Protest of IFB Cancellation After Bid Opening

The Bureau of Land Management, Department of the Interior, issued an invitation for bids (IFB) for tree planting in the Eugene District of Oregon, for which seven bids were received. When they were opened, however, it was discovered that they all exceeded not only Interior's estimates but also the available funds. Interior consequently canceled the IFB. A firm protested the cancellation and alleged that Interior's rejection of bids and cancellation of the IFB represented an attempt to "fix prices on reforestation contracts" and to "drive prices down" to meet the cost estimate. The protester also maintained that Interior's estimate was unreasonably low; that resolicitation would force bidders to lower their bid prices; and that, to reach these lower prices, contractors would violate labor and tax laws, dispose of trees improperly, and default on their contracts. The protester also requested that GAO audit Interior's tree planting practices and contractor performance under prior contracts. Interior acknowledged that the canceled IFB departed from prior contract specifications in requiring that seedlings be planted 6 to 8 feet apart and that planting holes be dug with a shovel; these restrictions were imposed in order to improve on the high first-year failure rate experience under earlier solicitations. Interior has resolicited the contract under looser specifications because of the short planting season, in order to accomplish the reseeding within the funds available. GAO upheld the right of contracting officers to cancel solicitations when all bids received exceeded available funds, and since that was the obstacle in the present case and Interior demonstrated good faith by revising the specifications and reissuing the solicitation, the protest was denied.