B-231353, Jul 25, 1988, 88-2 CPD 79

B-231353, Jul 25, 1988, 88-2 CPD 79

PROCUREMENT - Competitive Negotiation - Request for proposals - Cancellation - Justification - GAO review PROCUREMENT - Socio-Economic Policies - Small business (8)a subcontracting - Use - Administrative discretion DIGEST: 1. The determination to cancel a competitive procurement and to initiate a procurement under section 8(a) of the Small Business Act is a matter for the contracting agency and the Small Business Administration to decide; that decision will not be reviewed by the General Accounting Office absent a showing of possible fraud or bad faith on the part of government officials. PROCUREMENT - Bid Protests - Allegation substantiation - Lacking - GAO review PROCUREMENT - Bid Protests - Bad faith - Allegation substantiation - Lacking 2. Protester contending that the contracting officer acted in bad faith must submit proof that the contracting officer had a specific and malicious intent to injure the protester.

Bucky X-Ray International Corporation:

Bucky X-Ray International Corporation protests the Defense Logistics Agency's (DLA) decision to set aside a contract under section 8(a) of the Small Business Act, 15 U.S.C. Sec. 637(a) (1982), for portable x ray apparatus. Section 8(a) authorizes the Small Business Administration (SBA) to enter into contracts with government agencies and to arrange for the performance of such contracts by letting subcontracts to socially and economically disadvantaged small business concerns. We deny the protest.

DLA synopsized request for proposals (RFP) DLA120-87-R-1011 in the Commerce Business Daily (CBD) as a competitive total set-aside for small business firms. Subsequently, at the request of SBA, DLA offered the requirement to SBA under the 8(a) program, and therefore the solicitation was not issued.

Bucky argues that because DLA advertised the requirement, it may not later withdraw it and set it aside under the 8(a) program. The protester cites Federal Acquisition Regulation (FAR) Sec. 5.101 in support of its position. FAR Sec. 5.101, however, merely states methods for contracting officers to disseminate information on proposed contracts, such as synopsizing in the CBD. It lends no support to Bucky's claim that once a proposed procurement is synopsized, it may not be withdrawn and set aside.

By the terms of the Small Business Act, a contracting officer is given the discretion to let a contract to SBA under such terms and conditions as agreed to by the agency and SBA. Because of the broad discretion afforded the SBA and the contracting agencies under the applicable statute and regulations, our review of actions under the 8(a) program generally is limited to determining whether the regulations have been followed and whether there has been fraud or bad faith on the part of government officials. RAI, Inc., B-222610, Aug. 5, 1986, 86-2 CPD Para. 156.

Bucky did not allege bad faith on the part of the contracting officer until its comments on the agency's report on the protest, and offered no reason for the delay. A protester may not introduce a new issue in its comments that it could have raised in its initial submission to our Office. Our Bid Protest Regulations, 4 C.F.R. part 21 (1988), do not contemplate the unwarranted piecemeal presentation of protest issues. Atlas Trading and Supply Company, Inc., B-227164, Aug. 10, 1987, 87-2 CPD Para. 146. In any event, Bucky's allegation of bad faith on the part of the contracting officer is based on the substance of its protest-- that the decision to withdraw the requirement from competitive bidding was made so that an award can be made without competition under the 8(a) program. However, a showing of bad faith requires proof that the contracting officer had a specific and malicious intent to injure the protester, Washington Patrol Services, Inc., B-225610 et al., Apr. 7, 1987, 87-1 CPD Para. 384, a showing that clearly has not been made here.

In the absence of a showing of bad faith on the part of government officials, we will not object to a determination to cancel a competitive solicitation and to initiate a section 8(a) procurement, since that is a matter for the contracting agency and the SBA to decide. RAI, Inc., B-222610, supra. We have so held where, as in this case, the solicitation has been advertised but not issued, Graphic Industries Association, B-211940, Nov. 21, 1983, 83-2 CPD Para. 600, and even where an IFB is canceled after bid opening. Exquisito Services, Inc., 65 Comp.Gen. 729 (1986), 86-2 CPD Para. 78.

Bucky also argues that SBA violated FAR Sec. 6.101, which requires contracting officers to promote and provide full and open competition in soliciting offers and awarding contracts. The regulation provides, however, that the requirement is subject to certain limited exceptions, one of which is statutory authorization permitting contracting without providing for free and open competition, such as the 8(a) program. FAR Sec. 6.302-5(4).

Finally, Bucky argues that SBA violated the requirement that there be a reasonable expectation that offers will be obtained from at least two responsible small business concerns in FAR Sec. 19.502-2. That regulation applies to small business set-asides, which are competitive, not to 8(a) contracts.

The protest is denied.