Link: GAO Decision
Protestor: Estrategy, Inc.
Agency: Department of Veterans Affairs
Disposition: Protest Denied in part and Dismissed in part.
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GAO Digest:
- Agency properly cancelled solicitation where the agency could not determine that any of the offerors’ proposed prices, which significantly exceeded the government estimate, were fair and reasonable.
- Protests of the terms of a solicitation generally must be filed prior to the time set for receipt of proposals.
General Counsel PC Highlight:
Estrategy, Inc. protested the decision to cancel an RFP and resolicit for transportation services for the 26th Annual National Veterans Golden Age Games (NVGAG). After conducting market research and determining that there were two SDVOSB firms that could be expected to submit proposals, the requirement was issued as an SDVOSB set-aside. Estrategy was the only firm to submit a proposal, and its proposed price of $525,000 was $200,000 higher than the independent government estimate (IGE) and $135,000 more than the contract for the year before. The CO compared Estrategy’s price with the costs of similar contracts for the previous four years, noting that the prior year’s contract was unique in that it was performed in Hawaii, where fuel was more expensive and there were fewer subcontractors available. The CO determined that adequate price competition did not exist and that award could not be made at a reasonable price.
Noting that agencies have broad discretion to cancel a solicitation under negotiated procedures so long as they have a reasonable basis for the cancellation, the GAO pointed out that it has found cancellations proper where the protestor’s price exceeded the IGE by as little as 7.2%. Finding that the CO conducted an in-depth analysis of the proposed price, the GAO found the agency’s determination to cancel the RFP reasonable. The GAO dismissed as untimely Estrategy’s complaint regarding ambiguity in the solicitation, agreeing with the agency that any ambiguity was patent and therefore must have been protested prior to the due date for receipt of proposals.
When determining whether to set aside a requirement for small businesses, an agency is required to conduct market research to determine whether there is a reasonable expectation that offers will be received from at least two small businesses capable of performing and that award can be made at a fair and reasonable price. If the agency determines that an award cannot be made at a reasonable price, it has broad discretion to cancel the solicitation and reissue as a full and open competition.