[Protest of Cancellation of Invitation for Bids]

B-207180: Nov 24, 1982

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A firm protested an Air Force cancellation of an invitation for bids (IFB) for aircraft maintenance services. After a cost comparison, the Air Force determined that it should continue in-house performance of the requirement rather than contract it out. The protester prepared its bid on the basis of a contracting officer's information that services would be required on Federal holidays. On receipt of the protester's bid, which was the only bid received on the procurement, the agency determined that the most cost-effective way to meet the requirement would be to continue in-house performance. The protester appealed the validity of the Government's cost estimate, arguing that the in-house estimate erroneously omitted holiday premium pay for Federal workers who would perform the services if done in-house. The protester argued that, if holiday pay were added to the Government's estimate of in-house performance, it would be more cost effective for the Air Force to contract out the requirement. Further, it argued that the Air Force decision to cancel the solicitation was arbitrary and not supported by the evidence and requested that the IFB be reinstated and the in-house estimate corrected to include a proper amount of holiday premium pay. GAO does not review an agency decision to perform work in-house rather than to contract out. However, when an agency describes in a solicitation the circumstances under which the Government will or will not award a contract, GAO will review the procurement to determine whether the mandated procedures were followed in the comparison. The protester demonstrated that, during the past 3 fiscal years, the personnel have been required to work on some Federal holidays. Those employees were entitled to holiday premium pay, not merely to overtime compensation. GAO found that the Air Force did not demonstrate that the cancellation of the IFB was justified. Therefore, GAO recommended that the IFB be reinstated and that the Air Force adjust its in-house estimate to include a proper amount of holiday premium pay. GAO stated that if, after this adjustment, the protester's bid is less than the estimate for in-house performance, the Air Force should award the contract to the protester. Accordingly, the protest was sustained.