Protest of Solicitation Cancellation

B-198316: May 27, 1980

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A firm protested the cancellation of a solicitation for medical supplies issued by the District of Columbia General Hospital. Because the Hospital improperly revealed offerors' prices at a public opening of proposals, it canceled the solicitation on the theory that to continue the procurement would constitute an illegal auction. The protester contended that the disclosed prices would not be prejudicial to any of the offerors. GAO held that where prices in a negotiated procurement have been improperly disclosed to all offerors, it is desirable to make award on the basis of the initial proposals, if possible, because to conduct negotiations and the submission of final offers could constitute a proscribed auction. To the extent that award cannot be made on the basis of initial proposals, discussions should be held with offerors notwithstanding the possible auction, since the resulting award would not be improper or illegal. Moreover, the possibility of damage to competition resulting from resolicitation would more than offset the harm resulting from the possible auction. Therefore, GAO recommended that the Hospital reconsider the cancellation of the solicitation and that award be made on an initial proposal basis if appropriate.