Matter of: Hughes Aircraft Company--Request for Reconsideration; Entitlement to Costs and Protest File: B-253811.2; B-253811.3; B-253811.4 Date: November 24, 1993 93-2 CPD 306

Matter of: Hughes Aircraft Company--Request for Reconsideration; Entitlement to Costs and Protest File: B-253811.2; B-253811.3; B-253811.4 Date: November 24, 1993 93-2 CPD 306

PROCUREMENT Competitive Negotiation Requests for proposals Cancellation Justification GAO review Agency's partial cancellation of a request for proposals is reasonable where the agency no longer has a current need for the items. PROCUREMENT Bid Protests GAO procedures Preparation costs Administrative remedies Protester is not entitled to the costs of filing and pursuing its protest, where the protest elicited corrective action on the part of the agency 10 days after it was filed with the General Accounting Office, even though the protester filed an agency-level protest on the same matter.

Attorneys

DECISION

We affirm our dismissal and deny the protest and claim for costs.

The requirement was synopsized in the Commerce Business Daily which advised that award would be made only to approved sources. It listed Hughes and Phillips Defense Systems Pty Limited of Australia as the only approved sources,[1] but provided a mechanism for other sources to become approved. The RFP, for a 3-year base period and two 1-year options, contained six WRA/SRA (Weapon Repairable Assemblies/Spare Repairable Assemblies) groupings, and stated that evaluation of proposals would be based on the low overall firm, fixed price for each WRA/SRA grouping inclusive of the two option periods.

Proposals were received from Hughes, the incumbent contractor, and NSWC. Hughes was the low offeror and was awarded a contract on April 20, 1993, for the following four item groups:

1. Receiver/Exciter 2. Antenna 3. Processor 4. Rack Assembly (components)

NSWC was the low offeror and was awarded a contract on April 20, 1993, for the following two item groups:

1. Transmitter 2. Computer Supply

On May 12, Hughes was given a debriefing by the Navy and was provided limited information concerning NSWC's source approval. On May 25, Hughes filed an agency-level protest, alleging the following:

1. NSWC has not qualified as an approved source;

2. NSWC did not identify, much less have, the required test equipment to perform the contract;

3. NSWC did not comply with the solicitation's CAMMS II Asset Reporting Requirement; and

4. The solicitation failed to notify prospective offerors of the possibility of an award to a Government entity.

By letter dated June 2, the Navy dismissed the protest as untimely.

On June 18, Hughes filed a protest with our Office and basically argued that the award to NSWC was improper because NSWC was not qualified to perform the work. The Navy advised that it was terminating NSWC's contract and reported that it no longer had a current need for the items awarded to NSWC. On June 29, we dismissed the protest as academic based on the Navy's decision.

In its request for reconsideration, Hughes argues that its protest was not academic because it seeks award of the items that had been awarded to NSWC. In its July 16 protest, Hughes argues that the agency in effect partially canceled the RFP but had no reasonable basis for doing so.

The propriety of the dismissal of Hughes's initial protest and the validity of Hughes's July 16 protest raise the same issue, i.e., whether the contracting activity's decision to cancel the requirement was reasonable.

The Navy's decision to effectively cancel the requirement was based on its determination that there was no immediate need for the items originally awarded to NSWC. In this connection, the agency reports that no orders were placed with NSWC from the time of award on April 20, 1993, until the award was terminated on June 28. In fact, in June, the agency specifically determined that the item would not be needed prior to October 1.

In a negotiated procurement such as this one, the contracting activity has broad authority to decide whether to cancel a solicitation and need only establish a reasonable basis for the cancellation. Brackett Aircraft Radio Co., B-246282, Jan. 8, 1992, 92-1 CPD Para. 43. There is no requirement for an agency to award a contract for items for which it has no current need. Since there is no dispute that the items were not needed at the time the Navy canceled the requirement, that alone provides a proper basis for cancellation. See California Inflatables Co., Inc., B-241729, Feb. 6, 1991, 91-1 CPD Para. 133. We therefore affirm the dismissal and deny the protest.

Since the agency took corrective action within 10 days of the filing of the initial protest, we also find no basis for Hughes's claim for protest costs. We will find an entitlement to costs only where an agency unduly delayed taking corrective action in the face of a clearly meritorious protest. Oklahoma Indian Corp.--Claim for Costs, 70 Comp.Gen. 558 (1991), 91-2 CPD Para. 558. Because in this instance the agency took prompt corrective action, there is no basis for determining that the payment of protest costs is warranted. See Dynair Elecs., Inc.--Request for Declaration of Entitlement to Costs, B-244290.2, Sept. 18, 1991, 91-2 CPD Para. 260.

Hughes argues that the promptness of the corrective action should be measured from the time of its agency-level protest. Hughes contends that in prior decisions of our Office where we refused to consider the promptness of an agency's corrective action from the time of an agency-level protest, the issues presented in the protester's agency- level protest were subjective in nature and not clearly meritorious. See PLX, Inc.--Request for Declaration of Entitlement to Costs, B-251575.2, Mar. 10, 1993, 93-1 CPD Para. 224; Aquidneck Mgmt. Assocs., Inc.--Entitlement to Costs, B-250479.2, Mar. 17, 1993, 93-1 CPD Para. 240; R.J. Sanders, Inc.--Claim for Costs, B-245388.2, Apr. 14, 1992, 92-1 CPD Para. 362. Hughes maintains that the issues here were objective in nature, i.e., whether NSWC was an approved source, and that the Navy should have instituted corrective action sooner based on the agency-level protest.

Our refusal to measure the promptness of the agency's corrective action from the time a protester files an agency-level protest is based on our bid protest jurisdiction as defined by the Competition in Contracting Act (CICA), 31 U.S.C. Secs. 3551(1), 3552 (1988), and has nothing to do with the nature of the issue presented by the protester. CICA limits our protest jurisdiction to written objections to a solicitation, proposed award, or award of a contract filed with our Office. Our authority to declare entitlement to protest costs extends to parties whose protests to our Office support a finding that a procurement statute or regulation was violated. 31 U.S.C. Sec. 3554(c)(1). The provision in our Regulations providing for the possibility of an award of protest costs where an agency takes corrective action in response to a protest with our Office is intended to ensure fair treatment of protesters who make substantial investments of time and resources to pursue clearly meritorious protests in this forum, but who do not have the opportunity to recoup their costs because of agency corrective actions. R.J. Sanders, Inc.--Claim for Costs, supra. It is not intended to ensure the fairness of agency-level processes occurring prior to the filing of a protest with our Office. Id.; Purdy Corp.--Claim for Costs, B-249067.2, Aug. 13, 1992, 92-2 CPD Para. 105.

Our June 29 dismissal is affirmed and the protest and claim for costs are denied.

1. Another source, AEG/TELEFUNKEN System Technik of Germany, was later added.