[Protest of Corps of Engineers Rejection of Bids and Cancellation of IFB for Maintenance Dredging]

A firm protested the Corps of Engineers rejection of all bids and subsequent solicitation cancellation for maintenance dredging. The protester argued that: (1) the Corps had no compelling reason to cancel the solicitation; and (2) the Corps contravened a provision which states that a solicitation should not be cancelled and readvertised due solely to increased requirements, but award should be made on the initial invitation for bids and the additional quantity should be treated as a new acquisition. GAO noted that: (1) the Corps rejected all bids and cancelled the solicitation because the solicitation specifications did not ensure that dredging would be adequate for safe passage; (2) the third bidder filed an agency-level protest on the basis that the two lower bids were materially unbalanced; and (3) the solicitation was not cancelled because of increased requirements, but because the solicitation contained inadequate specifications that did not reflect the government's actual needs. GAO found that: (1) the protester did not address the allegation that its bid was materially unbalanced; (2) contracting officers have the discretion to reject all bids and cancel a solicitation if a cogent and compelling reason supports the decision; and (3) the protester has the burden of showing that the contracting officer abused his discretion. GAO also found that: (1) specifications that do not adequately describe the government's actual needs constitute a compelling reason for cancellation; (2) it is the contracting agency's responsibility to determine its minimum needs; (3) the protester did not present any evidence that the proposed revisions to the solicitation were unnecessary; and (4) the provision which requires a separate procurement for increased item requirements did not apply since the procurement was for maintenance services and not for a supply of contract items. Accordingly, the protest was denied.