BNUMBER:  B-276149.2; B-276537.2 
DATE:  July 31, 1997
TITLE: American Consulting Services, Inc., B-276149.2; B-276537.2,
July 31, 1997
**********************************************************************

Matter of:American Consulting Services, Inc.

File:     B-276149.2; B-276537.2

Date:July 31, 1997

Terrence M. O'Connor, Esq., and Shirley Maznicki, for the protester.
Thomas J. Duffy, Esq., Captain Philip T. McCaffrey and John F. Guckert 
Jr., Esq., Department of the Army, for the agency.
Karin L. Genis, Esq., for the Small Business Administration.
Behn Miller, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protest challenging post-bid opening cancellation of invitation 
for bids on ground that cancellation was prompted solely by 
contracting agency's bad faith intent to avoid awarding a contract to 
the protester is denied where there is no evidence of such bad faith 
and where the canceled solicitation did not reflect the contracting 
agency's minimum needs.

2.  Protest that contracting agency transferred its requirement for 
remedial education services to the Small Business Administration's 
(SBA) section 8(a) contracting program in a bad faith attempt to avoid 
continued performance under a small business set-aside contract 
previously awarded to the protester and in retaliation for filing of a 
protest is denied where record shows that:  (1) significantly higher 
testing success rate and independent research at other Army 
installations convinced the contracting activity to convert the 
current instructor/classroom requirement to an automated tutorial 
program; (2) agency's decision to convert the procurement from an 
instructor/classroom format to an automated tutorial program was made 
several months prior to the contractor's current protest challenging 
cancellation of another educational services solicitation; and (3) the 
contracting agency properly classified the offered procurement as a 
new requirement.

DECISION

American Consulting Services, Inc. (ACS) protests the Department of 
the Army's cancellation of invitation for bids (IFB) No. 
DAKF36-97-B-0002, for certification and  accreditation of the Primary 
Leadership Development Course (PLDC) at the Fort Drum, New York, 
Noncommissioned Officer's (NCO) Academy.  ACS was the apparent low 
bidder under the canceled IFB.  ACS also protests the failure of the 
Army to exercise the final option of its remedial education services 
contract, No. DAKF36-94-D-0015, and the transfer of this requirement 
to the Small Business Administration's (SBA) section 8(a) program.  
ACS contends that both the IFB cancellation and the transfer of the 
remedial education services requirement to the section 8(a) program 
reflect a bad faith attempt by the Army to avoid contract awards to 
ACS.  Because both protests arise from the same allegation of bad 
faith, we address them in one decision.

We deny the protests.

BACKGROUND

The PLDC IFB was issued on October 17, 1995, and contemplated the 
award of a firm, fixed-price contract for "all personnel, equipment 
and materials . . . to perform all services necessary to certify and 
accredit" the PLDC course for "6 [college] credit hours per student."  
Of significance to this protest, the IFB identified each PLDC 
"session" or "class" as being comprised of "approximately 80 
students"; bidders were also advised that "approximately 18 contact 
hours are available to the contractor during the PLDC" to provide the 
supplemental instruction necessary to obtain the required college 
accreditation.  Originally, the IFB had limited competition to 
accredited colleges and universities; however, on November 15, the 
Army issued an amendment which expanded competition to include 
business concerns--such as ACS--which were "able to obtain the 
services of one fully accredited college or university." 

At the November 26 bid opening, only two bids were submitted.  ACS was 
the apparent low bidder ($172,800); Jefferson Community College 
(JCC)--the incumbent for the PLDC requirement--submitted the second 
lowest-priced bid ($205,632).  Shortly after bid opening, the contract 
specialist contacted ACS and asked for verification of its bid price; 
the specialist also asked ACS to identify the name of the college with 
which it would be subcontracting, and to provide several contract 
references.  Despite several rounds of facsimile correspondence 
between the contract specialist and ACS, the Army never received any 
evidence from ACS regarding its university or college arrangements for 
the PLDC course.

Since August 1994, ACS had been performing a different contract for 
remedial education services--referred to as the "FAST [Functional 
Academic Skills Training] requirement"--at Fort Drum.  On December 5, 
1995, the contract specialist assigned to the PLDC competition asked 
the Fort Drum contract administrator who oversaw ACS' performance of 
the FAST contract to submit a reference for ACS.  That same day, the 
FAST contract administrator executed a reference in which she 
described ACS as an "administrative nightmare."  Although the 
memorandum acknowledged that ACS' instructional services were 
satisfactory, the FAST contract administrator described ACS' 
"operations and management in Maryland" as unsatisfactory due to  
"cash flow problems," a burdensome bi-monthly invoicing arrangement, 
several instances of Service Contract Act wage rate violations, and 
poor communications with Fort Drum.

On December 11, after ACS had failed to respond to the contract 
specialist's numerous requests for college subcontract and bid pricing 
information, and as a result of the FAST contract administrator's 
December 5 memorandum, the contract specialist issued a memorandum to 
the contracting officer recommending that Fort Drum find ACS 
nonresponsible.  Because ACS is a small business, the contracting 
officer issued a request to the SBA for a certificate of competency 
(COC) review of ACS.

From January 9 until January 17, 1996, the SBA conducted its COC 
review.  On January 21, the SBA issued a COC to ACS.  As discussed 
further below, while the SBA's COC review was ongoing, the Army 
discovered several deficiencies in the PLDC IFB; on January 31, as a 
result of these deficiencies, the Army canceled the IFB.  On February 
5, the Army notified ACS of the IFB's cancellation; on March 3, ACS 
learned that the agency would not exercise the final option of its 
1994 FAST contract because the services had been offered to the SBA 
under the section 8(a) program as a new requirement.[1]  On April 30, 
ACS filed these protests.

Our Office conducted a hearing in this matter in which the protester's 
president, vice president, educational consultant, and 15 Fort Drum 
contracting officials testified.[2]  Two SBA officials and a 
Department of Labor (DOL) official also testified.  As discussed 
below, we find no evidence of bad faith or bias on the part of any 
government official, and we conclude that the cancellation of the IFB 
and the transfer of the FAST requirement to the section 8(a) program 
were unobjectionable.

CANCELLATION OF THE IFB

Because of the potential adverse impact on the competitive bidding 
system of cancellation after bid prices have been exposed, a 
contracting agency must have a compelling reason to cancel an IFB 
after bid opening.  Federal Acquisition Regulation (FAR)  sec.  
14.404-1(a)(1); Days Inn Marina, B-254913, Jan. 18, 1994, 94-1 CPD  para.  
23 at 2.  The regulations authorizing cancellation after bid opening 
specify that inadequate or ambiguous specifications may constitute a 
compelling reason to cancel an IFB.  FAR  sec.  14.404-1(c)(1); see 
Ferguson-Williams, Inc., B-258460, B-258461, Jan. 24, 1995, 95-1 CPD  para.  
39 at 4.  Contracting officials have broad discretion to determine 
whether a compelling reason to cancel exists, and our review is 
limited to considering the reasonableness of their decision.  H. 
Angelo & Co., Inc., B-260680.2, Aug. 21, 1995, 95-2 CPD  para.  74 at 3. 

The Army reports that it canceled the IFB primarily because it did not 
accurately reflect the number of instructors to be provided.  The Army 
also reports that cancellation was required because the IFB failed to 
place a ceiling on the course transcript fee which each student could 
be charged by the contractor, and failed to require an on-site project 
manager.

With the exception of the project manager requirement, ACS does not 
dispute the agency's description of its minimum needs.  Instead, ACS 
maintains that because it is willing to provide the additional 
instructors and transcript services at no extra cost, the Army's 
cancellation is unwarranted.  In this regard, ACS maintains that the 
only reason the Army has added the project management requirement, and 
is otherwise pursuing cancellation of the solicitation instead of a 
post-award modification, is that the Army wants to avoid a contract 
award to ACS.  According to the protester, the Army's 
mischaracterization of ACS' performance history and the agency's 
post-bid opening discovery of the original solicitation deficiencies 
demonstrate the Army's bad faith against ACS.

Because government officials are presumed to act in good faith, we do 
not attribute unfair or prejudicial motives to them on the basis of 
mere inference or supposition.  See Lancaster & Co., B-254418, Dec. 
14, 1993, 93-2 CPD  para.  319 at 7.  Where, as here, a protester alleges 
bias or bad faith on the part of a procurement official, our focus is 
on whether the official exerted improper influence in the procurement 
on behalf of the awardee or against the protester.  See Prose, Inc., 
B-259016, Feb. 28, 1995, 95-1 CPD  para.  123 at 3.  To show bad faith, a 
protester must show that the contracting agency directed its actions 
with the specific and malicious intent to injure the protester.  See 
Robertson Leasing Corp., B-275152, Jan. 27, 1997, 97-1 CPD  para.  49 at 4.

The crux of the protester's bad faith allegations appears to derive 
from the protester's disagreement with the conclusions expressed in 
the FAST contract administrator's December 5, 1996, memorandum, in 
which she characterized ACS as an "administrative nightmare."  ACS 
argues that this document reflects the unreasonable attitude of the 
contract administration department towards ACS, and that the 
conclusions set forth in the memo are erroneous.  First, contrary to 
the memorandum's description, ACS maintains that while it has been 
involved in wage rate inquiries, it has not committed any labor or 
wage rate "violations."  ACS also maintains that the Army has no basis 
for characterizing ACS as having "cash flow problems."  Finally, ACS 
maintains that all the administrative difficulties cited by the FAST 
contract administrator in the December 5 memorandum were caused by the 
Fort Drum contract administration staff.

We find ACS' position to be unsupported by the record.  First, the 
documents in the record, as well as testimony by numerous witnesses, 
corroborate the description of ACS' performance set forth in the 
December 5 memorandum.  Despite ACS' contentions to the contrary, 
documents in the record and the cognizant DOL investigator's testimony 
unequivocally show that on at least two occasions--November 28, 1994 
and August 14, 1996--ACS failed to comply with applicable wage rate 
determinations.  Although each situation was ultimately corrected by 
ACS, the DOL investigator characterized these difficulties as 
"violations" and testified that ACS' response to the 1996 violations 
was not prompt; the August 1996 wage rate violations were not 
rectified by ACS until November of that year.

In addition, although ACS maintains that the Army's conclusion that 
ACS suffered from "cash flow problems" was unfounded, testimony from 
many of the Fort Drum personnel--including the FAST contract 
administrator--shows that the personnel based this conclusion on the 
ACS vice president's frequent telephone inquiries regarding payment of 
the bi-monthly invoices; the contractor's refusal to perform during 
the government's November 1995 furlough; the firm's documented wage 
rate violations; and the fact that the ACS vice president had advised 
the FAST contract administrator that he was paying employees' wages 
out of his own pocket.  VT I: 11:58, 12:58, 13:07, and 14:17; VT II: 
13:59 and 14:18.  Although ACS disagrees with the Army's conclusions, 
on the record before us, we cannot say that the FAST contract 
administrator's concerns regarding ACS' financial status were 
arbitrary, unfounded, or otherwise made in bad faith.[3]

Further, despite ACS' allegations to the contrary, we see no 
persuasive evidence in the record that the Army's decision to cancel 
the PLDC solicitation otherwise was motivated by bad faith or ill will 
toward ACS.  All of the Fort Drum and government witnesses testified 
that they were unaware of any ill will harbored against ACS, or any 
attempt on the part of any government personnel to steer Fort Drum 
contracts away from the protester.  VT I: 12:43, 12:47, 14:46, 15:39, 
16:19, and 17:11; VT II: 14:09 and 15:33.  In particular, the contract 
specialist--characterized by ACS as the sole Fort Drum contracting 
official ACS believed to be honest and trustworthy, VT I: 11:20-- 
testified that no one pressured her to cancel the PLDC IFB, that there 
was "no animosity against ACS that I know of," and that she 
recommended cancellation of the original IFB based on the 
specification deficiencies cited above.  VT II: 12:14.  The contract 
specialist also noted that because the Army had failed to detect the 
specification deficiencies earlier, she was "concerned" and agreed 
with ACS that the "timing [of the cancellation decision] looks bad"; 
however, the contract specialist repeatedly and emphatically stated 
that "[the cancellation] truly did fall out that way."[4]  VT II: 
12:16 and 12:59.

To support its argument that the cancellation was done in bad faith, 
ACS points to the fact that the defects in the solicitation were not 
discovered until after bid opening.  In response, the Army furnished 
the following explanation for why the contract specialist did not 
realize that the IFB was defective until after bid opening.

When JCC began performing the predecessor PLDC contract, the prior 
Fort Drum Commandant--the head of the NCO Academy--asked JCC to 
perform according to the Army's actual minimum needs--using three 
instructors to teach three concurrent platoon courses; providing a 
full-time project manager; and charging modest transcript fees--but 
never executed a modification of the predecessor solicitation's terms.  
Instead, JCC performed the additional requirements according to an 
unwritten "gentlemen's agreement" between the commandant and the 
president of JCC--which was never disclosed to the Fort Drum contract 
administration or contracting personnel.  VT I: 15:55.  When it was 
time to resolicit the PLDC services, the contract specialist gave a 
copy of the prior solicitation's terms to the new Fort Drum commandant 
for comment.[5]  VT II: 11:20.  The commandant approved the 
predecessor terms for resolicitation on the understanding that they 
were the terms under which the prior contract had been performed.  VT 
I: 15:54.   It was not until January 24, 1997--when one of the Fort 
Drum contract administrators was reviewing the solicitation--that the 
discrepancies between JCC's actual performance and the solicitation's 
stated terms were discovered.[6]  VT I: 15:33 and 16:18.  That same 
day, the contract specialist convened a meeting with the contract 
administrator and the new commandant.  After comparing the NCO 
Academy's actual needs with the terms of the IFB, the contract 
specialist decided to cancel the IFB because it did not reflect the 
Army's minimum requirements regarding class size, instructors, 
transcript fee costs, and project management.  VT II: 12:26.  In sum, 
there simply is no basis in the record to conclude that the timing of 
the cancellation--specifically, the failure to recognize the defects 
in the IFB until after bid opening--is evidence of bad faith toward 
ACS.

Given our conclusion that there is no evidence in the record 
establishing that the decision to cancel was made in bad faith, the 
remaining issue is whether the agency had a compelling reason to 
cancel the IFB.  FAR  sec.  14.404-1(a)(1).  We conclude that it did.

The record shows that the canceled IFB was materially defective.  
First, the solicitation did not ensure performance of the required 
accreditation instruction in accordance with the Army's actual needs.  
In this regard, the record shows that in order to award the requisite 
6 hours of college credit, the successful contractor must supplement 
the Army's nonaccredited PLDC instruction with college-certified and 
accredited instructors and written material.  Although the canceled 
IFB's pricing schedule required bidders to provide all personnel and 
supplies necessary to accredit classes comprised of "approximately 80 
students" each, the Army reports that its education regulations, as 
well as facility and scheduling constraints, in fact require all NCO 
Academy instruction--including the supplemental college instruction 
necessary to accredit the PLDC course--to be provided to groups no 
larger than 32 students.  VT I: 15:57.  Additionally, because there 
are only 18 available hours per PLDC course to provide supplemental 
instruction for each student, the PLDC instruction must be performed 
using three instructors, teaching concurrently.  Id.  According to the 
contracting officer for the PLDC procurement, this defect constituted 
the primary basis for cancellation of the IFB.  VT II: 15:36.  

Nor did the canceled IFB reflect the Army's actual transcript fee 
needs.  Under the IFB, the successful bidder must provide a transcript 
service for each PLDC student.  The Army reports that, since the PLDC 
course constitutes an enlisted soldier's first opportunity to pursue 
post-secondary and college education, and since enlistees' salaries 
may not accommodate the typical service charge of $125 per transcript, 
soldiers will be dissuaded from enrolling in the PLDC course--and 
pursuing further education opportunities--unless the contractor 
provides the transcript service at a modest cost to the Army 
student.[7]  VT I: 15:56 and 16:04.  Since the canceled IFB contained 
no ceiling on the transcript fee, the Army concluded that this defect 
also warranted cancellation.  

As noted above, ACS does not dispute the Army's position that its 
minimum needs require all instruction--including the supplemental 
instruction necessary to accomplish the PLDC accreditation--to be 
provided by means of three concurrent lectures to smaller class 
groups.  Nor does ACS disagree with the agency's transcript fee 
requirement.  Since it is apparent from the record that the IFB did 
not reflect the agency's actual needs in at least two 
respects[8]--and, in fact misled ACS into concluding that it could 
provide the supplemental instruction necessary to award college 
accreditation by means of one instructor per 80-student class--the IFB 
was clearly defective.  Under these circumstances, the agency 
reasonably determined that it had a compelling basis to cancel the IFB 
and resolicit, stating its actual requirements.[9]  Ferguson Williams, 
Inc., supra.  In this regard, although ACS suggests that the agency 
should amend the defective IFB by means of a post-award contract 
modification, due to the adverse impact which would inure to the 
competitive bidding system, a contracting agency may not award a 
contract with the intent to modify it.  See American Television Sys., 
B-220087.3, June 19, 1986, 86-1 CPD  para.  562 at 3-4, recon. denied, 
B-220087.5, Sept. 18, 1986, 86-2 CPD  para.  314.

FAILURE TO EXERCISE THE OPTION AND TRANSFER OF THE FAST REQUIREMENT

ACS protests the Army's refusal to exercise the final option of its 
FAST contract, and the subsequent transfer of this requirement to the 
SBA under the section 8(a) program.  ACS contends that these actions 
were taken in retaliation for ACS' current protest, and because of the 
ill will which the Fort Drum contract administration office harbors 
against ACS.  

To the extent ACS challenges the agency's refusal to exercise the 
final option of its FAST contract, this issue is not for our review 
since a contracting agency's decision whether to exercise an option is 
a matter of contract administration outside the scope of our bid 
protest function.  Walmac, Inc., B-244741, Oct. 22, 1991, 91-2 CPD  para.  
358 at 2.  To the extent ACS challenges the propriety of the agency's 
offering the FAST procurement to the SBA's section 8(a) program, while 
we will consider its protest, we find it lacks merit because the 
agency did not act improperly.

Section 8(a) of the Small Business Act authorizes the SBA to contract 
with government agencies and to arrange for performance of such 
contracts by awarding subcontracts to socially and economically 
disadvantaged small businesses.  15 U.S.C.  sec.  637(a) (1994).  The 
section 8(a) program's implementing regulations provide that the SBA 
will not accept procurements not previously in the 8(a) program if, 
among other circumstances, acceptance of the procurement would have an 
adverse impact on an individual small business.  13 C.F.R.  sec.  
124.309(c) (1997).  However, if the requirement being performed by the 
small business is a "new requirement," the adverse impact rule does 
not apply.  Id.  Because the Small Business Act affords the SBA and 
contracting agencies broad discretion in selecting procurements for 
the section 8(a) program, our Office reviews challenges to decisions 
to procure requirements under section 8(a) only to ensure that agency 
officials have not acted in bad faith, and that applicable regulations 
have been followed.  Bid Protest Regulations, 4 C.F.R.  sec.  21.5(b)(3) 
(1997); Grace Indus., Inc., B-274378, Nov. 8, 1996, 96-2 CPD  para.  178 at 
2.

The Army reports that although the subject matter being taught under 
the converted procurement is still remedial education skills, the 
method and curriculum for teaching the FAST program have been so 
substantially modified that the replacement procurement constitutes a 
"new requirement" within the definition set forth in the implementing 
regulation, 13 C.F.R.  sec.  124.309(c).  That regulation provides, in 
relevant part:

     The expansion or alteration of an existing requirement shall be 
     considered a new requirement where the requirement is materially 
     expanded or modified so that the ensuing requirement is not 
     substantially similar to the prior requirement due to the 
     magnitude of the expansion or alteration.

ACS disagrees with the Army's characterization of the procurement as 
"new," and contends that, because the subject matter of the 
procurement has not changed, the Army's offering of the requirement to 
the section 8(a) program was not proper and in fact was made in bad 
faith.  ACS argues that the Army's bad faith is evidenced by the 
agency's failure to advise the SBA that a small business had been 
providing the FAST services prior to the section 8(a) offering, as 
required by 13 C.F.R.  sec.  124.308(c),  which states that a contracting 
agency's section 8(a) offering letter "shall contain," in part, the 
"acquisition history, if any, of the requirement," 13 C.F.R.  sec.  
124.308(c)(9), as well as the "names and addresses of any small 
business contractors which have performed on [the offered] requirement 
during the previous 24 months." 13 C.F.R.  sec.  124.308(c)(10).  

As discussed above, there is simply no evidence in this record to 
support ACS' contentions that Fort Drum officials harbor ill will 
toward ACS.  Moreover, while ACS contends that the FAST requirement 
was transferred to the section 8(a) program in retaliation for ACS' 
protest against the PLDC IFB cancellation, the record establishes that 
the decision to procure FAST services by means of a section 8(a) 
contract was made at least 2 months prior to that protest.  VT II: 
14:55.

In early spring of 1996, the chief of Fort Drum's education office 
learned that prospective funding cuts required a reassessment of the 
NCO Academy's education programs to learn where money could be saved.  
VT II: 17:36.  With the assistance of a Fort Drum contract 
specialist--who was not involved in the PLDC procurement--the Fort 
Drum education office chief began a survey of the NCO Academy and 
learned that of all the education programs, the FAST requirement was 
the least effective.  Specifically, Fort Drum's research showed that 
in 1995, only 12 percent of the enlisted soldiers who completed the 
FAST course passed with a successful testing score (110);[10] in 1996, 
only 8 percent of the FAST enrollees passed.  After comparing the cost 
of the FAST program to the success rate statistics, the Fort Drum 
education office determined that the FAST program was not cost 
effective, and would either have to be modified or eliminated.   
Consequently, the education office began to investigate how other Army 
facilities were acquiring their FAST requirements.  VT II: 14:45 and 
17:36.

In early May, the contract specialist contacted the Army installation 
at Fort Bragg, North Carolina, and learned that its education office 
had achieved significant success in its FAST program--a 65 percent 
pass rate--by switching to a computer-based tutorial.  VT II: 14:49.  
On May 3, the contract specialist presented these results to the Fort 
Drum education office.  On October 15, Fort Drum officially decided to 
change the FAST program to the computer-based teaching approach used 
at Fort Bragg.  On October 31, the contract specialist contacted the 
cognizant SBA official to discuss the feasibility of procuring the 
requirement under the section 8(a) program; during this conversation, 
the SBA official advised the contract specialist that the procurement 
constituted a new requirement.  On November 13, Fort Drum offered the 
revised FAST program to the SBA under the section 8(a) program; on 
November 17, the SBA accepted the FAST program into the section 8(a) 
program as a new requirement.

The contract specialist and chief of the education office each 
testified that their recommendation to convert the FAST program to a 
computer-based section 8(a) contract was not retaliatory against ACS 
or otherwise motivated by bad faith.  VT II: 14:55 and 17:41.  Since 
neither of these officials was involved in the PLDC solicitation, and 
since we regard their testimony as credible, we find no evidence of 
bad faith.  

While ACS contends that the Army violated 13 C.F.R.  sec.  124.308(c)(9) 
and (10), because its offering letter allegedly did not advise the SBA 
that a small business--ACS--had been providing the FAST services, the 
SBA has since advised our Office that even if ACS' assertion is 
correct,[11] the SBA concurs in the Army's classification of the 
offered procurement as a "new requirement" within the meaning of its 
implementing regulation, 13 C.F.R.  sec.  124.309(c).  According to the 
SBA, even though the purpose of the section 8(a) FAST procurement--to 
provide basic remedial education services--has not changed, the 
offered procurement nonetheless constitutes a new requirement 
primarily because the revised curriculum requires a new performance 
approach utilizing a computer-based format and key personnel with 
significant computer expertise.  SBA also reports that it considers 
the section 8(a) FAST procurement to constitute a new requirement 
because the conversion of the FAST curriculum to a computer-based 
instruction results in significantly higher costs to the contractor, 
and expands the pool of eligible contractors to include contractors 
with computer expertise.[12]

Since SBA concurs in the Army's determination that the computer-based 
FAST procurement constitutes a new requirement, and since there is no 
evidence to substantiate ACS' contentions of bad faith or to show that 
applicable regulations were violated, we see no basis to object to the 
transfer of the FAST program to the SBA's section 8(a) program.

The protests are denied.

Comptroller General
of the United States

1. Bid opening under the revised IFB has been postponed pending our 
decision in this protest.

2. Citations to the hearing's videotape transcript are referenced as 
"VT".

3. The FAST contract administrator testified that she "made [the 
December 5 memorandum] very strong" because the contract specialist 
had previously ignored one of her recommendations to conduct a 
preaward survey of another contractor, to the Army's detriment.  VT 
II: 13:52.  The FAST contract administrator also testified that her 
objective in writing the December 5 memorandum was not to avoid a 
contract award to ACS, but to ensure that a pre-award survey was 
conducted to confirm the contractor's financial ability to perform.  
VT II: 13:40 and 13:51.

4. The contract specialist also testified that she had no reason to 
think that the FAST contract specialist who wrote the December 5 
memorandum acted in bad faith, or harbored ill will against ACS.  VT 
I: 12:58:25.

5. The new commandant had only been "on the job" for "2.5 months" when 
he received a copy of the predecessor PLDC solicitation's terms from 
the contract specialist.  VT I: 15:54.

6. The contract administrator was reviewing the solicitation so she 
could effectively administer and monitor ACS' performance of the 
contract.  VT II: 15:24.

7. The IFB stated that "[a]ny fees required for this [transcript] 
service will be borne by the student, and collection of those fees 
will be entirely the responsibility of the contractor."

8. As noted above, the Army also reports that the IFB was defective 
because it failed to include a project manager position which is 
needed by the agency to provide 10 hours of contract oversight and 10 
hours of student counseling per week.  ACS disagrees with this portion 
of the agency's cancellation rationale because it believes that the 
Army has in-house staff who could provide these services on a cheaper 
and more efficient basis.  Since we conclude that the instructor and 
transcript fee deficiencies in the original IFB warranted 
cancellation, we need not consider this aspect of ACS' challenge.

9. As noted above, the original IFB limited competition to accredited 
colleges and universities.  Although the Army removed this restriction 
by amendment to the solicitation, the record shows that ACS was the 
only bidder who received this amendment.  The Army reports that the 
removal of the original eligibility restriction should result in 
enhanced competition; we think this circumstance further supports 
cancellation in this case.  See Siemens Power Corp.; Asea Brown Boveri 
Inc., B-257167, B-257167.2, Aug. 11, 1994, 94-2 CPD  para.  160 at 3-4 
possibility that agency may receive enhanced competition that could 
result in lower costs to the government constitutes a compelling basis 
for cancellation of an IFB after bid opening where IFB failed to 
apprise prospective bidders that agency's minimum needs could be 
satisfied by two types of technical equipment).

10. In order to be eligible for reenlistment, Army soldiers must 
achieve a basic test score of 110 or higher.

11. The Army's November 13 letter which officially offered the FAST 
requirement to the SBA's section 8(a) program generally referenced an 
earlier conversation between the Fort Drum contract specialist and the 
cognizant SBA official.  At the hearing, the contract specialist 
testified--consistent with her contemporaneous memorandum of the 
telephone conversation--that she advised the SBA official that a small 
business had been performing the FAST requirement.  The SBA official 
testified that he could not recall whether or not he was ever apprised 
that a small business had been performing the FAST services, but that 
based on the contract specialist's description of the changed 
performance approach--using computerized tutorials--he concluded the 
requirement was "new."  We have no basis to doubt the contract 
specialist's veracity; we found her to be credible, sincere and 
forthcoming with extensive details about her investigation and her 
telephone conversations with the SBA. 

12. The FAST contract which ACS performed provided remedial education 
instruction to 35 students using an instructor-classroom format and a 
workbook curriculum.  Students progressed through the FAST course 
milestones according to a pre-set group curriculum pace.

In contrast, the revised FAST requirement utilizes a completely 
different teaching approach and format.  Instead of workbooks, 
students utilize computers--which have been installed with a 
self-paced remedial education tutorial software.  Unlike the contract 
which ACS was performing, the FAST tutorial course is available to 
students 24 hours a day; because each student's progression through 
the course is self-paced, no group instruction is utilized or 
necessary--and students work at varying paces, according to their 
individual needs and abilities.  Additionally, the new FAST 
requirement requires personnel to have significant computer expertise; 
in this regard, the record indicates that because the computer 
tutorial provides the actual instruction, each key personnel's ability 
to handle computer "glitches" is critical.