[Protest of Cancellation of Navy IFB for Public Works Services]

A firm protested the Navy's cancellation of a solicitation, contending that the Navy lacked an adequate basis for cancelling the solicitation. GAO noted that: (1) the protester submitted a bid price which was lower than the government's estimate of performing the work in-house; and (2) the Navy cancelled the solicitation on the ground that it contained defective provisions which could have a significant impact on timely and effective services. The Navy argued that: (1) the solicitation did not require the contractor to respond to and complete all service calls; and (2) it could not ensure that the contractor would not allow the equipment to deteriorate because of dollar limits in the solicitation on the contractor's liability. GAO found that: (1) although a contracting officer has broad discretion to cancel a solicitation, he must have a compelling reason to do so because of the potential adverse impact on the competition bidding system; and (2) the Navy expressed a compelling reason to cancel the solicitation since there was no assurance that the contractor could perform 100 percent of the service calls as required to meet the Navy's needs. Accordingly, the protest was denied.