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)