Can an Agency Cancel the Solicitation For Any Reason?
The Government Accountability Office (“GAO”) recently denied MetroStar Systems’ bid protest. MetroStar sought help after the Defense Media Activity (“DMA”), a part of the Department of Defense, cancelled its award to MetroStar for information technology (“IT”) services.
The Initial Win
Last year, the DMA issued a Request for Proposals for a 1-year contract (with three 1-year options) to provide various on-site IT services, principally at the DMA’s headquarters at Fort George Meade, Maryland. After receiving a number of proposals, the DMA selected Vykin Corporation. Having been looked over, an unhappy MetroStar filed a bid protest with the GAO. In response to the protest, the DMA informed the GAO that it would reevaluate the proposals and make a new selection. The second time around, the DMA chose MetroStar.
Followed by a Loss
About six months later, the DMA asked MetroStar to hold open its bid for another two months. The DMA stated that the reevaluation caused the holdup. MetroStar agreed to the DMA’s request. Nearly two months later, without any other correspondence, MetroStar emailed the DMA and asked if it needed another extension. The DMA replied that it had decided to cancel the solicitation and would no longer require MetroStar’s services.
MetroStar immediately filed another protest with the GAO arguing that the DMA’s decision was pretext; after receiving MetroStar’s original protest, the DMA got cold feet about the entire project and decided to scrap it altogether.
Reasons for Cancellation
In response, the DMA provided three independent reasons for its decision to cancel the solicitation: 1) the DMA planned to terminate its in-house Server and transfer the Server’s content to a commercial provider (so that IT support for the Server was no longer needed); 2) new guidelines required that the DMA (and its contractor personnel) be accredited using newer, more stringent standards that were not included in the solicitation (which would significantly increase prices); and 3) the DMA has implemented a new, worldwide, centralized IT architecture that calls for fundamentally more support from the contractor (i.e. MetroStar would be called to service 34 DMA locations as opposed to simply the Fort George Meade location).
What the Law Says
According to GAO precedent, an agency may cancel the solicitation, no matter how far along in the process the need arises, as long as the agency has a reasonable basis for canceling the solicitation. However, when, like here, improper motives are alleged, the GAO will closely examine the reasonableness of the agency’s actions.
Here, even under this close scrutiny, the GAO determined that the DMA did act reasonably when it cancelled the solicitation. The GAO was particularly persuaded by the DMA’s third justification – that the new requirements would call for MetroStar to provide service in essentially 34 times as many locations as originally solicited.
Your Bid Protest
Although MetroStar ultimately did not get the contract, their situation demonstrates how useful a bid protest can be for businesses engaged in contract work. If your business is involved in government contracting and procurement, the experienced attorneys at Whitcomb Law, P.C. can help you protect your rights.