Agency: Department of Veteran Affairs (VA)
Disposition: Protest Sustained
Decided: January 12, 2017
General Counsel P.C. Highlight:
Agencies must provide a reasonable basis for cancelling a solicitation. Agencies must also provide a reasonable basis for extending the period of performance on a contract. Consequently, failure to provide a reasonable basis leads to an adverse inference.
Summary of Facts
On July 7, 2016, the VA posted a Request for Quotes (RFQ) for laundry services for three California VA hospitals. The award covered an indefinite-delivery/indefinite-quantity (IDIQ) fixed price contract. It included a base year and four (1) year options. The RFQ indicated evaluations considered price and technical acceptability, with award to the lowest priced, technically acceptable offeror. Originally, the maximum award was $2,500,000. In September, the solicitation was reopened, amending the solicitation maximum award amount to $10,000,000. Walker Development & Trading Group (“protester”) submitted a timely revised quotation.
On September 30, the Agency extended its contract with Railroad Cleaners to provide laundry services. On October 3, the agency notified protester that the solicitation was cancelled, and the solicitation would be reposted “within the next few months.”
Basis for the Protest
Protester objects on two grounds. First, protester argues that the agency lacked a reasonable basis for the cancellation of the solicitation. Protester further asserts that the agency’s conduct makes apparent their intent to sole-source award Railroad Cleaners.
In response to the protest, the agency provided a contract extension, along with two amendments extending the contract further. The agency argued that the extension to February 2017 was in “full compliance” with the FAR. The agency further asserted that contract administration was within their discretion and requested a dismissal of the protest.
Because the agency did not address the issue of the cancellation of the RFQ, on November 7, 2016 the U.S. Government Accountability Office (GAO) sent an email requesting information about the cancellation. On November 8, 2016, the GAO requested that the agency submit a supplemental response by November 11. In response, the agency provided a statement from the contract specialist indicating that Walker submitted the lowest priced, technically acceptable quotation, but did not meet the minimum contract amount of $1,000,000. In response, on November 14, 2016, the GAO requested information about the cancellation (for a second time). This led to the supplemental legal memorandum that was submitted by the agency which was devoid of any details about the cancellation. On November 21, 2016, the GAO again requested information about the cancellation, to which the agency responded that it had nothing further to add.
During a December 2, 2016 conference call between the GAO and the agency, the GAO attorney again asked for an explanation about the cancellation. Additionally, the attorney requested information on the extension of the contract with Railroad Cleaners, as well as the protester’s assertion that the agency provided Railroad Cleaners a sole-source award. The agency provided two undated, somewhat inconsistent responses, neither of which addressed the issues.
The GAO found that the agency failed to provide a coherent response regarding the decision to cancel the solicitation. Additionally, they found no evidence to support the agency’s assertion the minimum award must be $2,500,000. In light of the failure to respond, the GAO held, “we are left with no option but to make an adverse inference in this matter.” Consequently, the GAO concluded that no reasonable basis existed to cancel the solicitation.
Additionally, because the agency provided no information regarding the contract extension for Railroad Cleaners and offered no reasonable basis for extending Railroad Cleaners’ performance on the contract, the GAO sustained the protest as to the award of the contract to Railroad.
Finally, the GAO recommended that the protester be reimbursed for the reasonable costs associated with both filing and pursuing the protest.