Link: GAO Opinion
Agency: Department of Transportation
Disposition: Protests denied in part and dismissed in part.
- Agency reasonably cancelled solicitation based on concerns, supported by the record, that the primary author of the solicitation’s statement of work and evaluation factors had a conflict of interest with regard to one offeror.
- GAO is not authorized to consider a protest challenging the award of a task order valued at less than $10 million where the protest does not assert that the order increases the scope, period, or maximum value of the contract under which the order was issued.
General Counsel P.C. Highlight:
First, with regard to e-Management’s and Centech’s protests challenging the agency’s decision to cancel the solicitation, GAO notes 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.” Further, in a negotiated procurement, an agency has broad authority to cancel a solicitation, and needs only a reasonable basis to do so. 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. 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, GAO will more closely examine the bases for the agency’s actions. Notwithstanding such closer scrutiny, the reasonableness standard applicable to cancellation of a solicitation remains unchanged.
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. Finally, the agency has produced a copy of the IG’s interim report for GAO’s in camera review. GAO understands the IG has not yet closed its investigation regarding this matter; accordingly, GAO will not further discuss that report. Based on GAO’s review of the record, GAO does 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.
Next, with regard to Centech’s protest challenging the agency’s interim issuance of a task order to Bowhead, GAO is not authorized to consider the matter. Specifically, the Federal Acquisition Streamlining Act of 1994 (FASA) provides that GAO is authorized to consider task order protests only under limited circumstances, stating: “A protest is not authorized in connection with the issuance or proposed issuance of a task or delivery order except for a protest on the ground that the order increases the scope, period, or maximum value of the contract under which the order is issued.”
GAO’s authority to consider task order protests was recently expanded by section 843 of the National Defense Authorization Act of Fiscal Year 2008 (NDAA). In this regard, the NDAA authorizes GAO, in addition to the circumstances identified above, to consider protests filed in connection with task orders that are valued in excess of $10 million. Here, Centech’s protest does not allege that the task order issued to Bowhead increased the scope, period, or maximum value of the contract against which the order was issued. Further, the record is undisputed that the value of the task order is less than $10 million. Accordingly, pursuant to the statutory limitations discussed above, GAO is not authorized to consider Centech’s protest challenging the agency’s issuance of an interim task order to Bowhead. The protests challenging the agency’s cancellation of the solicitation are denied and the protest challenging the award of an interim task order is dismissed.