For example,
we have found the cancellation of an RFP to be reasonable where
the agency determines that it no longer has a requirement for
the item solicited, Peterson-Nunez Joint Venture, B-258788, Feb.
13, 1995, 95-1 CPD para. 73 at 4, where the agency discovers
that an existing contract for its requirement would be more
advantageous to the government than continuing with the
procurement, Brian X. Scott, B-310970, B-310970.2, Mar. 26,
2008, 2008 CPD para. 59 at 3, or where, as a result of questions
by cognizant officials, the agency reasonably determines that it
needs to further review its requirements before proceeding with
the planned procurement. Kenco Assocs., Inc.; Air Prods. and
Chems., Inc., B‑297503, B-297503.2, Jan. 25, 2006, 2006 CPD para.
24 at 2-5.
Here, the agency has advanced a reasonable basis for canceling
the RFP. Given the conflicting views expressed in GAO’s legal
decisions and the Executive Branch directives, the threat of
litigation from competing small business interests, and the
availability of another procurement vehicle to meet at least
some of the agency’s requirements while it decides how to
procure the remaining items, we find nothing improper in the
agency’s decision to cancel the RFP here. (All
Seasons Apparel, Inc., B-401805; B-401805.2, November 4,
2009) (pdf)
The Army received proposals from four offerors by the RFP’s
January 24, 2008 closing date. Upon completing its evaluation,
the Army notified ARI in April 2008 that it intended to make
award to El Poco Enterprises. ARI subsequently filed a protest
with the Small Business Administration (SBA) challenging El
Poco’s size status; ARI also filed a protest with our Office
challenging the Army’s evaluation and selection decision. The
SBA determined that El Poco did not qualify as a small business
and therefore was ineligible for award. In July 2008, the Army
informed our Office that it intended to terminate El Poco’s
award and we dismissed ARI’s protest as academic. Approximately
6 months later, on January 13, 2009, the Army made award to Will
Technology, Inc. (WTI), which was identified as next in line for
award under the solicitation. ARI then filed a protest
challenging the Army’s second award decision. In its protest,
ARI argued that WTI’s proposal was not in compliance with the
rules regarding limitations on subcontracting by small business
concerns, i.e., the “50 percent rule.” The Army took corrective
action for a second time on March 31, 2009, representing that it
intended to terminate WTI’s contract. We dismissed ARI’s protest
as academic on April 3, 2009. Thereafter, rather than making
award to ARI, the next in line offeror, the Army decided to
cancel the solicitation and issue a new solicitation at a future
date. While TETRA1
prepares to issue the new solicitation, it is obtaining
contractor support services through a delivery order awarded by
the Defense Intelligence Agency, Missile and Space Intelligence
Center, under an existing ID/IQ contract, and is also receiving
support from Air Force Reservists and government interns.
(sections deleted)
Here, the Chief of TETRA
has represented that since the time the solicitation was issued
in December 2007, “TETRA’s mission has evolved to become focused
on threat resource adequacy” and, as a consequence, TETRA “will
require more technical support . . . rather than the
programmatic support as solicited in 2007.” Declaration of Chief
of TETRA, Aug. 21, 2009. In addition, TETRA explained that it
needed to reassess its support requirements in light of
in-sourcing efforts, which include the augmentation of TETRA’s
permanent workforce with “interns and Air Force Flight 199
[Reservists] with up to 2 [full time equivalents].” Id. Based on
the change in requirements, TETRA withdrew funding from the Army
for the solicitation to allow TETRA time to develop new
requirements, which will be issued under a new solicitation at a
future date.
In response, ARI, as a general matter, challenges the notion
that TETRA’s mission has “evolved” to focus more on “threat
resource adequacy.” In this regard, ARI identifies specific
instances dating to 2007 where the term “adequacy” has been
associated with TETRA’s mission as it relates to “test adequacy”
and the solicitation’s use of the broader term “resource
analysis” which, in ARI’s view, encompasses “resource adequacy.”
ARI also contends that the fallacy of TETRA’s position is
evidenced by the fact that TETRA has hired a support contractor
pending reissuance of the solicitation; ARI alleges that the
contractor is performing the tasks identified under the
cancelled solicitation. Given that TETRA, not ARI, is in the
best position to identify its requirements, and in light of the
deference afforded agencies in identifying their needs, Safety
Storage, Inc., B-280851.2, May 13, 1999, 99-1 CPD para. 93 at 2,
we view ARI’s reliance on the agency’s use of the term
“adequacy,” coupled with its own beliefs regarding the nature of
the agency’s requirements, to be an inadequate basis for our
Office to question the agency’s representations regarding its
changed needs. Moreover, we do not find the activities performed
by TETRA’s temporary support contractor, while TETRA redrafts
its requirements, to be relevant indicia of whether TETRA’s
needs have changed since the issuance of the original
solicitation in December 2007, given that TETRA is still in the
process of crafting a new solicitation to reflect its changed
requirements.
Assuming that TETRA’s mission has in fact changed, ARI
alternatively argues that the cancelled solicitation could have
been used to meet the agency’s changed requirements since the
solicitation required flexibility by the contractor, generally
informing offerors that “[i]n a constantly changing environment,
TETRA requires flexible support, agile and capable performance,
and aggressive pursuit of satisfying new requirements.” RFP at
5. ARI’s reliance on general undefined statements regarding
contractor flexibility in the RFP misses the point--TETRA was
not required to make award under a solicitation which it
maintains was fundamentally inconsistent with its needs and on
the possibility that broad statements in the RFP would be
sufficient for the agency to satisfy its changed needs.
As a final matter, ARI maintains that the Army could have
readily awarded ARI task orders for those mission area functions
requiring support until TETRA completes its reassessment and
issues the new solicitation. According to ARI, the agency has
instead unreasonably decided to have its support services needs
met using government personnel and a task order issued under a
separate ID/IQ contract. In this regard, ARI asserts that award
under the solicitation would have been a “less expensive
approach.” ARI’s Comments, July 24, 2009, at 2. ARI’s assertion
regarding cost, however, is unpersuasive; it is based entirely
on ARI’s own comparison of the cost of the support contractor
and ARI’s cost for performance as the incumbent contractor, not
ARI’s proposed cost under the cancelled solicitation. We
therefore have no basis to conclude that the agency acted
unreasonably in deciding to cancel the solicitation. (Applied
Resources, Inc., B-400144.7; B-400144.8, July 31, 2009)
(pdf)
------------------------
1. Test &
Evaluation Threat Resource Activity
Following the receipt of revised proposals, DPW requested
verification of available funding to make the award, see Agency
Report (AR), Tab 9, DPW Email to Budget Office, May 5, 2009, and
was informed that there was not sufficient funding to make the
award. Contracting Officer’s Statement at 3-4. Subsequently,
DPW's request for approval to award this services contract was
disapproved. AR, Tab 8, Request for Services Contract Approval,
May 15, 2009, at 1. The RFP was cancelled, and offerors were
notified "that the solicitation has been cancelled in its
entirety due to change in the Government's requirements." AR,
Tab 12, Contracting Officer's Letter to VetPride, May 27, 2009.
This protest followed.
VetPride complains that the Army cancelled the solicitation
after 5 months of negotiations and contends that the agency
acted unreasonably in "stringing along all the contractors who
were found to be in a competitive range." Comments at 1.
VetPride disputes that the Army does not have sufficient funds
to procure these services. The protester argues that the record
establishes that the agency has a continuing need for these
services, given the agency's use of federal employees for work
reception and management services. Id. at 2.
In a negotiated procurement such as this one, the contracting
agency has broad discretion in deciding whether to cancel a
solicitation and need only have a reasonable basis for doing so.
A-Tek, Inc., B-286967, Mar. 22, 2001, 2001 CPD para. 57 at 2. If
a reasonable basis exists to cancel a solicitation, an agency
may cancel the solicitation regardless of when the information
first surfaces or should have been known, even if the
solicitation is not cancelled until after proposals have been
submitted and evaluated. See SEI Group, Inc., B-299108, Feb. 6,
2007 CPD para. 35 at 3; VSE Corp., B-290452.2, Apr. 11, 2005,
2005 CPD para. 111 at 6; Daston Corp., B-292583, B‑292583.2,
Oct. 20, 2003 CPD para.193 at 3. An agency's lack of funding for
a procurement is a reasonable basis for cancellation, as
agencies may not award contracts that exceed available funds.
Quality Support, Inc., B-296716, Sept. 13, 2005, 2005 CPD para.
172 at 2; First Enter., B-292967, Jan. 7, 2004, 2004 CPD para.
11 at 3-4; James M. Carroll--Recon., B-221502.3, Mar. 24, 1986,
86-1 CPD para. 290 at 3.
Here, the record establishes a reasonable basis for the
cancellation of the solicitation. In response to our request,
the Army provided the declaration of the Deputy to the Garrison
Commander of the Installation Management Command at Fort Polk,
who stated that he was responsible for, among other things,
management of Garrison staff, coordination of services at the
installation, and resource planning and execution. He stated
that, as a result of his office's review, it was determined that
"[t]he option to award a separate work reception contract was
simply unaffordable and could not be exercised in light of the
lack of funding. I therefore directed that the solicitation of
this (SAF) contract be stopped." Declaration of the Deputy to
the Garrison Commander, June 30, 2009, at 2. The deputy also
described how the Army could satisfy the reception services by
"directly absorbing work reception into the available government
staffing through a combination of hiring against vacant
authorizations and reassigning tasks of existing staff as
needed." Id.
With regard to VetPride's contention that the agency has a
continuing need for these services and its disagreement that the
agency lacks the funding to procure these services, we agree
that the record establishes the agency's continuing need. That
is why the agency was required to consider other alternatives
such as reorganizing its existing staff when it learned that it
would not have sufficient funding to procure the services under
the contract. Although VetPride disagrees that the agency lacked
sufficient funds for this procurement, it does not show that the
agency's decision concerning how it would allocate its available
funds was unreasonable. In that regard,
it is not our role to question the unavailability of funds. The
management of an agency's funds generally depends on the
agency's judgment concerning which projects and activities
should receive increased or reduced funding and a contracting
agency has the right to cancel a solicitation when, as a result
of its allocation determinations, sufficient funds are not
available. First Enter., supra, at 3. Accordingly, the
protest is denied. (VetPride
Services, Inc., B-401435, July 28, 2009) (pdf)
On June 27, QSSI filed an agency-level protest challenging the
cancellation of its task order issued under RFQ‑23247. HUD
denied its protest, and QSSI then filed this protest with our
Office asserting that the cancellation was improper.
In its report responding to the protest, HUD states that,
because it had not first followed the required regulatory
procedures for obtaining a deviation from the citizenship
requirements of HUDAR sect. 2452.239-70 (see HUDAR sect.
2401.403), its offeror question response--that the agency would
consider granting waivers of the HUDAR sect. 2452.239-70
citizenship requirements on an exceptional basis--introduced an
ambiguity into RFQ‑23247 regarding whether or not offerors would
be able to propose non-U.S. nationals. The agency concludes that
this created an unfair competitive environment that rendered the
selection of QSSI improper. QSSI disagrees that the solicitation
was defective.
It is evident from the record that, whether or not ambiguous,
RFQ‑23247 did not accurately reflect the agency's minimum needs,
but instead was more restrictive of competition than necessary.
In this regard, where an agency issues a purchase order to a
firm based on a solicitation that does not accurately reflect
the agency's minimum needs, the purchase order should be
canceled and the procurement reopened to allow competing firms
an opportunity to respond to the agency's actual requirements.
See Freedom Graphic Sys., Inc., B-277305, Sept. 22, 1997, 97-2
CPD para. 82 at 2; Budney Indus., B-252361, June 10, 1993, 93-1
CPD para. 450 at 3-4.
Here, the amended bridge solicitation (RFQ-23317) unambiguously
expanded the categories of contractor employees who may have
access to HUD information systems to include not only U.S.
citizens or nationals, but also aliens lawfully admitted to be
employed in the U.S., eliminating the prior requirement that an
offeror could only propose such non-U.S. national employees on
an exceptional basis (i.e., where it could demonstrate that no
other employee who meets the citizenship requirements could
perform the work for which the non-U.S. national employee was
proposed). It is clear from this RFQ that HUD has determined
that non-U.S. national employees may have access to HUD
information systems, so long as the government is able to obtain
sufficient background information to complete a background
investigation for the employee, without the requirement for a
showing of exceptional circumstances that was called for under
RFQ‑23247.
Since QSSI's task order was issued under a solicitation that did
not accurately reflect the agency's minimum needs, but instead
was more restrictive of competition than necessary, and thus may
have deterred some firms from competing or submitting a more
advantageous quotation, we conclude that HUD properly terminated
QSSI’s order. (Quality Software
Services, Inc., B-400206.2, November 19, 2008) (pdf)
The RFP, issued on June 16, 2008, contemplated the award of an
indefinite-delivery/indefinite-quantity contract with a 1-year
base period plus four 1-year options for ecological restoration
services within Everglades National Park. For each year, the RFP
included a contract pricing schedule, which set forth contract
line item numbers (CLIN) for specific tasks. For each CLIN,
offerors were required to propose fixed prices for identified
minimum and maximum estimated order quantities. The RFP provided
that the government would order, at a minimum, $2 million worth
of services under the contract; the total dollar value per order
would not exceed $24 million; the total dollar value of all
orders for the base year would not exceed $24 million; and the
total dollar value of orders for each option year would not
exceed $26 million. RFP at 5.
(sections
deleted)
NPS has identified
three reasons why the solicitation should be cancelled. First,
cancellation is proper because NPS failed to mitigate the unfair
competitive advantage Optimum derived as a consequence of
learning Westwind's price information during its debriefing.
Second, NPS claims that the solicitation needs to be revised to
address "unclear and/or confusing" language regarding the
agency's evaluation of offerors' past performance and
experience. AR at 5. Third, the agency maintains that as a
consequence of a significant reduction in funding (approximately
50 percent), it needs to lower the estimated maximum order
quantities for the CLINs as well as reduce the maximum order
dollar values stated in the solicitation for the base period and
each option period to $10 million, from $24 million and $26
million, respectively. Contracting Officer's Statement at 4.
(sections
deleted)
In a negotiated
procurement, contracting agencies enjoy broad discretion in
determining whether to cancel a solicitation, and need only have
a reasonable basis for doing so. ESM Group, Inc., B-400298.2,
Oct. 14, 2008, 2008 CPD para. 190 at 2. Here, we need not review
the agency's first two justifications for cancellation since the
agency's third justification establishes a reasonable basis for
its decision to cancel the RFP. We have held that a reasonable
basis for cancellation exists where the solicitation does not
accurately reflect the agency's requirements. Blue Rock
Structures, Inc., B-400811, Jan. 23, 2009, 2009 CPD para. 26 at
2. Due to reduced funding levels, the agency here recognized
that the solicitation did not accurately reflect its
requirements given that the maximum estimated order quantities
for the CLINs were overstated, as were the maximum order dollar
values for the base and option periods.
The protester contends that changes to the solicitation's
maximum values are immaterial because the government is only
obligated under the solicitation to order the stated minimum
order value ($2 million), which remain unchanged. We disagree.
Both the maximum estimated quantities for the CLINs and the
maximum order values during each ordering period are provided to
help offerors make informed judgments when proposing their unit
prices; they could directly affect offerors' pricing strategy.
Moreover, we have recognized that reducing maximum quantities
can allow further competition from firms unable to perform at
the originally stated quantities, but with the ability to
perform at lower quantities. See, e.g., Cadre Tech., Inc.;
Hubbard Assoc. of Florida, Inc., B-221430, B-221430.2, 86-1 CPD
para. 256 at 2. Given the magnitude of the changes to these
material aspects of the solicitation, the agency acted
reasonably in concluding that the solicitation did not
accurately state the agency's requirements and deciding to
cancel the solicitation so that it could issue a new
solicitation based on the revised estimates. (Optimum
Services, Inc., B-401051, April 15, 2009) (pdf)
With regard to
competitive negotiated acquisitions, Federal Acquisition
Regulation (FAR) sect. 15.305(b) provides that "[t]he source
selection authority may reject all proposals received in
response to a solicitation, if doing so is in the best interest
of the Government." We have consistently held that an agency has
broad authority to decide whether to cancel a solicitation
issued under competitive negotiated procedures, and to do so
need only establish a reasonable basis. We have recognized that
the potential for cost savings provides a reasonable basis for
cancellation. Business Commc'ns Sys., Inc., B-218619, July 29,
1985, 85-2 CPD para. 103 at 3. If a reasonable basis exists to
cancel a solicitation, an agency may cancel the solicitation
regardless of when the information first surfaces or should have
been known, even if the solicitation is not canceled until after
proposals have been submitted and evaluated, or even if
discovered during the course of a protest. SEI Group, Inc.,
B‑299108, Feb. 6, 2007, 2007 CPD para. 35 at 3; VSE Corp.,
B‑290452.2, Apr. 11, 2005, 2005 CPD para. 111 at 6.
RN Expertise argues that: (1) acquiring the services under the
interagency agreement is actually more expensive than under a
contract awarded to RN Expertise under the canceled RFP; (2) the
services called for under the RFP are outside the scope of the
contract to be used to obtain the services pursuant to the
interagency agreement, thereby rendering the contemplated orders
non-competitive and contrary to law; (3) the agency failed to
consider "best value" as provided in the canceled solicitation
when it decided to utilize the interagency agreement; and (4)
use of the interagency agreement is improper because the Navy
has not complied with necessary policies and procedures to have
its collection requirements met under the interagency agreement,
including the requirements established under the Economy Act, 31
U.S.C. sect. 1535 (2006) and FAR subpart 17.5. We find the
protester's challenges to be without merit.
As an initial matter, there is nothing in the record to suggest
that utilizing the interagency agreement will be more expensive
than award to RN Expertise under the canceled solicitation. The
agreement expressly provides for charging DOD agencies two fixed
rates, a rate for CONUS collections and a separate rate for
OCONUS collections. These rates, when multiplied by the
estimated number of tests identified in the solicitation,
support the cost savings identified by the agency. The
protester's challenge to the cost savings is based not on these
fixed rates, but on a calculated composite collection rate which
the protester derives from prices of actual orders issued
pursuant to the agreement. This composite rate, however, is
based in part on orders for other than collection services. As a
consequence, the protester's arguments in this regard do not
cast reasonable doubt on the agency's findings.
Regarding the additional challenges raised by the protester,
they are unsupported or irrelevant. Specifically, the protester
fails to provide any explanation of its allegation that the
Navy's requirements are outside the scope of the DOI contract to
be used in connection with the interagency agreement. To the
contrary, while the statements of work for the solicitation and
the DOI contract may not be identical, they are in fact similar
in material respects. Absent any concerns regarding material
differences between the scope of the solicitation and the DOI
contract, we see no basis to conclude that the agency acted
unreasonably in finding that "[t]he required services under both
vehicles are the same or equal." AR, Tab 16, Declaration of Navy
Drug Program Coordinator.
In addition, the protester's "best value" concern and its
challenge to the legality of the interagency agreement are
misplaced. Regarding the "best value" issue, the protester
suggests that it was improper for the agency to consider solely
cost savings in deciding to cancel the solicitation since the
solicitation established the agency's intent to obtain the "best
value" through a price/technical tradeoff process, with
technical factors being more important than price. This argument
is misplaced because, as noted above, an agency need only have a
reasonable basis to cancel a solicitation, and the reasonable
possibility of achieving cost savings provides such a basis.
Because the "best value" issue relates to the intended award
under the canceled solicitation and the protester has failed to
explain how the award provisions of the canceled solicitation
are relevant to our consideration of the reasonableness of the
agency's cost savings findings and cancellation decision, we
have no basis to question the agency's decision to cancel the
RFP.
Finally, the protester's concerns regarding the Navy's failure
to comply with certain administrative procedures, including
those established by the Economy Act and the FAR, are misplaced
since the procedures and policies identified concern internal
administrative matters for the agency, or they concern the
Navy's compliance with requirements associated with ordering
under the agreement. As a consequence, they do not involve the
propriety of the cancellation decision and do not provide a
basis to challenge the reasonableness of the Navy's actions.
(RN Expertise, Inc., B-401020,
March 27, 2009) (pdf)
First, with
regard to e-Management's and Centech's protests challenging the
agency's decision to cancel the solicitation, we note that the
Federal Acquisition Regulation (FAR) provides:
Government business shall be conducted in a manner above
reproach and, except as authorized by statute or regulation,
with complete impartiality and with preferential treatment for
none. Transactions relating to the expenditure of public funds
require the highest degree of public trust and an impeccable
standard of conduct. The general rule is to avoid strictly any
conflict of interest or even the appearance of a conflict of
interest in Government-contractor relationships.
FAR sect. 3.101-1.
Further, in a negotiated procurement, an agency has broad
authority to cancel a solicitation, and needs only a reasonable
basis to do so. See, e.g., A-Tek, Inc., B‑286967, Mar. 22, 2001,
2001 CPD para. 57 at 2. In this regard, an agency may properly
cancel a solicitation no matter when the information
precipitating the cancellation first surfaces or should have
been known. See, e.g., Daston Corp., B-292583, B‑292583.2, Oct.
20, 2003, 2003 CPD para. 193 at 3. Where a protester has alleged
that an agency's rational for cancellation is pretextual, that
is, the agency's actual motivation is to avoid awarding a
contract on a competitive basis or to avoid resolving a protest,
we will more closely examine the bases for the agency's actions.
See, e.g., Superlative Tech., Inc., B-310489, B-310489.2, Jan.
4, 2008, 2008 CPD para. 12 at 7; Gonzales‑McCaulley Inv. Group,
Inc., B-299936.2, Nov. 5, 2007, 2007 CPD para. 192 at 5.
Notwithstanding such closer scrutiny, the reasonableness
standard applicable to cancellation of a solicitation remains
unchanged.
Here, as noted above, the CIO was the COTR under e-Management's
prior contract, had an undisclosed personal relationship with
e-Management's president, and was the primary author of this
solicitation's statement of work and evaluation factors. In
response to e-Management's second protest, the agency provided
additional documentation regarding the CIO's activities during
the source selection process. For example, early in the
evaluation process, the agency's evaluation panel had ranked the
third offeror's proposal as the most highly rated, but that
ranking was changed following criticism by the CIO. Agency
Report, Nov. 24, 2008, at 6-7. Finally, the agency has produced
a copy of the IG's interim report for this Office's in camera
review. We understand the IG has not yet closed its
investigation regarding this matter; accordingly, we will not
further discuss that report.
Based on our review of the record, we do not question the
reasonableness of the agency's determination to cancel the
solicitation and to subsequently issue a new solicitation for
this procurement. More specifically, here, the agency obtained
information following contract award indicating that the terms
of the solicitation, including the statement of work and
evaluation factors, may not have been written with complete
impartiality and objectivity. Further the record provides a
reasonable basis for the agency's concern that, as a result of
the potential bias, the agency's consideration of all offerors'
proposals may have been compromised. In such circumstances, the
approach taken by NHTSA appears to be a prudent course of
action. e-Management's and Centech's assertions that
cancellation of the solicitation was unreasonable and pretextual
are without merit. (e-Management
Consultants, Inc.; Centech Group, Inc., B-400585.2;
B-400585.3, February 3, 2009) (pdf)
As in its agency-level protest, Blue Rock contends that the
cancellation was improper and violated FAR sect. 14.404.1(a)(3).
It also argues that the cancellation was discriminatory towards
HUBZone small business concerns and the HUBZone small business
program because, in Blue Rock's view, the expanded project will
no longer be appropriate for a HUBZone small business set-aside.
As explained in the agency's response to the agency-level
protest, an agency, in a negotiated procurement, has broad
authority to decide whether to cancel a solicitation, and needs
only a reasonable basis to do so. A reasonable basis for
cancellation exists when a solicitation does not accurately
reflect the agency's requirements, particularly where
cancellation of the solicitation and the issuance of a revised
solicitation would present the potential for increased
competition, efficiencies or cost savings. If a reasonable basis
exists to cancel a solicitation, an agency may cancel the
solicitation regardless of when the information first surfaces
or should have been known, even if the solicitation is not
canceled until after proposals have been submitted and
evaluated. Rice Servs., Inc.; Watson Servs., Inc., B-293861 et
al., June 15, 2004, 2004 CPD para. 167 at 4.
In its report in answer to this protest, the agency advises that
it cancelled this solicitation because the current RFP no longer
reflects its requirements, and because a substantially revised
RFP is being developed, which is expected to result in greater
competition and in lower overall cost. The agency reports that
the pool construction project was originally planned to include
both the Rescue Swimmer Training Facility and the Dunker
Facility, but the agency decided to delay construction of the
Dunker Facility because of a lack of funding. AR, Tab 22,
Declaration of CO at 2. The agency explains that these plans
have changed because Congress has now made funds available for
both projects. Thus, the agency explains that it will be more
efficient to build the entire complex as one project within one
building, rather than adding the second feature later. In this
regard, the agency states that the efficiencies of combining the
two projects include, among other things: single site
mobilization and demobilization, better coordinated building
design, better coordinated construction, reinstatement of
certain of the deleted original scope requirements for the
swimmer training facility, and a reduction in the overall
construction time. Id. at 3.
Here, we have no basis to question the agency's determination
that having one facility to house its water training
requirements results in a more efficient training operation. The
increased scope of work associated with combining these training
requirements in one facility means that the current RFP does not
reflect the agency’s requirements. For these reasons, we find
that the agency reasonably decided to cancel this RFP.
To the extent that the protester argues that the "bundling" of
the two projects will likely result in the new procurement not
being set aside for HUBZone business concerns, we note that this
argument is speculative, as the new solicitation has not been
released. Nonetheless, the agency reports that based on its
market research, it has a reasonable expectation that offers
will be obtained from at least two responsible HUBZone small
business concerns and has determined that the new combined
acquisition will again be set aside for HUBZone small business
concerns. CO Letter, December 2, 2008.
Blue Rock finally maintains that its protest should be sustained
because the agency’s report was untimely filed with our Office.
Our Bid Protest Regulations, 4 C.F.R. sect. 21.3 (c), require
the contracting agency to file a report within 30 days and the
agency’s failure to comply with the prescribed time limits may
result in resolution of the protest without consideration of the
untimely submission. See Price Waterhouse, B-220049, Jan. 16,
1986, 86-1 CPD para. 54 at 5. We note that the report was filed
with our Office 1 day after the required due date. That said,
Blue Rock cannot claim it was prejudiced by the delay, and we
believe the facts presented by the agency, which demonstrate
that the protest is without merit, may be considered. Land Mark
Realty, Inc., B-224323, Dec. 1, 1986, 86-2 CPD para. 620 at 2.
(Blue Rock Structures, Inc.,
B-400811, January 23, 2009) (pdf)
In response to the protest and prior to submitting its agency
report regarding the propriety of its actions, the Army notified
our Office and the parties that it would take corrective action
by terminating the current award, issuing a new solicitation
that clarified the requirement, receiving new proposals, and
making a new award decision. We found that the Army's corrective
action rendered academic MCS's protest of the award to Vantex,
and dismissed MCS's protest.
MCS complains that the Army has no reasonable basis for
canceling the RFP and resoliciting the requirements because the
contracting officer "stated that there was no reason to believe
that [the] Protester could not meet the requirements of the
intended Contract" and the protester submitted the lowest priced
offer. Comments at 1.
Contracting officials in negotiated procurements have broad
discretion to take corrective action where the agency determines
that such action is necessary to ensure fair and impartial
competition. Patriot Contract Servs. LLC et al.,
B‑278276.11 et al., Sept. 22, 1998, 98-2 CPD para. 77 at 4. We
will not object to the specific proposed corrective action, so
long as it is appropriate to remedy the concern that caused the
agency to take corrective action. Networks Elec. Corp.,
B‑290666.3, Sept. 30, 2002, 2002 CPD para. 173 at 3.
Here, the Army agrees with the protester that the RFP did not
request or require offerors to submit technical proposals. The
agency explains, however, "that it needs each offeror to submit
a technical proposal that describes how that offeror intends to
meet the requirement" in order "[t]o ensure that the Army's
requirements are properly and effectively met." Agency Report at
4. In addition, the agency explains that its proposed corrective
action will ensure a full and open competition by allowing all
interested offerors to submit proposals.
We find no basis to object to the Army's proposed corrective
action. Although the RFP informed offerors that the agency would
evaluate, among other things, the offerors' ability to meet the
contract specifications, the agency's ability to make such an
assessment was hindered by the failure of the solicitation to
require the submission of technical proposals. Under the
circumstances, we conclude that the agency reasonably determined
that it should cancel the RFP and resolicit after clarifying its
requirements. (Major
Contracting Services, Inc., B-400737.2, December 17, 2008) (pdf)
In a negotiated procurement such as this one, a contracting
agency has broad discretion in deciding whether to cancel a
solicitation, and need only establish a reasonable basis for
doing so. A-Tek, Inc., B-286967, Mar. 22, 2001, 2001 CPD para.
57 at 2. An agency may properly cancel a solicitation no matter
when the information precipitating the cancellation first
surfaces or should have been known, even if the solicitation is
not canceled until after offers have been submitted and
evaluated. Daston Corp., B-292583; B-292583.2, Oct. 20, 2003,
2003 CPD para. 193 at 3. In this regard, we have found the
cancellation of an RFP to be reasonable where the agency
determines that it no longer has a requirement for the item
solicited, Peterson-Nunez Joint Venture, B-258788, Feb. 13,
1995, 95-1 CPD para. 73 at 4, or where the agency discovers an
existing contract for its requirement would be more advantageous
to the government than continuing with the procurement. Brian X.
Scott, B-310970; B‑310970.2, Mar. 26, 2008, 2008 CPD para. 59 at
3. Where, as here, a protester has alleged that an agency’s
rationale for cancellation is but a pretext, that is, the
agency’s actual motivation is to avoid awarding a contract on a
competitive basis or to avoid resolving a protest, we will
closely examine the reasonableness of the agency’s actions in
canceling the solicitation. Gonzales-McCaulley Inv. Group, Inc.,
B‑299936.2, Nov. 5, 2007, 2007 CPD para. 192 at 5.
While the record here is not a model of clarity, the agency has
affirmatively represented that it no longer has a need for the
magnesium powder, specifically stating that “the Agency has no
requirement or plans to procure magnesium powder in the near
future.” AR at 1-2. With regard to the protester’s challenge to
the veracity of this representation, we note that Government
officials are presumed to act in good faith and a protester’s
claim that contracting officials are motivated by bias or bad
faith must be supported by convincing proof. Our Office will not
attribute unfair or prejudicial motives to procurement officials
on the basis of inference or supposition. Brian X. Scott, supra,
at 4. The protester has not provided such convincing proof. In
this regard, we do not view the fact that the customer notified
the procuring activity on July 14 that it no longer needed the
magnesium powder, and the procuring activity’s cancellation of
the solicitation by amendment on July 14 and notification of our
Office of the cancellation on July 15 on a different basis, as
convincing proof that the agency was not truthful in its
statement that it no longer needed the magnesium powder. This is
so given that these different reasons were advanced during the
same time frame by different elements within the agency. Nor do
we view the agency’s statement that the requiring activity “is
obtaining the magnesium powder through an existing DLA contract”
to be proof of bias or bad faith, given that the discovery of an
existing contract to satisfy its needs may in itself provide a
reasonable basis for a cancellation, and in the alternative,
that according to the protester, the contract has now expired.
In sum, we simply cannot find, as asserted by the protester,
that the Army’s statement that it no longer has a need for the
magnesium powder is “demonstrably false.” See Protester’s
Comments at 12. Since an agency has reasonable basis to cancel a
solicitation where it determines that it no longer has a
requirement, we find based upon our review of the record here
that the agency’s cancellation of the solicitation is
unobjectionable. See Peterson-Nunez Joint Venture, supra.
(ESM Group, Inc., B-400298.2,
October 14, 2008) (pdf)
DBE argues that FEMA’s cancellation of the year 3 (Task Order
Proposal Request) TOPR resulted in an improper extension of
the year 2 task order. Specifically, DBA contends that the
extension of the year 2 task order denies the protester a fair
opportunity to compete for the agency’s requirements. FEMA
contends that it had a reasonable basis for canceling the
solicitation and extending the year 2 task order. We agree with
the agency.
A contracting agency need only establish a reasonable basis to
support a decision to cancel an RFQ. Deva & Assoc. PC,
B-309972.3, Apr. 29, 2008, 2008 CPD para. 89 at 3. A reasonable
basis to cancel exists when, for example, an agency concludes
that a solicitation does not accurately reflect its needs, or
the agency determines that a new solicitation presents the
potential for new competition or savings. Logistics Solutions
Group, Inc., B-294604.7, B-294604.8, July 28, 2005, 2005 CPD
para. 141 at 3; Para Scientific Co., B-310903, B-310742.2, Feb.
14, 2008, 2008 CPD para. 46 at 3.
Here, FEMA concluded that cancellation of the year 3 TOPR was
warranted because the agency’s requirements had changed. As
discussed above, FEMA states that it will not place new orders
against the ID/IQ contract, and will instead issue four new
contracts to address the agency’s revised requirements. The
agency states that the new contracts will allow the government
to address redefined requirements for the services, debundle the
requirements, reduce costs to the government, and to improve
performance as compared to the current overlapping contracts.
Contracting Officer (CO) Statement at 2. On this record, we
think the agency had a reasonable basis to cancel the year 3
TOPR. (added to decision) (Doug
Boyd Enterprises, LLC, B-400390, October 2, 2008) (pdf)
Federal Acquisition Regulation (FAR) sect. 15.305(b) provides,
with regard to competitive negotiated acquisitions, “[t]he
source selection authority may reject all proposals received in
response to a solicitation, if doing so is in the best interest
of the Government.” We have consistently recognized that an
agency has broad authority to decide whether to cancel a
solicitation issued under competitive negotiated procedures, and
to do so need only establish a reasonable basis. We have
recognized that a reasonable basis for cancellation exists and
cancellation is appropriate when a solicitation does not
accurately reflect the agency’s requirements, particularly where
cancellation of the solicitation and the issuance of a revised
solicitation would present the potential for increased
competition. If a reasonable basis exists to cancel a
solicitation, an agency may cancel the solicitation regardless
of when the information first surfaces or should have been
known, even if the solicitation is not canceled until after
proposals have been submitted and evaluated, or even if
discovered during the course of a protest. SEI Group, Inc.,
B‑299108, Feb. 6, 2007, 2007 CPD para. 35 at 3; VSE Corp.,
B‑290452.2, Apr. 11, 2005, 2005 CPD para. 111 at 6.
Here, the contracting officer’s decision to cancel this RFP was
reasonable. First, the agency determined that the solicitation
did not adequately meet its needs. As explained above, the SSEB
determined that the solicitation had major omissions and
ambiguities that would require substantial changes to correct.
Specifically regarding subfactor (1B), because of omissions in
the RFP, the SOPs that offerors submitted did not have enough
information for the SSEB to properly assess the potential
offerors’ technical capabilities. Subfactor (2B) was found not
to encompass all elements that were necessary to ensure that
quality control inspections could be met. Where, as here, a
solicitation no longer accurately reflects an agency’s
requirements, and resolicitation could result in increased
competition, cancellation of the solicitation is appropriate.
See Global Solutions Network, Inc., B‑289342.4, Mar. 26,
2002, 2002 CPD para. 64 at 3.
Moreover, the contracting officer also determined that it did
not appear that some of the present offerors had the capability
to satisfy the 90-day transition requirement, and the agency
reasonably believed that an increase in the period for the new
awardee to transition to providing the required services from 90
days to 120 days, or possibly 180 days, could potentially result
in increased competition. An agency may cancel a solicitation
where it materially overstates the agency’s requirements and
there is a potential enhanced competition if the requirements
are relaxed. Labatt Food Serv., Inc., B-259900, May 3,
1995, 95‑1 CPD para. 229 at 3-4. Here, while the protesters
assert that there is no likelihood of additional competition,
the record shows that five small business firms attended the
pre‑proposal conference under the predecessor solicitation, yet
only three proposals were ultimately evaluated. Thus, based on
the record, the contracting officer had a reasonable belief that
more small businesses could submit satisfactory proposals if the
requirement was revised to include a longer transition period.
Under the circumstances, particularly given that none of the
proposals received were satisfactory, the agency acted
reasonably in canceling rather than amending the RFP to make
material changes in the solicitation requirements and in order
to possibly obtain more competition.
The protesters argue that the agency cancellation was a pretext
to avoid further competition among small business offerors and
to continue the contract with the incumbent, a large business.
The record does not support the protesters’ speculation Indeed,
the contracting officer has clearly expressed her intention to
issue the new solicitation as a small business set-aside. Supp.
AR, attach. 1, Declaration of Contracting Officer (Mar. 26,
2008). Until the contracting officer issues a new solicitation
or extends the incumbent’s contract, any assertion that the Army
is not going to set this procurement aside for small businesses
is premature. Ystueta Inc., B-296628.4, Feb. 27, 2006, 2006 CPD
para. 46 at 2. (North Shore Medical
Labs, Inc.; Advanced BioMedical Laboratories, LLC, B-311070;
B-311070.2, April 21, 2008) (pdf)
The protesters contend that the cancellation was improper
because the agency did not disclose to potential private sector
offerors that agency officials had requested cancellation of the
A-76 competition. In the protester’s view, it was unfair to ask
private sector offerors to expend resources to respond to the
RFP while the agency was actively seeking to cancel the ongoing
cost comparison study. Protest at 2-5; Protesters’ Comments at
2, 5.
Where an agency determines that a solicitation does not
accurately reflect its needs, cancellation is appropriate.
Rice Servs., Ltd., B-284997.5, Mar. 12, 2002, 2002 CPD para.
59 at 4. A contracting agency need only establish a reasonable
basis to support a decision to cancel an RFP; this authority
extends to the cancellation of solicitations used to conduct
A-76 cost comparisons. IT Corp., B-289517.3, July 10,
2002, 2002 CPD para. 123 at 3. So long as a reasonable basis
exists to exercise this authority, an agency may cancel a
solicitation regardless of when the information first arises or
should have been known, even if the solicitation is not canceled
until after proposals have been submitted and evaluated, or even
if discovered during the course of a protest. Glen/Mar Constr.,
Inc., B-298355, Aug. 3, 2006, 2006 CPD para. 117 at 2; Global
Solutions Network, Inc., B-289342.4, Mar. 26, 2002, 2002 CPD
para. 64 at 3.
As discussed above, the record shows that due to the agency’s
increased mission demands caused by the future addition of two
military units, the agency determined that the solicitation no
longer reflected its actual needs. Given that the additional
military units will significantly increase the total population
at WSMR, which would then impact the scope of base operating and
logistics services required at the garrison, we find that the
agency has demonstrated a reasonable basis for its decision to
cancel this procurement. See Satellite Servs., Inc.,
B-288848.3, Apr. 28, 2003, 2003 CPD para. 88 at 14.
We also find no basis to grant the protesters’ request to
recover their costs for competing in this procurement. The
Competition in Contracting Act of 1984, 31 U.S.C. sect.
3554(c)(1) (2000), and our implementing regulations, 4 C.F.R.
sect. 21.8(d) (2008), provide for our Office to recommend
reimbursement of proposal preparation costs only where we
determine that “a solicitation, proposed award, or award does
not comply with statute or regulation.” The fact that the agency
was seeking permission to cancel the procurement, while
simultaneously conducting it, does not render unreasonable an
otherwise appropriate basis for canceling. Since the
cancellation here was proper, and there is no other reason to
conclude that the agency has acted contrary to statute or
regulation, we have no basis to recommend the recovery of
proposal preparation costs. See Bahan Dennis Inc.,
B-249496.3, Mar. 3, 1994, 94-1 CPD para. 184 at 6. (Zia
Engineering & Environmental Consultants, LLC; Garrison
Engineering & Maintenance Services, LLC, B-400127, August 7,
2008) (pdf)
Deva asserts that the
agency’s decision to cancel the original RFQ lacks a reasonable
basis. In the protester’s view, the SOW encompassed the agency’s
requirements for credit reform work under both TOs, and there is
no evidence of any significant change in the agency’s
requirements.
A contracting agency need only establish a reasonable basis to
support a decision to cancel an RFQ. Surgi-Textile, B-289370,
Feb. 7, 2002, 2002 CPD para. 38 at 2. A reasonable basis to
cancel exists when, for example, an agency determines that a
solicitation does not accurately reflect its needs, or where
there is a material increase in the services needed to satisfy
the agency’s requirements; in such cases, cancellation of the
solicitation and issuance of a revised solicitation is
appropriate. Logistics Solutions Group, Inc., B-294604.7,
B-294604.8, July 28, 2005, 2005 CPD para. 141 at 3. The
agency’s decision to cancel the RFQ was reasonable because the
record shows that its requirements have changed. While the
original SOW encompassed credit reform work, it was specifically
described only under TO No. 2, and the RFQ provided for issuance
of a task order for the credit reform work to a separate vendor.
However, the agency states that it now recognizes that “it would
be unacceptable for the Department to revert to the practice of
using two different contractors . . . because of the possibility
of increased time and cost involved in monitoring the activities
of each contractor to ensure the smooth exchange of information
and cooperation between the two contractors.” Financial
Management Operations (FMO) Director Declaration 3, para. 10. In
addition to combining its requirements under a single task
order, the agency explains that its quantity requirements for
financial statement and credit reform tasks have materially
changed since it first issued the RFQ. In this regard, under the
original TO No. 1, the agency estimated a need for 25,500 hours
to perform financial statement preparation, analysis, and
reconciliation services, and only 1,000 hours for credit reform
work under TO No. 2, a total of 26,500 hours. Under its planned
resolicitation, the agency anticipates a combined total of only
[deleted] to [deleted] hours for both sets of tasks in each of 4
years, with credit reform making up an increasing percentage of
the work. For example, under the original RFQ, credit reform
work represented less than 4 percent of the total estimated
hours under TO Nos. 1 and 2. Under the resolicited TO, the
agency estimates that [deleted] hours ([deleted] percent of the
total) will be devoted to credit reform tasks in the first year,
rising to [deleted] hours ([deleted] percent of the total) in
the third and fourth years.[2] In our view, the significant
increase in credit reform work and decrease in financial
statement work represent material changes in the agency’s
requirements and form a reasonable basis for canceling the
original RFQ.
Deva asserts that credit reform work is within the scope of TO
No.1 and that the agency should simply negotiate its “minor
modifications” with the firm. Specifically, it notes that TO No.
1 includes assistance with correcting reportable conditions
identified in independent financial statements, that credit
reform reporting has been a reportable condition for the agency
since 2003, and that the bridge contractor has performed credit
reform work, identified as OCFO management support, under TO No.
1. Initial Comments at 4; First Supplemental Comments at 5. We
disagree. The credit reform reporting tasks under the original
TO No. 2 encompass tasks not covered by TO No. 1, including
assisting the agency in improving the analytical tools used in
the loan estimation process; ensuring that the tools reconciled
with one another; assisting in the documentation of programs
written to develop assumptions for the Student Loan Model;
assisting in the development of detailed operating procedures
for the loan estimation process; and assisting in efforts to
more fully implement cohort reporting. RFQ app. 1, at 6.
Further, the agency states that the new solicitation will
include a new requirement to develop periodic informational
reports that capture key highlights of the student loan
programs. FMO Director Declaration 1, para. 11. While Deva notes
that its revised quotation refers to its personnel’s “extensive
knowledge” and being “well qualified” to assist, implement, and
comply with provisions of federal financial management
legislation including the Credit Reform Act of 1990, its
quotation for TO No. 1, as revised, does not otherwise address
the credit reform requirements of TO No. 2. [3] In any case,
while Deva asserts that the agency should negotiate with it as
the sole, remaining vendor under TO No. 1, it ignores the
agency’s legitimate plan to seek competition among small
business vendors. See VSE Corp., B‑290452.2, Apr. 11, 2005, 2005
CPD para. 111 at 6 (agency’s decision to cancel and resolicit is
reasonable where it presents the potential for increased
competition). Here, the agency has identified some 21 local
small business FSS vendors, including Deva, who could be
solicited. In our view, since the agency’s new SOW will include
performance of credit reform tasks not included in Deva’s
quotation and, as discussed above, will include significantly
more hours devoted to those tasks, the agency’s changes
represent more than “minor modifications,” and thus justify
cancellation of the initial RFQ. (RFQ under MAS) (Deva
& Associates PC, B-309972.3, April 29, 2008) (pdf)
A contracting agency need only establish a reasonable basis to
support a decision to cancel an RFQ; in this regard, so long as
there is a reasonable basis for doing so, an agency may cancel a
RFQ no matter when the information precipitating the
cancellation first arises, even if it is not until quotations
have been submitted and evaluated. Quality Tech., Inc.,
B-292883.2, Jan. 21, 2004, 2004 CPD para. 29 at 2-3; DataTrak
Consulting, Inc., B-292502 et al., Sept. 26, 2003, 2003 CPD para.
169 at 5. DISA maintains that it canceled the RFQ to co-sponsor
the conference with AFCEA because it was in the best interest of
the government to continue its relationship with AFCEA. DISA
explains that the purpose of the conference is to promote a
technical exchange between government and industry, to inform
the government of industry initiatives and their possible
relevance to the DISA mission, and to discuss with industry the
agency’s plans and concerns regarding its existing programs.
DISA contends that its relationship with AFCEA is beneficial
because the functions of the AFCEA organization are directly
related to DISA’s mission and because the large AFCEA membership
includes both corporations and individuals that have an interest
in the agency’s mission. DISA also states that AFCEA can bring a
level of technical expertise to the planning of the conference
that a support contractor cannot provide. Under the RFQ, a
vendor would help select a conference site and hotel, and would
provide conference management support necessary to implement the
conference. In contrast, the Memorandum of Agreement (MOA)
between DISA and AFCEA anticipates that AFCEA will be involved
in substantive aspects of the conferences, to include
development of the conference program, as well as matters of
scope, theme, agenda and speakers. As a result, DISA argues that
co-sponsorship of the conference with AFCEA enhances the quality
of the conference for both government and non-government
attendees. Finally, the agency maintains that the JER provides
the agency with authority to enter into co-sponsorship
arrangements for conferences with recognized scientific,
technical, educational or professional organizations. We have
reviewed the record here and we see no basis to question the
agency’s decision that its conference needs would be better
satisfied by continuing its co-sponsor relationship with AFCEA.
Moreover, we note that the JER anticipates this kind of
relationship and recognizes that such co-sponsors can add to the
substance of the event and also provide substantial logistical
support. JER, DOD 5500.7-R, sect. 3-206. (National
Conference Services, Inc. and Direct Marketing Productions, Inc.
d/b/a Technology Forums, Inc., B-311137, April 25, 2008) (pdf)
In a negotiated
procurement, an agency has broad authority to decide whether to
cancel a solicitation, and to do so need only establish a
reasonable basis. The Borenstein Group, Inc., B-309751, Sept.
26, 2007, 2007 CPD para. 174 at 3. We have found a reasonable
basis for the cancellation of an RFP exists where an agency
discovers an existing contract for its requirement that would be
more advantageous to the government than continuing with the
procurement. See Astronautics Corp. of Am., B-222414.2,
B-222415.2, Aug. 5, 1986, 86-2 CPD para. 147 at 2-3. So long as
there is a reasonable basis, an agency may cancel a solicitation
no matter when the information precipitating the cancellation
first arises, even if it is not until proposals have been
submitted and evaluated. Daston Corp., B-292583, B-292583.2,
Oct. 20, 2003, 2003 CPD para. 193 at 3. Mr. Scott contends
that the I-BIZ executive agent services are outside the scope of
the BBA-SME contract. Specifically, the protester contends that
the BBA-SME contract provides for only “expert and advisory
services, with no responsibility for nothing, not for Executive
Agents, who are responsible for program success.” Protester’s
Supplemental Comments at 9. We disagree with Mr. Scott
that the executive agent services solicited by the RFP are not
within the scope of the BBE-SME contract. As noted above, the
RFP sought a bilingual individual with a secret security
clearance and experience to provide expert advice, assistance
and guidance with respect to establishing I-BIZ initiatives. In
addition, the RFP described the executive agent’s services as
including “recommend[ing] policy and at the direction of
[Multi-National Forces - Iraq], initiate Iraqi First and I-BIZ
requirements to address theater wide economic issues.” RFP, SOW,
para. 4.1. Similarly, the BBA-SME contract sought bilingual,
experienced subject matter experts, most of which were required
to have a secret or interim secret clearance to “assess, advice,
and assist commanders in developing and implementing action
plans for specific tasks.” BBA‑SME Contract, SOW, at 2. The
contracts identified the areas in which possible tasks could be
performed as including economic development and commerce;
business development/contracting; and urban
planning/infrastructure engineering. Id. at 9-11. We find from
our review that the fairly broad scope of the BBA-SME contract
statement of work includes the advice and assistance services
sought by the RFP here. We also find reasonable the
agency’s conclusion that it would be more advantageous to obtain
the executive agent services under the existing BBA-SME contract
rather than continuing with its procurement under this RFP. As
noted above, the agency found that the protester’s and the other
offeror’s proposals were deficient, and in particular that Mr.
Scott’s proposal did not demonstrate that he would satisfy the
RFP’s experience, Arabic language, and security clearance
requirements. See Contracting Officer’s Statement at 2. Although
Mr. Scott disagrees with the agency’s evaluation, he does not
establish that the agency’s concerns with his and the other
offeror’s proposals did not provide the agency with a reasonable
basis to conclude it would be more advantageous to use its
existing contract to satisfy these requirements. In addition,
the agency concluded that obtaining these services from the
BBA-SME contract, rather than under the RFP, could result in
cost savings and would relieve the agency of having to
administer two contracts. (Brian
X. Scott, B-310970; B-310970.2, March 26, 2008) (pdf)
After Para Scientific challenged issuance of the order under
that solicitation, the contracting officer reviewed the entire
contract file and determined that there were significant
problems with the solicitation that warranted cancellation. AR
at 7. The contracting officer determined that the agency had (1)
neglected to develop a sole source justification memorandum, (2)
included technical evaluation criteria in the solicitation but
had intended an award based solely on price, (3) included
language in the solicitation that could suggest that “or equal”
products would be considered even though the solicitation was
issued as brand-name only, and (4) failed to permit a
split-award where two disparate items were being solicited. Id.
In light of these issues and Para Scientific’s offer of “or
equal” products, the contracting officer decided to cancel the
solicitation, perform additional market research, and if a brand
name or equal solicitation were warranted, issue a new
solicitation including salient characteristics and all
appropriate contract clauses. Id. at 8. After conducting this
comprehensive review of solicitation No. N00259-07-T-0361, the
contracting officer realized that the same serious concerns
existed with regard to solicitation No. N00258-08-T-0005. SAR at
6. The contracting officer therefore cancelled solicitation No.
N00258-08-T-0005 based on the same rationale: that it was
prudent to investigate whether the specifications could be less
restrictive, and if a brand name or equal solicitation were
warranted, issue a new solicitation including salient
characteristics and all appropriate contract clauses. Id. at
6-7. Para Scientific asserts that the reasonable course of
action for the agency was not to cancel the solicitations, but
rather to issue orders to Para Scientific on the basis of its
lowest priced quotations of technically equal alternative
products. Para Scientific argues that it is being “shunned for
being creative” in offering more economical “or equal” products
where other firms merely offered the brand-name products.
Protest, Nov. 9, 2007, at 2. In response, the agency asserts
that it could not have properly issued orders to Para Scientific
under the solicitations as written, and argues that its decision
to cancel the solicitations was reasonable in view of the
contracting officer’s determination that each solicitation
materially overstated the agency’s requirements and that the
agency could obtain enhanced competition by relaxing the
requirements. We agree.
A contracting agency need only establish a reasonable basis to
support a decision to cancel an RFQ, Surgi-Textile, B-289370,
Feb. 7, 2002, 2002 CPD para. 38 at 2, and may cancel no matter
when the information precipitating the cancellation first
arises, even if it is not until offers (or, as here, quotations)
have been submitted and evaluated. A-Tek, Inc., B-286967, Mar.
22, 2001, 2001 CPD para. 57 at 2-3. A reasonable basis to cancel
exists when a new solicitation presents the potential for
increased competition or cost savings. Robertson Leasing Corp.,
B-275152, Jan. 27, 1997, 97-1 CPD para. 49 at 3. Therefore,
cancellation of a solicitation is proper where the solicitation
materially overstates the agency’s requirements and the agency
desires to obtain enhanced competition by relaxing the
requirements. Id. Here, Para Scientific’s own argument that its
alternative products were technically equal to the agency’s
requirements supports the reasonableness of the agency’s
decision to cancel the solicitations, given that the
solicitations were written as brand-name only requirements.
Because the record reflects that the solicitations’ brand-name
only requirements may have been overly restrictive, and because
the agency identified multiple other flaws in the two
solicitations, we find that the agency’s decision to cancel the
solicitations was proper. (Para
Scientific Company, B-310742.2; B-310903, February 14, 2008)
(pdf)
SuperTec
protests, among other things, that the agency’s cancellation of
RFQ No. 2007Q-025 was merely a pretext to avoid conducting a
competitive procurement and resolving a potential bid protest.
Because we find, based on the specific facts presented, that the
cancellation was improper, we sustain the protest on this basis.
We recognize that contracting agencies generally enjoy broad
discretion in determining whether to cancel a solicitation, and
need only have a reasonable basis for doing so. See, e.g., Surgi-Textile,
B-289370, Feb. 7, 2002, 2002 CPD para. 38 at 2; Encore
Management, Inc., B-278903.2, Feb. 12, 1999, 99-1 CPD para. 33.
In this regard, a contracting agency’s determination that the
integrity of a procurement has been compromised may form a
reasonable basis for cancellation. See Federal Acquisition
Regulation (FAR) sect. 3.104-7. Nonetheless, where a protester
has alleged that an agency’s rationale for cancellation is but a
pretext, that is, the agency’s actual motivation is to avoid
awarding a contract on a competitive basis or to avoid resolving
a protest, we will closely examine the reasonableness of the
agency’s actions in canceling the acquisition. Gonzales-McCaulley
Inv. Group, Inc., B‑299936.2, Nov. 5, 2007, 2007 CPD para. 192
at 5; SMF Sys. Tech. Corp., B-292419.3, Nov. 26, 2003, 2003 CPD
para. 203 at 4-6; Miller, Davis, Marter & Oper, P.C., B-242933,
B‑242933.2, Aug. 8, 1991, 91-2 CPD para. 176 at 4. Further, in
considering a protest raising that concern, we view an agency’s
discretion, though broad, as not unfettered. In that regard, the
overarching guidance of the FAR has direct relevance:
Government business shall be conducted in a manner above
reproach and, except as authorized by statute or regulation,
with complete impartiality and with preferential treatment for
none. Transactions relating to the expenditure of public funds
require the highest degree of public trust and an impeccable
standard of conduct. The general rule is to avoid strictly any
conflict of interest or even the appearance of a conflict of
interest in Government-contractor relationships.
FAR sect. 3.101-1.
Based on the record here, we conclude that the agency did not
have a reasonable basis for canceling the RFQ. Specifically, as
explained above, the COTR disclosed information to ManTech that
she believed may have provided ManTech with an “unfair
advantage.” Thereafter, the agency cancelled the procurement
citing concerns about “the integrity of the pending
procurement,” “potential organizational conflicts of interest,”
and “a possible bid protest”--but then awarded a sole-source
contract for the canceled requirements to a contracting team
that included ManTech. Further, the sole-source award was based
on a ManTech-developed proposal that was substantially similar
to the earlier ManTech proposal for which the COTR suggested
ManTech had obtained an “unfair advantage.” Nothing in the
record indicates that the agency gave any consideration to
whether its contract award to the TMR/ManTech team complied with
statutory or regulatory requirements regarding procurement
integrity or OCIs.[16] See, e.g., 41 U.S.C. sect. 423 (2000);
Federal Acquisition Regulation (FAR) sect. 3.104; FAR Subpart
9.5. More importantly, in light of the integrity concerns
expressed by the agency itself, the cancellation and subsequent
sole-source award to the TMR/ManTech team did nothing to
address, much less remedy, those concerns. In fact, the events,
viewed as a whole, support the protester’s allegation that the
solicitation was cancelled to, in effect, avoid further review
of the issues raised. On this record, the agency did not have a
reasonable basis for canceling the solicitation.
The protest is sustained.
RECOMMENDATION
We recommend that the agency rescind the cancellation notice
regarding RFQ No. 2007Q-025, and document its consideration of
the procurement integrity and/or OCI issues presented by the
COTR’s disclosure of information, as contemplated by the
procurement integrity provisions of the Office of Federal
Procurement Policy Act, 41 U.S.C. sect. 423, and FAR sect.
3.104, and the OCI requirements of FAR Subpart 9.5. In this
regard, the agency’s actions should include, but not necessarily
be limited to, determining what information was disclosed and to
whom, whether ManTech or any other offeror should be
disqualified from the competition, and/or whether a level
playing field can be established by disclosing the information
provided to ManTech to all offerors. Following that
consideration, the agency should conduct a competitive
procurement for the requirements under the original RFQ, if
otherwise appropriate. We also recommend that SuperTec be
reimbursed its costs of filing and pursuing its protest,
including reasonable attorneys’ fees. SuperTec should submit its
certified claim for costs, detailing the time expended and costs
incurred, directly to the agency within 60 days of receipt of
this decision. 4 C.F.R. sect. 21.8(f)(1) (2007). (Superlative
Technologies, Inc., B-310489; B-310489.2, January 4, 2008) (pdf)
Shortly after receiving GMIG’s comments, HHS requested dismissal
of the protest based on a discovery that the acquisition had
been conducted under a delegation of GETA authority that was not
effective as to HHS-U. As previously stated, on April 14, 2003,
the Deputy Assistant Secretary for Program Support in charge of
PSC delegated to the Director of the Human Resources Service the
authority to approve and acquire training through HHS-U under
the GETA acquisition authority. AR, Sept. 10, 2007, Tab 3,
Memorandum, Deputy Assistant Secretary for Program Support.
However, by notice of November 23, 2001, PSC had ceased to be an
OPDIV. 66 Fed. Reg. 58,740 (Nov. 23, 2001). Therefore, according
to HHS, because the authority to redelegate GETA acquisition
authority was based on PSC’s status as an OPDIV, the Deputy
Assistant Secretary for Program Support did not, in 2003, have
the authority to redelegate the approval or acquisition of
training under GETA to the Director of the Human Resources
Service. Thus, the agency asserted that HHS-U lacked the
authority to conduct this acquisition. Because of this, it
rescinded the selections and cancelled this solicitation. On
August 7, our Office dismissed GMIG’s protest as academic due to
the solicitation’s cancellation. On August 8, GMIG
protested that the GETA authority was operational at the time of
GMIG’s selection and, alternatively, that the agency’s decision
to cancel the solicitation was solely for the purpose of having
its protest dismissed. In response, the agency argued that its
decision to cancel was reasonable because the acquisition was
unauthorized as it was conducted under an invalid delegation of
acquisition authority and that the reason for cancellation was
not pretextual. A contracting agency need only establish a
reasonable basis to support a decision to cancel a request for
quotations. SMF Sys. Tech. Corp., B-292419.3, Nov. 26, 2003,
2003 CPD para. 203 at 4. So long as there is a reasonable basis
for doing so, an agency may cancel a solicitation, no matter
when the information precipitating the cancellation first
arises, even if it is not until quotations have been submitted
and evaluated. Id. As here, however, where a protester has
alleged that the agency’s rationale for cancellation is but a
pretext to avoid awarding a “contract” on a competitive basis or
to avoid the resolution of a protest, we will closely examine
the reasonableness of the agency’s actions in canceling the
solicitation. Id.; Griffin Servs., Inc., B-237268.2 et al., June
14, 1990, 90-1 CPD para. 558 at 3, aff’d, General Servs.
Admin.--Recon., B-237268.3 et al., Nov. 7, 1990, 90-2 CPD para.
369. In cases where we conclude that the agency’s rationale for
cancellation is merely a pretext, we will recommend appropriate
corrective action. See Griffin Servs., Inc., supra, at 3-4;
Miller, Davis, Marter & Opper, P.C., B-242933, B-242933.2, Aug.
8, 1991, 91‑2 CPD para. 176 at 4. Here, it appears from the
record that HHS is correct in its assertion that the GETA
acquisition authority had not been validly delegated to HHS-U.
We believe that this lack of authority would ordinarily provide
a reasonable basis to cancel a solicitation. However, based on
our review of HHS’s actions here, we conclude that the
cancellation of this solicitation was pretextual. The record
shows that this was the only acquisition, out of the hundreds
that had been conducted by HHS-U without properly delegated
authority, that was cancelled when HHS became aware of the lack
of authority, even though a number of the other HHS‑U
acquisitions were ongoing. See AR, Oct. 12, 2007, Declaration of
HHS Director, Division of Acquisition Policy, at 5. We recognize
that HHS asserted in its response to our Office’s inquiry that
it “expect[ed] and intend[ed] that HHS-U would cancel all
outstanding requests for quotations for training services,” but
that it apparently had not “adequately communicated [this]
expectation” to HHS-U. Id. However, whether expected or not,
this did not occur. Thus, we find on this record that HHS’s
cancellation appears to be, as the protester contends,
essentially a pretext to avoid further scrutiny and review of
its protest. (Gonzales-McCaulley
Investment Group, Inc., B-299936.2, November 5, 2007) (pdf)
In a negotiated procurement, an agency has broad authority to
decide whether to cancel a solicitation, and to do so need only
establish a reasonable basis. VSE Corp., B-290452.2, Apr. 11,
2005, 2005 CPD para. 111 at 6. A reasonable basis for the
cancellation of an RFP exists when an agency discovers an
existing contract for its requirement that would be more
advantageous to the government than continuing with the
procurement. See Astronautics Corp. of Am., B-222414.2,
B-222415.2, Aug. 5, 1986, 86-2 CPD para. 147 at 2-3. In this
case, OCAR discovered that an existing contract encompassed its
requirements, determined that the existing contract was more
advantageous than continuing with the planned negotiated
procurement, and on that basis cancelled the RFP. We conclude
that OCAR’s decision had a reasonable basis. Although it is
unfortunate that an apparent lack of coordination at OCAR
prevented this RFP from being cancelled earlier, an agency
properly may cancel a solicitation no matter when the
information precipitating the cancellation first surfaces or
should have been known, even if the cancellation occurs after
proposals have been submitted. Daston Corp., B-292583,
B-292583.2, Oct. 20, 2003, 2003 CPD para. 193 at 3. (The
Borenstein Group, Inc., B-309751, September 26, 2007) (pdf)
The
Bureau of the Public Debt awards and administers contracts on
behalf of Treasury’s FedSource branch offices, which operate as
part of the agency’s franchise fund. The franchise fund
primarily provides contracting services (including
administrative and financial services) to federal agencies on a
reimbursable basis. The RFP, issued on May 30, 2006,
contemplated multiple awards of
indefinite‑delivery/indefinite-quantity contracts for a base
period, with 5 option periods, for support services to be
provided under FedSource’s Administrative/ Clerical and Light
Industrial business line. Work under the RFP was to be obtained
through task orders that would specify the task, location,
service to be provided, period of performance, and performance
measures. RFP at 2. Cancellation is appropriate where an agency
conducts a reassessment that suggests the solicitation may not
reflect its needs, such that the agency is uncertain whether the
requirement will exist in the future. Peterson-Nunez Joint
Venture, B‑258788, Feb. 13, 1995, 95-1 CPD para. 73 at 4-5. This
is the case here. BPD’s review brought into question whether it
would continue to support FedSource; since this uncertainty
could be resolved in favor of discontinuing the relationship--in
which case the services covered by the RFP would no longer be
required--it provided a reasonable basis for the agency to
cancel the solicitation. While, as the protester argues, the
services that would be provided under this contract will still
be needed by customer agencies in the future, it is BPD’s need
for these services to support the FedSource program--not the
government’s needs as a whole--that is controlling for purposes
of determining whether the cancellation was permissible. Again,
since, based on BPD’s review, it was questionable whether the
agency would continue to need the services under the RFP, the
agency had a sufficient basis to cancel the solicitation. Id.;
Dr. Robert J. Telepak, B‑247681, June 29, 1992, 92-2 CPD para. 4
at 4. (Global Solutions Network, Inc.,
B-299424, April 20, 2007) (pdf)
In a negotiated procurement, where one or more of the offerors’
prices have been revealed, an agency may properly cancel a
solicitation where the record contains plausible evidence or
reflects a reasonable possibility that a decision not to cancel
would be prejudicial to the government or the integrity of the
procurement system. Noelke GmbH, B-278324.2, Feb. 9, 1998, 98-1
CPD para. 46 at 3-4. Here, we conclude that the agency’s
decision to cancel the solicitation was proper. First, the
record shows that the agency’s needs had changed because it
could no longer make good use of the phase-in and readiness
provisions so late in the hurricane season and that any
amendment to the solicitation to delete these requirements would
have been so substantial that offerors could not have reasonably
anticipated the changes. An agency has a reasonable basis to
cancel a solicitation where, as here, it determines that a
solicitation does not accurately reflect its needs. Logistics
Solutions Group, Inc., B-294604.7, B-294604.8, July 28, 2005,
2005 CPD para. 141 at 3. Second, the agency states that, by
waiting to reissue the solicitation to coincide with the start
of the 2007 hurricane season, it could avoid paying start-up
costs for base camps that would have seen limited use in the
2006 hurricane season. Cost savings through a restructuring of
the agency’s requirements also constitute a reasonable basis to
cancel a negotiated procurement, even after the agency has
entered into negotiations with the potential awardee. Capitol
Gateway Assocs. Ltd. P’ship, B-255587, Jan. 24, 1994, 94-1 CPD
para. 37 at 2-3. Third, the agency asserts that its plan to
eliminate the requirement that the offerors be prepared to
operate five base camps simultaneously will increase competition
by fostering the involvement of smaller firms capable of
performing contracts of a more limited scope. The ability to
enhance competition is a reasonable basis to justify the
cancellation of the solicitation. Id. at 3. In fact, as the
agency notes, when “an amendment proposed for issuance after
offers have been received is so substantial as to exceed what
prospective offerors reasonably could have anticipated,” and
competition would be enhanced if the contacting officer canceled
the solicitation and issued a new one, the agency is required to
cancel the solicitation. Federal Acquisition Regulation sect.
15.206(e). In summary, the record supports the agency’s
assertions that its decision to cancel rather than amend the
solicitation will assist the agency in controlling costs and
fostering competition through a solicitation that more
accurately reflects the agency’s needs; each of these reasons
supports a finding that the agency’s cancellation decision was
proper. (SEI Group, Inc.,
B-299108, February 6, 2007) (pdf)
A contracting agency need only establish a reasonable basis to
support a decision to cancel an RFP. In this regard, so long as
there is a reasonable basis for doing so, an agency may cancel a
solicitation no matter when the information precipitating the
cancellation first arises, even if it is not until proposals
have been submitted and evaluated. Glen/Mar Constr., Inc.,
B-298355, Aug. 3, 2006, 2006 CPD para. 117 at 2. Here, given
that, as explained below, the agency was required to purchase
the indicator control subassemblies from FPI, the agency acted
reasonably in canceling the RFP. Agencies are required to
purchase supplies manufactured by FPI where, after conducting
market research, the agency determines that supplies produced by
FPI are comparable to those of the private sector in terms of
price, quality, and time of delivery. FAR sect. 8.602(a)(1),
(3). While the record reflects that the agency did not consider
FPI as a source for the indicator control subassemblies prior to
issuance of the RFP, and thus did not conduct market research in
advance of the RFP, upon realizing that FPI was a potential
source for the indicator control subassemblies, the contracting
officer properly took steps required by the FAR to determine
whether FPI’s item was comparable to that of the private sector
in terms of price, quality, and time of delivery. Upon
concluding that they were comparable, the contracting officer
was required to purchase the subassemblies from FPI and cancel
the RFP. To the extent the protester argues that the RFP should
have been issued as a HUBZone set-aside, the argument is without
merit. FAR sect. 8.602(a)(3) specifically provides that where an
FPI item is determined to be comparable, the agency “shall . . .
purchase the item from FPI.” An agency may only acquire an item
produced by FPI using “competitive procedures,” including the
HUBZone set-aside procedures set forth under FAR Subpart 19.13,
where the agency determines that the FPI item is not comparable
in one or more of the areas of price, quality, and time of
delivery. FAR sect. 8.602(a)(4); FAR sect. 19.1304(a)(1)
(stating that the HUBZone provisions do not apply to
requirements that can be satisfied through award to FPI). Since
the contracting officer’s market research indicated that FPI’s
subassemblies were comparable in all respects, setting aside the
requirement for HUBZone small business concerns was not an
option for procuring the items. (Management
Solutions, L.C. d/b/a EssTech Engineering, B-298883;
B-298883.2, December 13, 2006) (pdf)
Starlight Corporation, Inc. protests that the Department of the
Air Force improperly canceled request for proposals (RFP) No.
FA4479-05-R-0001, for aircraft services at McChord Air Force
Base, Washington. The agency now concedes that the solicitation
could be read as requiring this experience, even though it did
not intend this to be the case. The agency states that so long
as the offeror demonstrated in its proposal that it had the
capability of performing these services it should be considered
technically acceptable. In this regard, the agency expresses
concern that given the emphasis on experience in the
solicitation, offerors without experience may have been
discouraged from submitting proposals, even though they may have
otherwise been able to submit technically acceptable proposals.
As indicated by the above discussion, our review of the record
confirms the agency’s conclusion that the solicitation was
either ambiguous with regard to whether experience was required,
or overstated the agency’s minimum needs by requiring
experience, when, in fact, what the agency intended to require
was for the offeror to demonstrate in its proposal that it had
the capability of performing these services in order to be found
acceptable.[4] While the protester states that there is no
evidence that competition was inhibited by the potential
requirement that certain experience was required given the large
number of proposals submitted, the record evidences that Empire
may have prepared its proposal with the belief that the
competition was with offerors who had this experience, and we,
therefore, find the competition may have been prejudiced by this
ambiguity. (Starlight Corporation,
Inc., B-297904.2, April 14, 2006) (pdf)
Regarding the firm’s challenge to the agency’s cancellation of
the procurement, in a negotiated procurement, such as here, a
contracting agency need only establish a reasonable basis to
support a decision to cancel an RFP. PBSI Corp., B-227897, Oct.
5, 1987, 87-2 CPD para. 333 at 2. It is well established that an
agency’s lack of funding for the procurement provides a
reasonable basis for its cancellation, as agencies cannot award
contracts which exceed available funds. Quality Support, Inc.,
B-296716, Sept. 13, 2005, 2005 CPD para. 172 at 2. Here, the
agency explains that the protester’s proposed price
substantially exceeds the agency’s funding for the project.[2]
Accordingly, the cancellation clearly was reasonable, since an
award was not possible within available agency funds. See First
Enter., B-292967, Jan. 7, 2004, 2004 CPD para. 11 at 3. (Ystueta
Inc., B-296628.4, February 27, 2006) (pdf)
A contracting agency need only establish a reasonable basis to
support a decision to cancel a request for quotations. Quality
Tech., Inc., B-292883.2, Jan. 21, 2004, 2004 CPD para. 29 at 2.
An agency’s lack of funding for a procurement provides a
reasonable basis for cancellation, as agencies may not award
contracts that exceed available funds. Quality Support, Inc.,
B-296716, Sept. 13, 2005, 2005 CPD para. 172 at 2. Here, the
agency states that funds for the procurement at issue have been
withdrawn and the solicitation has been cancelled, and has
submitted documents showing that the funds are no longer
available. Under these circumstances, we have no basis to object
to the cancellation. IVI contends that the lack of funding is a
pretext and in fact the agency cancelled the solicitation in
order to avoid addressing the issues in IVI’s initial protest.
In this regard, we recognize that the notice posted on the
FedBizOpps website announcing the cancellation states that the
solicitation was cancelled “due to protest.” Even assuming,
however, that the agency’s decision to withdraw funding and
cancel the solicitation was triggered by the initial protest, we
fail to see any basis to conclude that the cancellation was
improper. The management of an agency’s funds generally depends
on the agency’s judgment concerning which projects should
receive funding and a contracting agency has the right to cancel
a solicitation when, as a result of its allocation
determinations, funds are no longer available. First Enters.,
B-292967, Jan. 7, 2004, 2004 CPD para. 11 at 3. In the absence
of a showing of bad faith on an agency’s part in connection with
a funding decision (which is neither alleged nor otherwise
evident here), there is no basis to require an agency to go
forward with a procurement which it has decided not to fund,
even if the decision to cancel was prompted by a protest
concerning the solicitation. See James M. Carroll—Recon.,
B-221502.3, Mar. 24, 1986, 86-1 CPD para. 290 at 3. Regarding
the protester’s argument that funding for the requirement was
withdrawn after--and thus could not have resulted
in--cancellation of the solicitation, the order in which the two
events occurred is irrelevant given that we will not recommend
that an agency proceed with an acquisition for which no funding
is available. See Greenway Enters., Inc., B-238943.2, May 4,
1990, 90-1 CPD para. 454 at 2. (Information
Ventures, Inc., B-297815.2, February 13, 2006) (pdf)
As noted, a reasonable basis to cancel exists where a
solicitation does not accurately reflect the agency’s
requirements. The fact that NASA found that the RFP may not
accurately reflect its requirements, and that it needed to fully
consider and resolve questions regarding its LN2 requirements
that were not considered at the time the RFP was issued,
constituted a reasonable basis to cancel the RFP. While the
protesters attack NASA’s motives as merely capitulating to
political pressure on behalf of a particular constituent, we
find nothing questionable about NASA responding appropriately to
the concerns expressed by representatives of Congress, which has
oversight authority. Based on our review of the record, NASA has
established that it has legitimate reasons for reviewing its
requirements before proceeding with this procurement and thus a
reasonable basis to cancel the RFP while it does so. See Global
Solutions Network, Inc., B-290107, June 11, 2002, 2002 CPD para.
98 at 3-5. Nevertheless, Kenco and Air Products question the
timing of the agency’s decision to cancel, given that it was
made after each had expended considerable resources to address
the RFP, and because no mention was made to the offerors of the
SCAP prior to the cancellation, and because all the agency’s
prior studies concluded that building a LN2 plant was in the
government’s best interest. The protesters argue that they
should at least be entitled to recover their proposal
preparation costs, given the agency’s actions. However, as long
as an agency has a reasonable basis to cancel, it may properly
cancel a solicitation no matter when the information
precipitating the cancellation first surfaces or should have
been known. See The Potomack Partnership, B-252860, Aug. 3,
1993, 93-2 CPD para. 75 at 4 (cancellation after receipt but
without evaluating proposals); see also Global Solutions
Network, Inc., supra (cancellation prior to receipt of
proposals). Given that NASA promptly canceled the RFP when it
learned that there were reasons for questioning its
requirements, we have no reason to question the agency’s actions
here. (Kenco Associates, Inc.; Air
Product and Chemicals, Inc., B-297503; B-297503.2, January
25, 2006) (pdf)
While the agency has asserted several reasons for canceling the
RFQ, it is well established that an agency’s lack of funding for
a procurement provides a reasonable basis for cancellation, as
agencies cannot award contracts which exceed available funds.
First Enter., B-221502.3, Mar. 24, 1986, 86-1 CPD para. 290 at
3. While the VA concedes that the procurement was flawed and
that there was a misunderstanding between the contracting
officer and the program office as to this procurement, as
discussed above, the record shows that there are no funds
available for this requirement. Moreover, the contracting
officer reports that, based on his discussions with the program
office, it is not clear that the VA had any definite
requirements for conferences at the time it issued the RFQ. The
contracting officer states that he has again discussed this
matter with the program office and the program office has
confirmed that, in addition to a lack of funding, there is no
current requirement for the conference planning and support
services solicited under the RFQ. Supplemental Agency Report at
6. While we do not condone the program office’s apparently
erroneous decision to prepare a procurement request that led to
the issuance of this RFQ, nonetheless, the record does support
the contracting officer’s decision to cancel the RFQ. (Quality
Support, Inc., B-296716, September 13, 2005) (pdf)
The Air Force indicates here, however, that an MOA, which is an
internal Air Force document, would not necessarily state every
requirement stated in the RFP’s statement of work. In this
regard, the Air Force advises that the Bandit Dining Facility
where the 28th SVS Squadron serves the meals is a hardened
facility, and that the Squadron is required to observe the Air
Force’s own training and quality assurance requirements that are
consistent with the RFP’s Statement of Work requirements. As
noted above, the estimate for the hardened facility is expressly
included in the government estimate. Moreover, Cattlemen’s has
not rebutted the agency’s explanation or shown that any
incremental quality assurance and training costs are not
included in the government estimate. In addition, the Air Force
indicates that the requirement that a private-sector contractor
provide its own hardened facility, including electrical
capacity, was necessary because the Bandit Dining Facility is a
military facility currently in use for other operations, such
that a contractor cannot use them to satisfy these RFP
requirements, and because the safety factors related to wind
velocity exceeding 60 miles per hour, with gusts between 80 and
90 miles per hour, in South Dakota require a hardened facility.
Supplemental Agency Report at 1‑2. Thus, the protester’s
reference to the omitted requirements in the MOA does not
demonstrate that the government estimate was other than
realistic and fair, or that the comparison of the estimate with
the protester’s proposal was unequal or improper. In addition,
we note that Cattlemen’s has not questioned any of the specific
elements in the government estimate as understated, and on this
record we have no basis to find that the estimate was other than
realistic and fair. Under the circumstances, we believe the
agency reasonably determined that the protester’s proposed
price, as compared to the government estimate, was excessive,
and that the agency therefore had a reasonable basis to cancel
the RFP in order to obtain the services in-house. (Cattlemen's
Meat Company, B-296616, August 30, 2005) (pdf)
A contracting agency need only establish a reasonable basis to
support a decision to cancel an RFQ; in this regard, so long as
there is a reasonable basis for doing so, an agency may cancel a
solicitation no matter when the information precipitating the
cancellation first arises, even if it is not until quotations
have been submitted and evaluated. Quality Tech., Inc.,
B-292883.2, Jan. 21, 2004, 2004 CPD para. 29 at 2-3; DataTrak
Consulting, Inc., B-292502 et al., Sept. 26, 2003, 2003 CPD para.
169 at 5. It is well-established that lack of funding for a
procurement provides a reasonable basis for cancellation, as
agencies cannot award contracts which exceed available funds.
First Enter., B-292967, Jan. 7, 2004, 2004 CPD para. 11 at 3-4;
James M. Carroll--Recon., B‑221502.3, Mar. 24, 1986, 86-1 CPD
para. 290 at 3. Further, an agency may properly cancel a
solicitation due to funding limitations regardless of any
challenge to the validity of the agency’s underlying cost
estimate which, as in this case, served as the basis for the
funding amount; as stated above, agencies simply cannot create
obligations that exceed available funds. See National Projects,
Inc., B‑283887, Jan. 19, 2000, 2000 CPD para. 16 at 4.
Accordingly, given that all the quotations received here
exceeded available funding for the work, we see no basis to
question the propriety of the agency’s decision to cancel the
RFQ. (Firetech Automatic Sprinkler,
B-295882, May 4, 2005) (pdf)
Here, the record contains no evidence, or even argument, that
the government or the integrity of the procurement system would
be prejudiced if the RFP were not cancelled and award were made
thereunder. VA’s only asserted basis for cancellation is that
the RFP did not contain evaluation factors. However, where, as
here, a negotiated procurement does not provide technical
evaluation factors, award is to be made to the responsible
offeror with the lowest-priced, technically acceptable offer.
See Omatech Serv. Ltd., B-254998, B-254998.2, Dec. 17, 1993,
93‑2 CPD para. 329 at 3. Thus, the competition for award under
the RFP was solely based on price. The agency does not assert
that it will change any of its requirements but will issue an
IFB, under which the sole basis for award is price, for the same
requirements. Thus, since the basis for award under the RFP and
IFB would be the same, the agency lacks a reasonable basis to
cancel the RFP. Moreover, not only is neither the government nor
the integrity of the competitive procurement system prejudiced
by not cancelling the RFP here, but Rand & Jones, whose low
competitive price for this same requirement has been been
publicly disclosed, would be prejudiced if this requirement were
recompeted on the basis of price. (Rand
& Jones Enterprises Company, Inc., B-296483, August 4, 2005)
(pdf)
Since it is apparent from the record that the agency's
requirements have changed substantially from those solicited, we
find the Army's decision to cancel and resolicit was reasonable.
The protester's mere disagreement with the agency's otherwise
reasonable bases for cancellation provides no basis to question
the propriety of that cancellation. Nor is there any evidence in
the record supporting the protester's contention that the
proffered rationale for cancellation is merely a pretext by the
agency to manipulate the procurement process because, as part of
the October 21, 2004 corrective action, the agency had agreed to
reevaluate proposals. Government officials are presumed to act
in good faith and, where a protester contends that contracting
officials are motivated by bad faith, it must provide convincing
proof, since our Office will not attribute unfair or prejudicial
motives to procurement officials on the basis of inference and
suppositions. American Artisan Prods., Inc., B-292559,
B-292559.2, Oct. 7, 2003, 2003 CPD paragraph 176 at 9; Chenega
Mgmt., LLC, B-290598, Aug. 8, 2002, 2002 CPD paragraph 143 at 4.
Here, other than innuendo, Logistics has provided no support for
its bad faith allegation. In any event, an agency may cancel a
solicitation no matter when the information precipitating the
cancellation first arises. DataTrak Consulting, Inc. , B-292502
et al. , supra , at 5. To the extent Logistics argues that the
Army should have amended rather than cancel the original
solicitation, this argument is without merit. See Protester's
Comments at 4-5. Federal Acquisition Regulation Section
15.206(e) requires the contracting officer to cancel the
original solicitation and issue a new one, if an amendment would
be so substantial as to exceed what prospective offerors
reasonably could have anticipated. On the basis of the record
before us, we think the changes in the agency's current minimum
needs fall within this provision. See VSE Corp. , B-290452.2,
Apr. 11, 2005, 2005 CPD paragraph 111. (Logistics
Solutions Group, Inc., B-294604.7, B-294604.8, July 28,
2005) (pdf)
Here, we find that the record demonstrates that the agency
reasonably decided to cancel this RFP. The reduced scope of work
associated with severing certain requirements to avoid possibly
improper bundling and the removal of the requirement to provide
a storage facility, due to the GOCO, meant that the current RFP
did not reflect the agency's requirements. In addition, because
of the time which has elapsed from the initial issuance of the
solicitation in March 2000 until the cancellation in December
2004, and the numerous changes made to the RFP during that
period, we find that the agency's assumption that additional
firms may well be interested in participating in a competition
based on a solicitation reflecting the agency's current
requirement, with the result that competition may be increased,
is reasonable. Where, as here, a solicitation no longer
accurately reflects an agency's requirements, and resolicitation
could result in increased competition, the cancellation of the
solicitation is appropriate. See Global Solutions Network, Inc.
, supra . As detailed above, the CBP found that cancellation of
the RFP was more feasible than issuing another amendment because
it was still trying to resolve its responsibilities, as well as
to determine the best method for procuring the requirement,
given its reorganization and its failure to resolve with the
TEOAF how this evolving requirement should be procured. Although
VSE suggests otherwise, the numerous prior amendments to the RFP
do not preclude the CBP from canceling the RFP. The only
pertinent inquiry here is whether there existed a reasonable
basis to cancel, since an agency may cancel at any time when
such a basis is present. Since the record here reflects that
there was a reasonable basis to cancel the RFP, we do not find
that the agency abused its discretion, even though it may have
taken a different course by further amending the RFP. See PBSI
Corp., B-227897, Oct. 5, 1987, 87-2 CPD 333 at 2. In this
regard, the CBP advises that it initially believed the changes
could be addressed via amendments . . . since CBP and the
offerors had already put so much effort into the solicitation
but instead of continuing to try to force the agency's
developing needs into the old solicitation with the full
knowledge that scope-changing modifications and/or a termination
for convenience are inevitable, the agency decided to cancel and
re-evaluate the work. See Agency Report at 24-25. In any case,
Federal Acquisition Regulation (FAR) 15.206(e) specifically
advises that if, in the judgment of the contracting officer,
based on market research or otherwise, an amendment proposed for
issuance after offers have been received is so substantial as to
exceed what prospective offerors reasonably could have
anticipated, so that additional sources likely would have
submitted offers had the substance of the amendment been known
to them, the contracting officer shall cancel the original
solicitation and issue a new one, regardless of the stage of the
acquisition. Consistent with this regulation, and in light of
the many significant amendments since initial proposals were
obtained, the agency's decision to cancel and resolicit was the
appropriate course to take. (VSE
Corporation, B-290452.2, April 11, 2005) (pdf)
Here, we find that the cancellation of the RFQ was entirely
appropriate. It is undisputed that the drawings upon which
Supreme would rely in producing the light plates is at a lower
revision level--level "AK"--than the level currently specified
for this item. Although Supreme argues that the difference in
revision level does not affect "fit, form or function," DCSR
states that it does not know the impact, if any, of the
difference in revision levels. In this regard, there is no
information in the record regarding the difference between the
two revision levels. Also, the RFQ failed to include the
required DLA clause that instructs vendors offering alternate
products to provide information and/or data to show that its
product is interchangeable with the exact item specified in the
solicitation. Under these circumstances, we find the agency
reasonably cancelled the solicitation. Cancellation of the
solicitation provides Supreme with an opportunity to determine
whether it can offer the exact part sought by the agency--that
is, a part manufactured to revision level "AL"--or to qualify an
alternate part. (Supreme Edgelight
Devices, Inc., B-295574, March 4, 2005) (pdf)
Here, we see no basis for GSA's decision to cancel the SFO. The
agency has been unable to articulate how the alleged difference
between the "price" and "percentage" methodologies supports its
position that Greenlee may not have submitted the lowest price
under this SFO. The two analyses GSA has provided in the record
were both so flawed as to provide no support for the agency's
position. First, GSA apparently relied on an analysis applying
the offerors' base year discounts to a single8.63 item under
partition work. That analysis was not representative of the work
to be performed because it was based only on base year discounts
and ignored the asbestos work required under the SFO. GSA's
second analysis relied on a split between the partition and
asbestos work that was grossly inconsistent with the split
specified in the SFO. Even if we assume that there is a
difference between a price-based methodology and a
percentage-based one under the SFO, the agency has not furnished
a reasonable price analysis to support the conclusion that the
protester was not the lowest-priced offeror under either of
those methodologies. Since the agency justified cancellation
only on a claim that the two methodologies generated different
results, and that claim was unsupported, the agency has failed
to provide any basis for the cancellation. (Greenlee
Construction, Inc., B-294338, October 26, 2004) (pdf)
Under FAR 15.206(e), where a contracting officer determines that
an amendment to a solicitation requirement after offers have
been received is so substantial as to exceed what prospective
offerors reasonably could have anticipated, so that additional
sources likely would have submitted offers had the substance of
the amendment been known to them, the solicitation must be
canceled and all interested firms given an opportunity to
respond to the changed requirement. See The New Jersey & H St.
Ltd. P'ship , B-288026, B288026.2, July 17, 2001, 2001 CPD 125
at 3-4. Our review of the record confirms that the challenged
amendment falls outside of this provision as it is neither
substantial nor beyond that which prospective offerors
reasonably could have anticipated. (Government
Contract Services Company, B-294367, October 25, 2004) (pdf)
To the extent that the protester is arguing that cancellation of
the RFP is improper because the agency still intends to procure
new equipment fielding services, its argument ignores the
essence of the agency's justification for cancellation, which is
that, in light of recent developments, including the shift to
modularity, the agency's needs will not be met by contracting
for new equipment fielding services separately from force
modernization planning, unit set fielding, and configuration
management services. In other words, the agency's justification
for cancellation is not that new equipment fielding services are
no longer required; it is that it has determined that its needs
require the award of a single contract for a range of services
rather than separate contracts for each type of service.
According to the agency:
Fieldings, reconfiguration, [and] modernization will occur at
many points in the [expeditionary] cycle and will not be the
linear process as currently designed. That is why the separate
functions of fielding, planning, management, configuration
management, force modernization, and unit set fielding must be
integrated under a single organization that provides unified
command and control of the contractor assets and maximizes
[the agency's] flexibility in shifting expertise across this
spectrum of requirements. The synchronization of these efforts
with installation, infrastructure, training, logistics,
personnel and other key enablers will also be essential -- and
is much broader than the vertical stove-pipe fielding only
solution offers.
Contracting Officer's Statement, Sept. 14, 2004, at 2. Where, as
we believe is the case here, an agency reasonably determines
that an RFP does not accurately describe its needs, cancellation
of the solicitation is appropriate. Source AV, Inc. , B-241155,
Jan. 25, 1991, 91-1 CPD 75 at 3. (ELEIT
Technology, Inc., B-294193.2, September 30, 2004) (pdf)
Here, we find that the Coast Guard had a reasonable basis to
cancel the solicitation. As explained by the agency, and
apparently conceded by the protesters, while the Coast Guard
sought the submission by offerors of 12 different training meal
menus, each consisting of breakfast, lunch and dinner, the
solicitation did not clearly provide for this. Accordingly, the
solicitation was flawed in this regard. Additionally, although
the Coast Guard sought proposals that included detailed
nutritional information for the food items comprising the menus
in order for the agency to ensure that the nutritional needs of
Coast Guard personnel would be met by the selected offeror, the
agency reasonably concluded based upon its review of the RFP,
and in light of the proposals received, that the RFP failed to
adequately convey this to the offerors. We note that the
agency's conclusion in this regard is consistent with the
position of Watson and Rice in their initial protests to our
Office, where they argued that the agency, in downgrading
proposals that did not include specific nutritional information,
was improperly imposing a requirement that was not set forth in
the solicitation. Rice Protest, B-293861, at 4; Rice Protest,
B-293861.3, at 3; Watson Protest, B293861.2, at 11. In sum, the
solicitation failed to adequately set forth the agency's needs
with regard to training meal menus and nutritional information
regarding the menu items proposed, and the agency's cancellation
of the solicitation is thus unobjectionable. In reaching this
conclusion, we have considered Watson's argument that the
cancellation of the solicitation was only a pretext, that is,
that the agency's motivation in fact was to avoid awarding a
contract on a competitive basis. Watson Comments at 4-5. We have
closely examined the reasonableness of the agency's actions and,
as set forth above, find the cancellation to be reasonable in
light of the provisions of the solicitation that were, as
conceded by Watson, ambiguous or requiring clarification. Id. at
10-14; see SMF Sys. Techs. Corp. , B292419.3, Nov. 26, 2003,
2003 CPD 203 at 4. For example, in arguing that the agency's
evaluation of its proposal under the food/menus/table service
evaluation subfactor was unreasonable, the protester comments
that [o]nce again, the Agency is penalizing Watson for its own
inability to clearly draft a Solicitation which elicits the same
response from all offerors. Watson Comments at 13-14. Further,
the fact that the Coast Guard discovered the above-noted
deficiencies in the RFP after the SBA found Wolf ineligible for
award, and did not assert that these deficiencies justified the
cancellation of the solicitation until it filed its agency
report in response to the protests, does not preclude
cancellation of the RFP. An agency may properly cancel a
solicitation regardless of when the information precipitating
the cancellation arises. Admiral Towing and Barge Co. ,
B-245600; B-245602, Jan. 16, 1992, 92-1 CPD 83 at 6; see Rice
Servs., Ltd. , supra , at 8 (the tardiness of the agency's
determination that a solicitation should be cancelled does not
alter the overriding principle that an agency should not proceed
with a procurement when it reasonably believes that the
resulting contract will fail to meet the agency's requirements).
(Rice Services, Inc.; Watson
Services, Inc., B-293861; B-293861.2; B-293861.3;
B-293861.4, June 15, 2004) (pdf)
Asserting
contract avoidance, promissory estoppel, and quantum meruit ,
the protester essentially argues that the agency's decision to
cancel the RFQ was arbitrary and capricious. [2] A contracting
agency need only establish a reasonable basis to support a
decision to cancel an RFQ. DataTrak Consulting, Inc. , B-292502
et al. , Sept. 26, 2003, 2003 CPD 169 at 5. So long as there is
a reasonable basis, an agency may cancel a solicitation no
matter when the information precipitating the cancellation first
arises, even if it is not until offers (or, as here, quotations)
have been submitted and evaluated. Id. In this case, the USTDA
indicates that it canceled the RFQ because it decided to perform
the analysis, grant, and audit services in-house and, as a
result, there was no longer a need for a contractor to perform
the services. Our review of the record provides no basis for us
to question the reasonableness of the agency's decision in this
regard. Id. (denying protest of solicitation cancellation where
the agency indicated that the services were no longer needed
because they would be performed in-house). (SKJ
& Associates, Inc., B-294219, August 13, 2004) (pdf)
The
agency, however, indicates that the FedSource-Denver
solicitation will not meet its needs because the aggregate
dollar ceiling of250 million is not sufficient to satisfy the
requirements for all nine FedSource offices for a base year,
which the agency estimates to be approximately $300 million
annually for both fiscal years 2004 and 2005, or for the 5-year
period from fiscal year 2005 through 2009, which the agency
estimates as more than $2 billion. Global argues that the
government's estimate for fiscal year 2004 is overstated and
maintains that the agency could use the subject solicitation to
meet its requirements for a base-year period by issuing task
orders for the entire $250 million in that year. [5] Other than
the protester's speculation, however, there simply is nothing in
the record that casts material doubt on the agency's estimates
of its requirements. Moreover, even assuming that the current
solicitation was capable of meeting the agency's requirements
for a base year, the agency has indicated that it requires a
support service contract capable of servicing the nine FedSource
offices on a consolidated basis for the next 5 years, with a
dollar ceiling in excess of2 billion, and that the agency
expects to issue such a solicitation within the next few months.
[6] The protester does not argue or suggest that the subject
solicitation is capable of meeting such a requirement. Since the
agency's consolidated needs for a base year plus option years
clearly exceed the scope of the current solicitation, the agency
reasonably canceled the RFP in favor of a solicitation that is
consistent with the agency's contract consolidation effort and
with the magnitude of the combined requirement. See id. ; USA
Elecs. , B-283269.2, Oct. 5, 1999, 99-2 CPD 67 (holding that
agency reasonably canceled solicitation where the agency's
requirements had increased). (Global
Solutions Network, Inc., B-294054; B-294054.2, August 10,
2004) (pdf)
As previously noted, the contracting officer cites two bases for
his decision to cancel: (1) his recognition that the RFP did not
furnish sufficient guidance as to required staffing levels,
leading many offerors to propose staffing numbers (for
individual categories of support and/or for overall performance)
that the evaluators judged inadequate, resulting in downgrading
of the proposals’ ratings under the technical approach subfactor;
and (2) notification from the user activity of a significant
reduction in its staffing requirement. With regard to the first
basis, we agree with the protester that the agency’s argument
that the solicitation failed to furnish sufficient guidance to
offerors by failing to state the minimum acceptable staffing
level for each category of support is undercut by the fact that
the RFP, as re-issued, also fails to include these numbers;
while the draft version of the revised SOW, dated March 23,
2004, included “minimum coverage” staffing numbers, the final
version included in the re-issued RFP does not. The record
nonetheless demonstrates that there were ambiguities regarding
required staffing coverage in the cancelled solicitation that
had an impact on the evaluation of proposals and thus provide a
reasonable basis for cancellation. In this regard, the existence
of an ambiguity affecting the competition under an RFP furnishes
a reasonable basis for cancellation of the solicitation. A-Tek,
Inc., B-286967, Mar. 22, 2001, 2001 CPD ¶ 57 at 2-4.
Notification from the user activity as to a significant
reduction in its staffing requirement furnished a second
reasonable basis for cancellation. Cancellation of a
solicitation is appropriate where an agency finds that its needs
are no longer accurately reflected by an RFP, such as when there
is a significant reduction in the anticipated workload. PAI
Corp. et al., B-244287.5 et al., Nov. 29, 1991, 91-2 CPD ¶ 508
at 4; Dynalectron Corp., B-216201, May 10, 1985, 85-1 CPD ¶ 525
at 4. In sum, the revised RFP reflects a change in required
hours of coverage for these 10 categories from between 1,048 and
1,248 hours per week in the canceled RFP, to 840 hours per week
in the revised SOW; this reduction in hours (between 208 and 408
hours per week) translates to a reduction of between 5 and 10
employees (out of a total in all 14 categories of at most 39
employees). In our view, a reduction of that magnitude cannot be
characterized as minimal. (Superlative
Technologies, Inc., B-293709.2, June 18, 2004) (pdf)
Cancellation is proper where award under the solicitation would
not meet the government’s actual needs, and the agency properly
may cancel a solicitation no matter when the information
precipitating the cancellation first surfaces or should have
been known, even if the cancellation occurs after proposals have
been submitted. See Encore Mgmt., Inc., B‑278903.2, Feb. 12,
1999, at 3. (Daston Corporation,
B-292583; B-292583.2, October 20, 2003) (pdf)
The record reflects that the agency canceled the initial RFQ and
made the decision to resolicit its requirements under a revised
solicitation after the project manager’s review of the
acquisition and her conclusion that the Ft. Berthold Service
Unit/Minnetohe IHS clinic’s needs had changed. Specifically, the
agency reports that its primary reason for canceling and
resoliciting this requirement was the agency’s determination
that the requirement for electronic claim filing using a
clearinghouse for billing third parties was no longer needed
because these services would be performed in-house. Agency
Dismissal Request at 2. In response, DataTrak asserts that the
agency “did not have a justifiable change in its needs that
would support this action.” Supplemental Protest (B-292503.2) at
14. Rather, the protester alleges, the revised RFQ is for the
same effort and scope of work as the initial RFQ and DataTrak
insists that the agency simply issued the revised RFQ to change
the evaluation criteria and thus avoid making award to DataTrak
whose quotation in response to the initial RFQ was fully
responsive. Id. at 14-16; Protester’s Comments at 9-13.
Our review of the record provides no basis for us to question
the reasonableness of the agency’s cancellation of the initial
RFQ. (DataTrak Consulting, Inc.,
B-292502; B-292502.2; B-292503; B-292503.2, September 26, 2003)
(pdf)
As noted, the agency initially canceled the RFP after concluding
that SKSS's price was unreasonable, and that there thus were no
acceptable HUBZone offers. The contracting officer's conclusion
was based in significant part on a comparison of SKSS's price
with the agency's estimate--SKSS's price exceeded the estimate
by 8.2 percent. The protester asserts that such a small
percentage does not support a finding of price unreasonableness.
We are inclined to agree with the protester, since the agency
has not provided an explanation as to why this arguably modest
price difference was significant enough to render SKSS's price
unreasonable. However, the validity of the price reasonableness
determination is not dispositive in this case, and we thus need
not address it, since the record supports the agency's
conclusion--reached during its consideration of the agency-level
protest--that SKSS's proposal was technically unacceptable. In
this regard, a contracting agency's initial reliance on an
improper reason for canceling a solicitation is not significant
if the record establishes that another proper basis for the
cancellation exists. Peterson-Nunez Joint Venture, B‑258788,
Feb. 13, 1995, 95-1 CPD ¶ 73 at 5; SEI Info. Tech.--Recon.
B‑219668.2, Apr. 23, 1986, 86-1 CPD ¶ 393 at 3. An agency
properly may cancel a solicitation no matter when the
information supporting the cancellation first surfaces or should
have been known. Pike Creek Computer Co., Inc., B‑290329, June
21, 2002, 2002 CPD ¶ 106 at 2. (Sunshine Kids Service
Supply Company, B-292141, June 2, 2003) (pdf)
We believe that determinations of this kind must be left in the
first instance to the sound judgment and discretion of
responsible agency officials, subject to objection upon review
only if clearly shown to be without a reasonable basis. See
Federal Leasing, Inc.; DPF, Inc., B-182534, Apr. 18, 1975, 75-1
CPD ¶ 236 at 7-8. After a review of the record in the present
case, we cannot conclude that the Army lacked a reasonable basis
to cancel the solicitation at the time it did so.
In reaching this conclusion, we take note of the evidence in the
record that the PWS workload has changed over the lengthy period
of time since the study commenced; of the recent restructuring
and reorganization of the way the Army manages installation
support operations and the inevitable but uncertain impact this
will have on the garrison's organization and its components,
including the three components at issue in the solicitation; and
of the garrison's concerns about funding. In an appropriate
case, each of these factors may be sufficient to justify the
cancellation of a solicitation. Printz Reinigung GmbH, B-241510,
Feb. 8, 1991, 91-1 CPD ¶ 143 (cancellation of solicitation
justified because of agency concerns about inaccuracy of the
RFP's stated workload due to recent organizational changes and
potential for cost savings through consolidation); Source AV,
Inc., supra (cancellation of A-76 solicitation was reasonable
where agency based its decision on uncertainty regarding
budgetary constraints and likelihood that a reduction in the
workload would materialize after a planned agency
reorganization); Mercury Consolidated, Inc., B-218182, June 17,
1985, 85-1 CPD ¶ 687 (cancellation of A-76 solicitation
justified based on substantial changes in the government's needs
and the long period of time between the original solicitation
and necessary revisions). While we find that the Army failed to
provide sufficient support to justify the cancellation of the
solicitation on any one of these factors alone, in our view,
when the implications of these factors are combined with the
uncertainty raised by the pending exemption requests and their
potential impact on the scope of this procurement, we cannot
conclude that the cancellation decision was clearly
unreasonable. (Satellite Services,
Inc., B-288848.3, April 28, 2003) (pdf)
In the final analysis, the process for selecting topics involves consideration by numerous DOD component
activities, and the protester has not identified any basis for our Office to conclude
that DOD, as the acquiring activity, improperly or inaccurately determined that its
actual needs did not include the subject topic. While it is unfortunate that this
deliberative process took the amount of time ultimately required, this delay does not
provide a basis for finding the cancellation improper. See PAI Corp., et al., B-244287
et al., Nov. 29, 1991, 91-2 CPD ¶ 508 at 4-5 (cancellation proper no matter when the
information precipitating the cancellation is known or should have been
known, even if solicitation is not canceled until after proposals are submitted and protesters
have incurred costs in pursuing the award). (Pike
Creek Computer Company, Inc., B-290329, June 21, 2002
(pdf) (STTR Program))
Where an agency determines that a solicitation does not accurately reflect its needs,
cancellation is appropriate. Digicon Corp., B-256620, July 7, 1994, 94-2 CPD ¶ 12 at 2.
Further, in a negotiated procurement, an agency has broad authority to decide
whether cancellation is appropriate, and this authority extends to the cancellation of
solicitations used to conduct A-76 cost comparisons. Lackland 21st Century
Servs. Consol., B-285938.7, B-285938.8, Dec. 4, 2001, 2002 CPD ¶ 197 at 5. Finally, provided
an agency has a reasonable basis for doing so, it may cancel a solicitation regardless
of when the information precipitating the cancellation first surfaces. Id.
(Rice Services,
Ltd., B-284997.5, March 12, 2002)
Where cancellation of a
solicitation is justified, the fact that a particular offeror
otherwise would have been in line for award does not provide a
basis for precluding the agency from canceling. See Tender
Loving Care Ambulance & Ambulette Co., Inc., B-276571.2,
July 17, 1997, 97-2 CPD para. 25 (only small business remaining
in competition is not entitled to award under small business
set-aside where procuring agency had a reasonable basis to
cancel request for proposals); HBD Indus., Inc., supra (sole
remaining acceptable offeror is not entitled to award where
agency has a legitimate basis to cancel procurement). We
have found that a reasonable basis to cancel an RFP exists where
changes to the solicitation are expected to result in increased
competition or lower prices. Robertson Leasing Corp., B-275152,
Jan. 27, 1997, 97-1 CPD para. 49 at 3. We have also specifically
found that a required change in a construction schedule meets
the stricter compelling reason standard necessary to support
cancellation of an invitation for bids, where that change likely
will result in changed prices. Cedar Valley Corp., B-225475,
B-225723, Feb. 24, 1987, 87-1 CPD para. 211 at 3. Goode does not
argue that the construction schedule does not need to be
changed, or that the proposed change will not result in lower
contractor costs, more competition, and a potentially lower cost
to the government. (Goode
Construction, Inc.--Protest and Costs, B-288655.4;
B-288655.5; B-288655.6, January 28, 2002)
In a negotiated procurement, an
agency has broad authority to decide whether to cancel a
solicitation; there need be only a reasonable basis for the
cancellation. Safety Storage, Inc., B-280851.2, May 13, 1999,
99-1 CPD para. 93 at 2. This broad grant of authority extends to
the cancellation of solicitations used to conduct A-76 cost
comparisons. Source AV, Inc., B-241155, Jan. 25, 1991, 91-1 CPD
para. 75 at 3; Cantu Servs., Inc., B-219998.8, B-233697, Mar.
27, 1989, 89-1 CPD para. 306 at 2. So long as an agency has a
reasonable basis for doing so, it may cancel a solicitation
regardless of when the information precipitating the
cancellation first surfaces or should have been known, even if
the solicitation is not canceled until after proposals have been
submitted and evaluated, Peterson-Nunez Joint Venture, B-258788,
Feb. 13, 1995, 95-1 CPD para. 73 at 4; Nomura Enter. Inc.,
B-251889.2, May 6, 1993, 93-1 CPD para. 490 at 3-4; after
contract award, see Atlantic Scientific & Tech. Corp.,
B-276334.2, Oct. 27, 1997, 97-2 CPD para. 116 at 5; or, as here,
after the announcement of a different course of action in
response to a GAO protest. Id. at 1-2. (Lackland
21st Century Services Consolidated, B-285938.7; B-285938.8,
December 4, 2001)
Cancellation of request for
quotations (RFQ) for 1 year of janitorial and grounds
maintenance services, with 4 option years, on the basis that the
services had to be procured pursuant to the Javits-Wagner-O'Day
(JWOD) Act, was improper where only services for 240 days or
fewer had to be acquired under the statute. Related RFQ to cover
a shorter term properly was canceled, however, since a
reasonable basis existed for cancellation. (Aleman
& Associates, Inc., B-287275.2; B-287356.2, July 2,
2001)
More importantly, the record
reflects that the solicitation was either ambiguous with regard
to the time allowed for installation of the UPS system, or
overstated the agency's minimum needs by continuing to mandate a
45-day installation period, and that the agency may obtain
enhanced competition by amending the solicitation to clearly
reflect its needs in this regard. Accordingly, we find that the
agency's decision to cancel the solicitation to revise the
source selection criteria and specifications to better reflect
the agency's actual requirements, and seek enhanced competition,
was reasonable. (A-Tek,
Inc., B-286967, March 22, 2001)
A contracting agency need only
establish a reasonable basis to support a decision to cancel an
RFQ. Shasta Transfer & Storage, B-261172, July 28, 1995,
95-2 CPD para. 48 at 2; Tony Ingoglia Salami and Cheese, Inc.,
B-244452, Sept. 23, 1991, 91-2 CPD para. 268 at 3. A reasonable
basis to cancel exists when there is a material increase in the
quantity needed to satisfy the agency?s requirements, Switlik
Parachute Co., Inc., B-275539, Mar. 3, 1997, 97-1 CPD para. 113
at 3, or when a new solicitation presents the potential for cost
savings. Eastman Kodak Co., B-271009, May 8, 1996, 96-1 CPD para.
215 at 4, recon. denied, B-271009.2, Oct. 7, 1996, 96-2 CPD para.
136. (USA
Electronics, B-283269.2, October 5, 1999)
The record shows, and D&K
does not rebut, that it was noncompliant with regard to the bulk
storage, countertops and also failed to fully explain its
position concerning the double-walled storage tank. The record
shows that these matters were the subject of both oral and
written discussions, and that the protester?s final revised
proposal remained noncompliant. In these circumstances where the
agency conducted several rounds of oral and written discussions,
and the protester?s proposal still remained noncompliant with
the RFP SOW, we see no basis to object to the contracting
officer?s decision to cancel. See Concepts Bldg. Sys., Inc.,
B-281995, May 13, 1999, 99-1 CPD para. 95.2. (D&K
Construction Company, Inc., B-281244.3, October 1, 1999) |