Protest challenging agency’s cancellation of a solicitation is denied. The agency alleged that it cancelled the solicitation because it lacked sufficient funding for the contract. The agency noted that the price of the offers it received greatly exceeded the government estimate. GAO found that given the significant disparity between the offers and the government estimate, the agency reasonably cancelled the solicitation to reevaluate its requirements.
The Department of Veterans Affairs posted a request for qualification statements seeking architect-engineer services for a project to develop medical centers. The procurement was conducted in accordance with the Selection of Architects and Engineers Statute as implemented by FAR subpart 36.6. The procedures under this statute do no include price competition. Instead, the agency identifies the most highly qualified firm. It then sends them an RFP and attempts to negotiate a contract with the firm at a reasonable price.
After receiving proposals, the VA identified the most highly qualified firm and began negotiations. Those negotiations, however, fell through. The VA then sent the RFP to AE Works, the next most highly qualified firm. But negotiations with AE Works were terminated because the company’s price exceeded the VA’s funding for the project.
AE Works filed a protest with the GAO, objecting the termination of negotiations. In response to the protest, the VA took corrective action, stating that it was cancelling the solicitation to reevaluate its requirements. GAO dismissed the protest as academic.
AW Works the filed a second protest, alleging that cancellation of the RFP was unwarranted. Rather, AE Works contended, the VA should be required to engage in negotiations.
GAO rejected AE Works’ position. So long as there is a reasonable basis for doing so, an agency may cancel a solicitation no matter when the information precipitating cancellation first arises. An agency’s determination that funds are not available is sufficient to cancel a solicitation. Here, the government estimate for the project was $1.3 million. The offers received were 3-4 times greater than the estimate. In its discretion, the VA determined that the available funds were insufficient such that it could not come to an agreement with any offeror.
AE Works’ argument that the VA was required to negotiates, GAO reasoned, skirted the real issue, which was whether the decision to cancel was reasonable. Given the significant disparity between offers and the estimate, GAO could not say that the decision to cancel was unreasonable.
AE Works is represented by Nicholas T. Solosky of Fox Rothschild LLP. The agency is represented by Tyler W. Brown and Kathleen Ellis of the Department of Veterans Affairs. GAO attorneys Hannah G. Barnes and Christina Sklarew participated in the preparation of the decision.
