[Claim for Bid Preparation Costs Pursuant to IFB Cancellation]

A firm claimed bid preparation costs for itself and all other qualified bidders under an Air Force solicitation that was canceled. The solicitation was for a cost comparison study to determine whether certain functions should be performed in-house or contracted out. The contracting officer included in the solicitation a clause stating that the solicitation was subject to cancellation without cause as a result of any change in Air Force policy. GAO held that, absent a showing that a contracting agency acted capriciously or arbitrarily in canceling a solicitation, bid preparation costs may not be awarded, and the cancellation of this solicitation constituted a reasonable exercise of discretion by the Air Force. Accordingly, the claim was denied.