Link: GAO Opinion
Agency: Defense Logistics Agency
Disposition: Protests denied.
- Agency’s cancellation of solicitations for parts was reasonable where the agency discovered that obtaining one of the parts under an existing contract would be more advantageous to the government than continuing with the procurement and that it no longer had a requirement for the other part solicited.
- Agency’s issuance of a delivery order for parts was within the scope of the underlying contract and could have been reasonably aby offerors, in light of the fact that the ordered part was specifically included in the contract, and the contract allowed the agency to order the part under a negotiated delivery schedule.
General Counsel P.C. Highlight:
Lasmer first protests that the cancellations of the RFP and RFQ were improper. Specifically, the protester argues that the agency’s cancellations were pretextual to avoid review of Lasmer’s initial protests and to avoid awarding Lasmer contracts. GAO states that an agency has broad authority to cancel an RFP or RFQ, and needs only a reasonable basis to do so. Moreover, 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 rationale 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 closely examine the bases for the agency’s actions. Notwithstanding such closer scrutiny and even if it can be shown that personal animus or pretext may have supplied at least part of the motivation to have the RFP canceled, the reasonableness standard applicable to cancellation of a solicitation remains unchanged.Cancellation of a solicitation is reasonable where the agency determines that it no longer has a requirement for the item solicited, or where the agency discovers an existing contract for its requirement would be more advantageous to the government than continuing with the procurement.
Here, the agency explains that it canceled the solicitations because it no longer had a need for them. In the case of the RFP, the agency canceled the solicitation because the contracting officer concluded that she was able to obtain more favorable pricing and delivery terms under the existing FASI-G contract. In the case of the RFQ, the agency canceled the solicitation because the contracting officer determined the agency had adequate supplies on hand to support its demands through June 2009, during the FASI-G contract’s execution phase.
Lasmer argues that the cancellation of the RFP was improper because neither the delivery order’s schedule nor price were more advantageous than acquiring the items under the RFP, as the contracting officer had concluded. Under the RFP, the first delivery of 2,350 seats was scheduled 90 days after award, with subsequent deliveries at 120 days for 2,000 seats, 150 days for 2,000 seats, 180 days for 2,000 seats, and 210 days for 50 seats, for a total of 8,400 seats. Lasmer’s proposed price under the RFP was [DELETED] per seat. Based on a review of the documentation, GAO finds the agency could reasonably conclude that because the agency would receive more seats in a shorter amount of time at a lower cost under the delivery order to the Lockheed FASI-G contract than under the RFP, it was more advantageous to the government. Thus, GAO finds that the agency had a reasonable basis for canceling the RFP because the NSN 4175 items could be more advantageously acquired under another contract.
As to the RFQ, the NSN 8392 vehicular seat inventory was not depleted as were the NSN 4175 vehicular seats that were to be obtained under the RFP. The record shows that upon the contracting officer’s discovery of the FASI-G contract, she reviewed the supply status of NSN 8392 and determined that there were sufficient supplies on hand to support the item throughout the FASI-G implementation period. Therefore, she had a reasonable basis for canceling the RFQ because there was no longer an immediate need for the solicited items.
Lasmer next contends that delivery order No. 0001 for the vehicular seats that were to be acquired under the RFP constituted a modification that exceeded the scope of the original FASI-G contract, and that it therefore constituted an improper sole-source award under the Competition in Contracting Act of 1984 (CICA). GAO states that it will generally not review protests of modifications or delivery orders under contracts because such matters are related to contract administration and are beyond the scope of the bid protest function. An exception to this rule is where, as here, it is alleged that a contract modification is beyond the scope of the original contract because, absent a valid sole-source determination, the work covered by the modification would be subject to the statutory requirements for competition. When a protester alleges that an order is outside the scope of the contract, GAO analyzes the protest in essentially the same manner as those in which the protester argues that a contract modification is outside of the scope of the underlying contract. The fundamental issue is whether issuance of the task or delivery order in effect circumvents the general statutory requirement under CICA that agencies “obtain full and open competition through the use of competitive procedures” when procuring their requirements. In determining whether a modification (here, the order) is a “cardinal change” that triggers the competition requirements in CICA, GAO looks to whether there is a material difference between the modified contract and the contract that was originally awarded. Evidence of a material difference between the modification and the original contract is found by examining any changes in the type of work, performance period, and costs between the contract as awarded and as modified. GAO also considers whether the solicitation for the original contract adequately advised offerors of the potential for the type of change found in the modification, and thus whether the modification could have changed the field of competition.
While the contract contemplates that NSN items will primarily be ordered during the execution phase, the contract also recognized that orders can be issued during the implementation phase. More particularly, the provisions in amendment 0003 clearly allow the parties to provide for the contractor to supply an NSN item identified under the contract prior to the beginning of the execution phase of the contract. Here, the agency negotiated a plan that would enable another company to supply NSN 4175 vehicular seats, which was one of the specific NSN items listed in the other company’s contract, during the implementation phase based upon the Government’s stocking levels and the contractor’s capability. While the protester argues that the strict delivery timeframes apply, amendment 0003 does not state nor imply that the delivery timeframes would apply to any negotiated deliveries prior to the 271st day. Based on GAO’s review, GAO finds that the delivery order was within the scope of the FASI-G contract and could have been reasonably anticipated by offerors, in light of the fact that the contract covered a broad scope of supply chain management functions, of which delivery of the listed items, including NSN 4175, were required, and expressly allowed the agency to order specific items under a negotiated delivery schedule prior to the execution phase if a need arose. The protests are denied.