B-245991.3, May 29, 1992

B-245991.3: May 29, 1992

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PROCUREMENT - Bid Protests - GAO procedures - Preparation costs - Administrative remedies DIGEST: Protester is not entitled to the costs of filing and pursuing its protest where agency canceled the acquisition prior to submission of agency report. Time associated with earlier unrelated protest is irrelevant to consideration of whether agency acted promptly during second protest. As is possibility that the cancellation may eliminate the protester's opportunity to compete for the requirement. The reissued RFQ was the subject of a second protest by Datavault filed on November 19. In which Datavault alleged that the terms of the RFQ were unduly restrictive. The agency advised our Office that it was canceling the solicitation and intended to reassess its needs for data storage services.

B-245991.3, May 29, 1992

PROCUREMENT - Bid Protests - GAO procedures - Preparation costs - Administrative remedies DIGEST: Protester is not entitled to the costs of filing and pursuing its protest where agency canceled the acquisition prior to submission of agency report; time associated with earlier unrelated protest is irrelevant to consideration of whether agency acted promptly during second protest, as is possibility that the cancellation may eliminate the protester's opportunity to compete for the requirement. Janice M. Bellucci, Esq., for the protester. Patricia S. Grady, Esq., General Services Administration, for the agency. Scott H. Riback, Esq., John M. Melody, Esq., and David Ashen, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.

Datavault Corporation-- Request for Declaration of Entitlement to Costs:

Datavault Corporation requests that our Office declare it entitled to recover the costs associated with filing and pursuing its protest of the terms of request for quotations (RFQ) No. RFQ-M0078, issued by the General Services Administration (GSA) to acquire data storage services.

We deny the request.

Datavault originally filed a protest on October 1, 1991, (B-245991), alleging that GSA improperly rejected its offer and made award to another firm under an earlier version of the RFQ for these services. In response to that protest, GSA terminated the challenged contract for the convenience of the government and reissued the RFQ. Based upon these actions, Datavault withdrew its protest. The reissued RFQ was the subject of a second protest by Datavault filed on November 19, 1991 (B-245991.2), in which Datavault alleged that the terms of the RFQ were unduly restrictive. On December 13, the agency advised our Office that it was canceling the solicitation and intended to reassess its needs for data storage services. On December 16, we dismissed Datavault's protest as academic based on the cancellation.

In its request here, Datavault alleges that since it took GSA almost 2- 1/2 months to take effective corrective action in response to its two protests, it is entitled to recover its bid protest costs pursuant to our Bid Protest Regulations, 4 C.F.R. Sec. 21.6(e) (1992). According to the protester, due to the 2-1/2 month delay from the filing of its first protest to meaningful agency corrective action, this case is distinguishable from those cases in which an agency has taken corrective action and we have declined to award bid protest costs because of the agency's relative promptness. Furthermore, Datavault argues that since the agency has indicated it may continue to store the data in-house, rather than issue a new solicitation, Datavault may never get an opportunity to compete for the requirement and for this reason should receive its protest costs.

We see no basis to permit recovery of protest costs. First, it is not clear that the agency's action here constitutes corrective action in response to a protest, which is a prerequisite to the award of protest costs under section 21.6(e) of our Regulations. Although GSA reports that it took "corrective action," the agency maintains that the solicitation was not canceled because it was determined to be unduly restrictive. Instead, according to GSA, the solicitation was canceled to enable the agency to ascertain its needs and how best to meet them. Cancellation for such a reason would not constitute corrective action. See PAI Corp. et al.-- Protests and Requests for Declaration of Entitlement to Protest Costs, B-244287.5 et al., Nov. 29, 1991, 91-2 CPD Para. 508.

In any case, even if we assume that the cancellation constituted corrective action responsive to Datavault's protest, our Bid Protest Regulations were not intended for the purpose of reimbursing protesters their bid protest costs in every case where an agency takes corrective action. The Regulations simply reflect our concern that agencies were not taking corrective action in a reasonably prompt fashion in the face of clearly meritorious protests. See Dynair Elec., Inc.-- Request for Declaration of Entitlement of Costs, B-244290.2, Sept. 18, 1991, 91-2 CPD Para. 260. Our intent was to provide for award of bid protest costs in those cases where, based upon the circumstances, it was clear that an agency had unduly delayed its implementation of corrective action. Id. The fact that such corrective action may result in a decision to not contract at all for a particular requirement is of no relevance in determining the promptness of the corrective action.

Here, we cannot conclude that GSA unduly delayed taking corrective action. While the protester is correct that almost 2-1/2 months elapsed between the filing of its initial protest and GSA's cancellation of the second RFQ, Datavault's argument ignores the difference between the two protests. The two protests were unrelated with respect to both the nature of the issues raised and the corrective action required. Datavault's first protest was based upon an alleged failure of the agency to properly evaluate Datavault's offer under the terms of a predecessor RFQ which it admits bore little resemblance to the second solicitation. In contrast, its second protest related to alleged defects contained in the second RFQ. The protester has not alleged that the defects identified in its second protest were common to both RFQs, and does not suggest that the corrective actions were not prompt in relation to the protests to which those actions responded. We therefore see no basis for considering the time taken by the agency to resolve the first protest in determining whether the agency acted in a reasonably prompt fashion in taking corrective action in the second protest.

Viewing the matter in this light, we conclude that GSA took corrective action responsive to Datavault's second protest in a reasonably prompt fashion. As noted above, the second protest was filed on November 19, and the agency communicated its intent to cancel the solicitation and reevaluate its needs on December 13. In our view, a delay of less than 1 month between the time a protest is filed and the time when the agency takes corrective action does not constitute an undue delay. See Leslie Controls, Inc.-- Claim for Costs, B-243979.2, July 12, 1991, 91-2 CPD Para. 50.

The request is denied.