Link: GAO Opinion
Agency: Department of the Navy
Disposition: Protest denied.
Agency’s decision to cancel solicitation and obtain its requirements through an interagency agreement is not objectionable where it is based on reasonable conclusion that utilizing the interagency agreement would result in substantial cost savings as compared with an award under the canceled solicitation.
General Counsel P.C. Highlight:
RN Expertise filed an agency-level protest challenging the agency’s cancellation decision. The Navy denied the protest and RN Expertise then filed its protest of the cancellation with GAO. 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; and (2) the agency failed to consider “best value” as provided in the canceled solicitation when it decided to utilize the interagency agreement. GAO states that 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.” GAO has 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. GAO has recognized that the potential for cost savings provides a reasonable basis for cancellation. 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.
GAO states that 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.
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, GAO has no basis to question the agency’s decision to cancel the RFP. The protest is denied.