[Protests of Navy Termination of Maintenance Contract]

Two firms protested the Navy's termination of a contract for housing maintenance and its decision to resolicit the requirement as a small business set-aside. The large firm contended that it should have been awarded the contract under the unrestricted solicitation, since it was the low responsive bidder. The awardee contended that termination and resolicitation of its contract was improper, since the award met the Navy's actual needs and there was no persuasive evidence of prejudice to other bidders. GAO held that the: (1) Navy inadvertently omitted the clause restricting the competition to small businesses; (2) Navy properly resolicited the requirement as a small business set-aside; (3) the awardee, a small business, was not the low responsive bidder under the unrestricted solicitation; (4) the award could not be restricted to small businesses without the proper solicitation notice; and (5) awardee was not entitled to award. Accordingly, the protests were denied.