B-225621.4, Jul 15, 1987, 87-2 CPD 46

B-225621.4: Jul 15, 1987

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Where contracting officer determined that cancellation and resolicitation would increase competition and was in the best interest of the government. Is affirmed because protester has not shown that the decision was based on any error of fact or law. Category 1 was for the production of microfiche. Including diazo duplicates (which are produced for distribution purposes). Category 2 also was for microfiche. Which was supplied by the Army. (Category 1 was canceled for a reason unrelated to this protest.). Protested that there were no restrictive provisions compelling cancellation of the IFB. Permits cancellation where it is clearly in the government's interest. We have recognized that a contracting officer's desire to obtain enhanced competition by relaxing a material specification constitutes a valid reason under that standard.

B-225621.4, Jul 15, 1987, 87-2 CPD 46

PROCUREMENT - Bid Protests - GAO procedures - GAO decisions - Reconsideration DIGEST: Decision denying protest of cancellation of solicitation after bid opening, where contracting officer determined that cancellation and resolicitation would increase competition and was in the best interest of the government, is affirmed because protester has not shown that the decision was based on any error of fact or law.

Grumman Corporation-- Reconsideration:

Grumman Corporation requests that we reconsider our decision in Grumman Corp., B-225621.2 et al., May 20, 1987, 87-1 CPD Para. ***, in which we denied the company's protest of the cancellation after bid opening of invitation for bids (IFB) No. D-24-S, issued by the United States Government Printing Office (GPO) for data capture, digital composition and micropublishing of Department of the Army publications. We also denied, in our decision, Grumman's protest of the reissuance of the IFB and any contract award based on the resolicitation.

We affirm the decision.

The IFB contemplated the award of a separate requirements contract in each of two categories. Category 1 was for the production of microfiche, including diazo duplicates (which are produced for distribution purposes), from source documents such as bound books. Category 2 also was for microfiche, including diazo duplicates, but produced from digital data, generally in tape form. Category 2 required, as the initial (front-end) part of the process, the composition, reformatting and coding of the data, which was supplied by the Army. The IFB also required, as part of the responsibility determination, that bidders take a preaward test related to the front end work. The solicitation allowed subcontracting of the production of diazo duplicates and packaging but not the front-end work.

Automated Datatron, Inc. (ADI), had protested to our Office that the preaward test and the restriction on subcontracting the front-end work unduly restricted competition because they prevented bidders that could not pass the test from competing. Based upon the advice of GPO legal counsel that the solicitation should be reissued to allow subcontracting either the front-end work or the production of diazo duplicates in category 2, the contracting officer canceled the IFB, after bids had been opened, in order to generate more competition. (Category 1 was canceled for a reason unrelated to this protest.) Grumman, the low bidder for the category 2 work, protested that there were no restrictive provisions compelling cancellation of the IFB; that the resolicitation created the potential for an auction and would be prejudicial to the competitive system; and that the contracting officer only canceled the IFB because of the likelihood that ADI's protest would be sustained by our Office.

We denied the protest because the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 14.404-1(c)(9) (1986), permits cancellation where it is clearly in the government's interest, and we have recognized that a contracting officer's desire to obtain enhanced competition by relaxing a material specification constitutes a valid reason under that standard. Additionally, we noted that where cancellation is in accord with governing legal requirements, the agency has not created an impermissible auction.

Grumman, in its reconsideration request, contends that the front-end effort is substantial and requires a high degree of technical skill, expertise and equipment not possessed by companies like ADI, a point Grumman suggests we did not fully recognize in reaching our decision. Grumman basically argues that to insure the government's needs are met properly, the competition for category 2 work should be limited to the two firms that are capable of performing front-end work-- Grumman and Amtec Information (the only other category 2 bidder under the canceled IFB)-- and that only one contractor should perform all the category 2 work. support of its position Grumman has provided a December 1, 1986, Army memorandum to GPO, in which the Army requests that there be no subcontracting of the production of diazo duplicates.

Grumman's arguments do not persuade us that our decision was wrong. The contracting agency has the primary responsibility for determining its minimum needs and the method of accommodating them. See American Science and Engineering, Inc., B-225161.2, Mar. 5, 1987, 87-1 CPD Para. 252. Here, notwithstanding the Army's December of 1986 indication to GPO, the latter determined that consistent with the government's needs, the front- end work was segregable and could be subcontracted, thereby allowing bidders who did not possess the expertise required by the preaward test to compete for the category 2 work. The record does not include any further complaint or rebuttal by the Army, and Grumman's disagreement with GPO regarding how to insure the government's needs are fulfilled does not establish that GPO's determination to allow the subcontracting of front- end work was unreasonable. See T-L-C Systems, B-223136, Sept. 15, 1986, 86-2 CPD Para. 298.

Grummand also contends that the results of the resolicitation establish that the cancellation of the IFB was improper, since there was no increase in competition for category 2 work. Only Grumman and Amtec bid on that work in response to the initial solicitation; the only bidders under the resolicitation were Grumman and ADI, with ADI proposing Amtec as its subcontractor.

The fact that other firms chose not to compete for category 2 requirements does not establish that GPO was wrong in opening up competition. The three firms that bid on category 1 diazo duplicate production work and the 35 other firms that received IFB's were potential bidders under category 2, and we do not see how GPO could have known prior to resolicitation that these firms would not compete after the change in the subcontracting restriction. Under the circumstances, we do not think that GPO acted unreasonably.

Grumman has requested a conference. We will not conduct a conference on a reconsideration request, however, unless the matter cannot otherwise be resolved expeditiously. Restorations Unlimited, Inc., et al.-- Reconsideration, B-221862.2, July 11, 1986, 86-2 CPD Para. 57. We do not think a conference is warranted in this case.

Since Grumman has not shown that our prior decision was based on any error of fact or law, the decision is affirmed. 4 C.F.R. Sec. 21.12(a) (1986).