BNUMBER:  B-278380.3 
DATE:  June 17, 1998
TITLE: QuanTech, Inc.--Costs, B-278380.3, June 17, 1998
**********************************************************************

Matter of:QuanTech, Inc.--Costs

File:     B-278380.3

Date:June 17, 1998

Alan M. Grayson, Esq., and Ira E. Hoffman, Esq., Grayson and 
Associates, for the protester.
Terry Hart Lee, Esq., Department of Commerce, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Request that General Accounting Office reinstate an earlier 
protest and issue a decision on the merits after an agency cancels the 
underlying solicitation--or, alternatively, recommend reimbursement of 
the cost of pursuing that protest--is denied where the agency 
responded to the protest by canceling its initial award shortly after 
the protest was filed and reopening the competition, thus rendering 
the earlier protest academic, prior to properly canceling the 
procurement.

2.  Protester is not eligible to recover its proposal preparation 
costs where the solicitation was canceled before award was made, the 
decision to cancel appears reasonable, and the protester expressly 
declines to challenge the basis for the cancellation decision.

DECISION

QuanTech, Inc. requests that our Office recommend that it recover its 
proposal preparation costs, and the costs of filing and pursuing its 
earlier protest concerning request for proposals (RFP) No. 
52-EANF-7-00025, issued by the Department of Commerce, National 
Oceanic and Atmospheric Administration (NOAA), for fishery observers 
in the northwest Atlantic Ocean.  Alternatively, QuanTech asks that we 
reopen its earlier protest and issue a decision on the merits. 

We deny the request.

NOAA issued the RFP here on January 21, 1997, and made an initial 
award to Atlantic Inspection Services, Inc. (AIS) on September 29.  
QuanTech filed a protest of the award with our Office on October 14, 
and a second disappointed offeror filed a protest shortly thereafter.  
On November 3--less than 3 weeks after QuanTech filed its protest--the 
agency agreed to take corrective action, and QuanTech withdrew its 
protest.  In its letter of November 3, the agency explained that it 
intended to:

     clarify the evaluation factors set out in the RFP (and to notify 
     offerors thereof), to notify offerors in the competitive range of 
     all material deficiencies and weaknesses in their proposals (both 
     technical and cost), re-open, schedule and hold meaningful 
     discussions, request and evaluate a new round of [best and final 
     offers (BAFO)] and then make an award.

After QuanTech's protest was withdrawn, the agency took the following 
actions:  it terminated the award to AIS on November 5; it twice 
amended section M of the RFP, on December 4 and 16; it held 
face-to-face discussions with all competitive range offerors, 
including QuanTech, on January 14 and 15, 1998; and it requested and 
received BAFOs, which were sent to the evaluation committee for review 
on February 9.  By memorandum dated March 19, however, the project 
director for the fisheries effort here requested that the contracting 
officer cancel the pending procurement because of significant changes 
to the fisheries program since issuance of the original RFP.  On March 
20, the contracting officer canceled the RFP and this request 
followed.

As a preliminary matter, there is no legal basis for our Office to 
reopen QuanTech's protest and render a decision.  The agency has 
effectively conceded that the initial award decision was improper, and 
terminated the contract awarded to AIS.  Thus, the procurement 
decision that QuanTech would have us consider no longer exists, and 
any dispute about that decision is academic.  Pemco Aeroplex, 
Inc.--Recon. and Costs, B-275587.5, B-275587.6, Oct. 14, 1997, 97-2 
CPD  para.  102 at 5.

QuanTech also seeks reimbursement of its proposal preparation and 
protest costs because the agency's decision to cancel the procurement 
means that NOAA will not complete the claimed corrective action--i.e., 
the agency will not make award as it represented in its corrective 
action letter of November 3 (quoted above).  In its comments on the 
agency report, QuanTech expressly concedes that an agency may properly 
cancel an RFP when its needs change, and QuanTech does not challenge 
the agency's decision to cancel here.  Instead, it argues that since 
no contract will be awarded, it should be paid both its proposal 
preparation and protest costs.  Again, we disagree.

With respect to protest costs, QuanTech correctly notes that our 
Office may recommend that a protester be reimbursed the costs of 
filing and pursuing a protest where the contracting agency decides to 
take corrective action in response to the protest.  4 C.F.R.  sec.  21.8(e) 
(1998).  Such recommendations are generally based upon a concern that 
an agency has taken longer than necessary to initiate corrective 
action in the face of a clearly meritorious protest, thereby causing 
protesters to expend unnecessary time and resources to make further 
use of the protest process in order to obtain relief.  Pemco Aeroplex, 
Inc., supra.  The decision by the agency here to initiate corrective 
action in response to QuanTech's protest was made less  than 3 weeks 
after the protest was filed.  As a result, QuanTech was not required 
to file comments in defense of its protest. Under these circumstances, 
recovery of protest costs is not appropriate.  See Dynair Elecs., 
Inc.--Declaration of Entitlement, B-244290.2, Sept. 18, 1991, 91-2 CPD  para.  
260 at 2 (where agency took corrective action within 4 weeks of 
protest, agency did not unduly delay taking action and request for 
costs is denied).

Also, the fact that the agency did not completely implement the 
corrective action, standing alone, does not warrant payment of protest 
costs.  There is no evidence that at the time it offered the 
corrective action, the agency had any intention of not carrying it out 
fully; in fact, as noted above, the corrective action was carried out 
substantially as promised, and at no point did the agency unreasonably 
delay the competition.  The only reason that the process was not 
brought to conclusion with a new award is that due to changed 
circumstances--i.e., significant changes in the fisheries program--the 
agency concluded that the RFP no longer reflected its needs, and the 
propriety of the cancellation is not in dispute.  Since the agency 
made a good faith effort to implement its corrective action, and there 
is no evidence of undue delay, we have no basis to recommend that 
QuanTech recover its protest costs.

With respect to its proposal preparation costs, QuanTech seeks more 
than it is due.  The protest--which apparently had merit--resulted in 
a decision to reopen the competition, and QuanTech participated in 
that reopened competition on the same footing as the other competitive 
range offerors.  Thus, QuanTech--and the others--faced equally the 
potential danger of a proper decision to cancel the procurement.  

The situation here is analogous to that in Orange Personnel Servs., 
Inc.--Recon.; Eastex Maritime, Inc.--Modification, B-256164.2, 
B-256164.3, Jan. 18, 1995, 95-1 CPD  para.  26.  There, after our Office 
sustained Eastex's protest and concluded that it should receive the 
award, the agency properly canceled the underlying procurement.  Since 
the procurement was properly canceled, we concluded that the protester 
should not recover its bid preparation costs, even though there was no 
doubt that it was in line for award.  Id. at 3.  Here, QuanTech cannot 
even claim--as did Eastex--that it was in line for award at the time 
of the cancellation.  Instead, QuanTech is no more entitled to payment 
of its proposal preparation costs than any of the other competitive 
range offerors.  Absent a showing that the cancellation was 
improper--and QuanTech does not maintain that it was--QuanTech is not 
entitled to its proposal preparation costs.  Id.

The request is denied.

Comptroller General
of the United States