Agency Reasonably Cancelled Solicitation that Did Not Satisfy Its Needs; Alliance Technology Group, LLC, GAO B-418558

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Protest challenging the cancellation of a solicitation is denied. The protester argued that the agency cancelled the solicitation as a pretext to avoid completing a corrective action and to give other offerors a second chance to bid. GAO noted that an agency may cancel a solicitation if it no longer reflects the agency’s needs. Here, the agency’s needs had changed significantly after issuance of the solicitation. The cancellation was justified.

The Defense Information System Agency (DISA) awarded a task order for equipment for the agency’s Full Packet Capture system. The Full Packet Capture system listens to and captures electronic network traffic. A disappointed bidder, Alliance Technology Group, filed a protest challenging the task order award with GAO. In response to the protest, DISA took corrective action to reevaluate quotes. GAO dismissed Alliance’s protest as academic.

Instead of reevaluating proposals, however, DISA cancelled the solicitation. DISA then posted a new solicitation that changed some of the task order requirements. Alliance filed a second protest, alleging that cancellation of the original solicitation and issuance of a new solicitation was unreasonable. Alliance claimed that the new solicitation was pretext for avoiding the corrective action and to give other offerors a second bit at the apple.

DISA argued that GAO should dismiss the protest as untimely. Protests must be filed no later than 10 days after the protester knows the basis of their protest. DISA cancelled the solicitation on February 11, 2020. Alliance did not file it protest until March 9, which was more than 10 days after cancellation.

GAO, however, found the protest was timely. While DISA cancelled the solicitation on February 11, the notice of cancellation did not set forth the agency’s reasons for cancellation. Alliance did not learn the basis of its protest—i.e., that the cancellation was pretextual—until DISA issued the new solicitation on February 27. It was not until Alliance was able to compare the old and new solicitation that it discovered its protest grounds. Alliance had timely filed its protest within 10 days of February 27.

Next, DISA argued that GAO should dismiss for lack of jurisdiction. The Federal Acquisition Streamlining Act (FASA) of 1994 provides that GAO is not authorized to hear protests of DoD task orders unless the value of the order exceeds $25 million. While the initial solicitation contemplated a task order in excess of $40 million, the new solicitation contemplated an award less than $25 million.

But GAO found that the FASA jurisdictional bar did not apply to the cancellation of solicitation because cancellation is a discrete procurement action involving a preliminary procurement decision. Alliance was protesting the decision to cancel the previous solicitation and not necessarily the issuance of a new solicitation. Rather, Alliance was only using the new solicitation as evidence to support its protest allegations concerning cancellation of the old solicitation.

Although it ruled in Alliance’s favor on the preliminary procedural matters, GAO was less impressed with the merits of Alliance’s protest. An agency has broad discretion to cancel a solicitation. An agency only needs to establish a reasonable basis for cancellation. A reasonable basis exists when an agency concludes that a solicitation does not accurately reflect its needs.

Here, GAO found that DISA had identified several instances where the old RFQ did not reflect its needs. In particular, DISA had determined that it no longer required the awardee to store information as long or to install equipment. Thus, under the old solicitation, DISA would be paying for services it did not need. DISA had demonstrated a reasonable basis for cancelling the original solicitation.

Alliance is represented by Thomas K. David, Kenneth D. Brody, and Katherine A. David of David, Brody & Dondershine, LLP. The agency is represented by Anthony J. Balestreri and Dan C. McIntosh of the Defense Information System Agency. GAO attorneys Raymond Richards, Jonathan L. Kang, and Laura Eyester participated in the preparation of the decision.

GAO - Alliance Technology Group, LLC