Matter of: Building Services Unlimited, Inc.--Entitlement to Costs File: B-254323.3 Date: March 10, 1994 94-1 CPD Para. 190

B-254323.3: Mar 10, 1994

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PROCUREMENT Bid Protests GAO procedures Preparation costs Administrative remedies Adequacy Protester is not entitled to reimbursement of the costs of filing and pursuing protest under Section 21.6(e) of Bid Protest Regulations where the agency took prompt corrective action. 23 working days after being notified that the protest was filed. The solicitation was issued for maintenance. BSUI argued that the solicitation was defective because it failed to contain the standard "Variation in Estimated Quantities" clause (Federal Acquisition Regulation Sec. 52.212-11). BSUI also argued that even if the acquisition were not set aside for SDBs. The agency informed our Office that it was canceling the solicitation because the contracting officer failed to conduct a market survey to determine whether the solicitation should be set aside for exclusive SDB participation.

Matter of: Building Services Unlimited, Inc.--Entitlement to Costs File: B-254323.3 Date: March 10, 1994 94-1 CPD Para. 190

PROCUREMENT Bid Protests GAO procedures Preparation costs Administrative remedies Adequacy Protester is not entitled to reimbursement of the costs of filing and pursuing protest under Section 21.6(e) of Bid Protest Regulations where the agency took prompt corrective action--23 working days after being notified that the protest was filed.

Attorneys

DECISION

We deny the request.

BSUI filed two protests with our Office challenging the terms of the IFB. In its first protest, B-254323, filed July 30, 1993, BSUI challenged the agency's failure to set the procurement aside for SDBs. In its subsequent protest, B-254323.2, filed on August 4, BSUI argued that the solicitation was defective because it failed to contain the standard "Variation in Estimated Quantities" clause (Federal Acquisition Regulation Sec. 52.212-11); BSUI also argued that even if the acquisition were not set aside for SDBs, delivery orders not expected to exceed $25,000 should be excluded from the scope of the solicitation and set aside for either small businesses or emerging small businesses.

On September 2, the agency informed our Office that it was canceling the solicitation because the contracting officer failed to conduct a market survey to determine whether the solicitation should be set aside for exclusive SDB participation. We subsequently dismissed BSUI's protests as academic based on the cancellation.

Our Bid Protest Regulations provide that a protester may be entitled to reimbursement of its costs of filing and pursuing a protest where the contracting agency decides to take corrective action in response to a protest. 4 C.F.R. Sec. 21.6(e) (1993). This provision is intended to allow the award of costs where we find that the agency unduly delayed taking corrective action in response to a clearly meritorious protest. Anderson Columbia Co., Inc., B-250530, Nov. 24, 1992, 92-2 CPD Para. 377.

While the Army argues that it did not base its cancellation decision on the arguments set forth in BSUI's protest, we conclude that the cancellation was in response to BSUI's claim that the agency improperly failed to set aside this procurement for SDB participation. The Army's letter canceling the solicitation explains that it failed to follow "proper procedures" in reaching its determination of whether or not to set aside the procurement. Specifically, the Army states it did not comply with the regulations implementing the Department of Defense SDB program, set forth in Defense FAR Supplement (DFARS) part 219, which require procurements to be set aside for exclusive SDB participation if the contracting officer determines that there is a reasonable expectation that: (1) offers will be obtained from at least two responsible SDB concerns, (2) award will be made at a price not exceeding the fair price by more than 10 percent, and (3) scientific and/or technological talent consistent with the demands of the acquisition will be offered. DFARS Sec. 219.502-2-70-(a).

While the agency did not complete its investigation concerning whether or not to set aside the acquisition,[1] the agency concedes that it failed to consider whether an SDB set aside was appropriate by either discussing the matter with a Small Business Administration representative or conducting an investigation using a market survey or a review of the procurement history.[2] Therefore, even if the agency had ultimately determined that the acquisition was not suitable to be set aside for exclusive SDB participation, in our view, the cancellation here constituted corrective action in response to BSUI's protest.

Even though we conclude that the Army's action was taken in response to BSUI's protest, we also review the record to determine whether the agency took appropriate and timely steps to investigate and resolve the impropriety. See Locus Sys., Inc.--Entitlement to Costs, 71 Comp.Gen. 243 (1992), 92-1 CPD Para. 177; Commercial Energies, Inc.--Recon. and Entitlement to Costs, 71 Comp.Gen. 97 (1991), 91-2 CPD Para. 499. In this case, the agency notified our Office of its intention to take corrective action on September 2, 23 working days after being notified by our Office that the protest was filed. Such corrective action, taken early in the protest process, is precisely the kind of prompt reaction to a protest that our Regulations are designed to encourage. Special Sys. Servs., Inc.--Entitlement to Costs, B-252210.2, June 8, 1993, 93-1 CPD Para. 445. Accordingly, we conclude that the award of costs is not appropriate in this case.

The request for a declaration of entitlement to costs is denied.

1. Prior to determining whether the solicitation should be set aside for SDB concerns, the agency reported--in response to a protest filed by Government Contract Advisory Services, Inc. challenging the cancellation here (B-254323.4)--that funding was no longer available for this procurement.

2. We have sustained protests under similar circumstances where the agency failed to make reasonable efforts to ascertain small business capability to perform the contract. See DCT Inc., B-252479, July 1, 1993, 93-2 CPD Para. 1.