BNUMBER:  B-270204.2
DATE:  May 9, 1996
TITLE:  Department of Health and Human Services--Reconsideration

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Matter of:Department of Health and Human Services--Reconsideration

File:     B-270204.2

Date:     May 9, 1996

Michael Colvin, Department of Health and Human Services, for the 
requestor.
John T. Vanderveen for VSA International Corporation, an intervenor.
John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Prior decision sustaining a protest against the award of a contract 
and recommending that the contract be terminated and award made to the 
protester is modified to provide that the agency need not terminate 
the awardee's contract and make award to the protester, where the 
protester and agency agree that termination of the contract at this 
point is not in the parties best interests, and the record supports 
their position. 

DECISION

The Department of Health and Human Services (HHS) requests that the 
recommendation of our decision VSA Int'l Corp., B-270204, Feb. 16, 
1996, 96-1 CPD  para.  101, be modified.  In that case, we sustained VSA 
International Corporation's (VSA) protest against the award of a 
contract to North Central Community Based Services, Inc. (NCCBS) under 
invitation for bids (IFB) No. 95-14/MAG, issued by the Indian Health 
Service, HHS, and recommended that the agency terminate its contract 
with NCCBS and make award to VSA.  HHS requests that our 
recommendation be modified to provide for the continued performance of 
the contract by NCCBS, and payment by HHS of VSA's costs of preparing 
its bid and pursuing its protest.

Because VSA did not file its protest with our Office within the time 
period that would have caused an automatic stay of performance under 
the Competition in Contracting Act, 31 U.S.C.  sec.  3553(d) (1994), NCCBS 
has been performing this contract since September 1995.  The agency 
asserts that if it is required to terminate NCCBS' contract, "[t]he 
probability that any useful product would be delivered at the end of 
the contract period . . . is almost zero."  VSA agrees, stating that 
"the potential for complete disruption of the project exists" if the 
agency terminates the contract at this point, and adds that under the 
circumstances, the termination of the contract "might not well be in 
the best interests of the [Native American] tribes involved."

Under the circumstances and based on our review of the record, we 
modify our recommendation.  Specifically, we withdraw our 
recommendation that the agency terminate NCCBS' contract for the 
convenience of the government and make an award to VSA, and instead 
recommend that VSA be reimbursed the costs of preparing its bid, as 
well as its costs of responding to the agency's request for 
reconsideration.  See Science Applications Int'l Corp.; Department of 
the Navy--Recon., 71 Comp. Gen. 481 (1992), 92-2 CPD  para.  73.  VSA should 
submit its certified claim for these costs directly to the agency, 
within 90 working days of its receipt of this decision.  Bid Protest 
Regulations, section 21.8(f), 60 Fed. Reg. 40,737, 40,743 (Aug. 10, 
1995) (to be codified at 4 C.F.R.  sec.  21.8(f)).  VSA remains entitled to 
the costs associated with pursuing its initial protest to our Office.

Comptroller General
of the United States