[Protest of Air Force Cancellation of Solicitation for Disk Drives]

A firm protested the Air Force's cancellation of a solicitation for disk drives in response to a military interdepartmental purchase request received from the Navy. The protester argued that: (1) the Navy's requirement for disk drives was cancelled in favor of another device which presented no operational advantages and probably no price advantage; (2) its disk drive technology was reliable, as shown by its use with Air Force flight simulators; (3) the data error rate of solid state devices may not be adequate; and (4) solid state memory devices can only be cost-competitive with its magnetic storage devices through the use of inexpensive foreign-made chips. GAO noted that: (1) the Navy cancelled its requirement for disk drives because it intended to procure a solid state memory system widely used in commercial applications; (2) the recent drop in the price of memory chip components made solid state devices an extremely cost-effective solution to the Navy's mass memory requirements; and (3) maintenance costs and system downtime would be minimized through the use of replaceable modules. GAO found that: (1) contracting agencies have broad discretion in determining when it is appropriate to cancel a solicitation; (2) when negotiation procedures are used, agencies need only establish a reasonable basis for the cancellation; and (3) the Navy anticipated improved reliability and cost-effectiveness with the procurement of solid state storage devices, and the Air Force, therefore, had a reasonable basis to cancel the solicitation at the Navy's request. Accordingly, the protest was denied.