[Protests of Navy Cancellation of Solicitation for Ship Support Complex]

Two firms protested the Navy's cancellation of a solicitation for a ship support complex, contending that the: (1) Navy improperly determined that their bids were unreasonable; and (2) conversion from a sealed-bid to a negotiated procurement after disclosure of bid prices created the potential for an auction. GAO held that the: (1) Navy properly cancelled the solicitation, since it determined that all the bid prices were unreasonable, and it did not have sufficient funds available to make award to the low bidder; and (2) cancellation did not result in an impermissible auction, since the cancellation was due to unreasonable bid prices. Accordingly, the protests were denied.