TITLE:  Safety Storage, Inc., B-280851.2, May 13, 1999
BNUMBER:  B-280851.2
DATE:  May 13, 1999
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Safety Storage, Inc., B-280851.2, May 13, 1999

Decision

Matter of: Safety Storage, Inc.

File: B-280851.2

Date: May 13, 1999

Sam Gdanski, Esq., Jeffrey I. Gdanski, Esq., and Scott Howard Gdanski, Esq.,
for the protester.

Michael Trovarelli, Esq., Defense Logistics Agency, for the agency.

Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency has a reasonable basis for canceling solicitation where it no longer
has a need for the requirement.

DECISION

Safety Storage, Inc. (SSI) protests the decision of the Defense Industrial
Supply Center (DISC) to cancel request for proposals (RFP) No.
SPO-500-98-R-0999 for mobile reuse centers (MRC) for ship and land-based
operations for the control and storage of hazardous materials.

We deny the protest.

The Defense Supply Center, Columbus, Ohio (DSC-OH), initially synopsized the
solicitation in the Commerce Business Daily (CBD) on September 3, 1997, as
an unrestricted procurement. Subsequently, in a November 5 CBD notice, the
agency announced that the solicitation was canceled and that a new
solicitation would be issued by DISC, Philadelphia, Pennsylvania (DISC-PA).
DISC-PA synopsized the procurement in the CBD on January 23, 1998, and
issued the RFP on April 17, on an unrestricted basis. The RFP contemplated
the award of an indefinite-quantity, indefinite-delivery requirements
contract for a 1-year base period with up to four

1-year option periods. RFP at 105.

On August 21, SSI filed a protest with our Office challenging the agency's
decision not to set aside the procurement for small businesses. We sustained
SSI's protest based on our conclusion that the contracting officer's (CO)
determination not to set aside the procurement was based on incomplete
information, unsupported assertions regarding the complexity of the required
MRCs, and insufficient efforts to ascertain small business capability to
perform the contract. Safety Storage, Inc., B-280851,

Oct. 29, 1998, 98-2 CPD para. 102. We recommended that the CO conduct a proper
market survey to adequately investigate the potential small business
capability and interest in the procurement and determine whether there was a
reasonable expectation that offers would be obtained from two responsible
small business concerns and that award could be made at a fair market price.
Id. at 5.

In response to our decision, the agency informed our Office that the CO was
conducting a market survey and coordinating his efforts with both DISC-PA's
small business office, and the Small Business Administration (SBA). Agency
Report, Tab 6, Letter from DISC-PA to GAO 1 (Nov. 20, 1998). The agency
subsequently advised our Office that its customer no longer required the
MRCs. Agency Report Tab 10, Letter from DISC-PA to GAO 1 (Feb. 19, 1999).
Accordingly, DISC-PA canceled the solicitation. Agency Report Tab 9, RFP No.
SPO-500-98-R-0999, amend. No. P00006, Feb. 18, 1999. This protest followed.

SSI argues that the agency's decision to cancel the RFP lacks a reasonable
basis and demonstrates bad faith. Specifically, SSI maintains that the
agency needs the MRCs since, prior to the cancellation, the agency devoted
considerable time and effort to revising the RFP's specifications to meet
its requirement. SSI further alleges that the delay of more than 3 months
before the agency decided to cancel the RFP following our decision
sustaining its protest demonstrates bad faith on the part of DISC-PA. In
this regard, SSI argues that the delay in canceling the RFP shows that the
agency was motivated by its desire to not issue the RFP as a small business
set-aside and to not award a contract to SSI.

In a negotiated procurement such as this one, the contracting activity has
broad authority to decide whether to cancel a solicitation and need only
establish a reasonable basis for the cancellation. Brackett Aircraft Radio
Co., B-246282, Jan. 8, 1992, 92-1 CPD para. 43 at 2. Cancellation is appropriate
when an agency determines that it no longer has a requirement for the items
solicited. The Potomack Partnership, B-252860, Aug. 3, 1993, 93-2 CPD para. 75
at 3. It is the responsibility of the contracting activity to determine its
requirements, and our Office will defer to the activity's judgment in that
regard. Research Analysis and Maintenance, Inc., B-236575, Dec. 12, 1989,
89-2 CPD para. 543. In addition, although we will consider a protester's
contention that an agency's actual motivation in canceling a solicitation is
to avoid awarding a contract or is in response to the filing of a protest,
see Griffin Servs. Inc., B-237268.2 et al., June 14, 1990, 90-1 CPD para. 558 at
3, recon. denied, B-237268.3 et al., Nov. 7, 1990, 90-2 CPD para. 369, if there
is a reasonable basis for the cancellation, notwithstanding some element of
personal animus, we will not object to the cancellation. Dr. Robert J.
Telepak, B-247681, June 29, 1992, 92-2 CPD para. 4 at 4.

Here, there is no basis to conclude that the agency unduly delayed
implementing our recommendation. The record shows that in accordance with
the recommendation in our prior decision sustaining SSI's protest, the CO
conducted a market survey to determine whether the procurement should be set
aside for small businesses. Agency Report, Contracting Officer's Statement,
April 1, 1999, para. III.3. The survey consisted of mailing certified letters to
firms that had not submitted offers in response to the RFP. Those letters
were mailed on November 20, 1998--within 4 weeks of our decision sustaining
SSI's protest--to all firms on the agency's mailing list which had responded
to any of the CBD announcements publicizing the requirement for the MRCs.
Id. The record further shows that after issuance of our decision, the CO
coordinated his efforts with the DISC Small Business Office, the SBA
procurement center representative, and the agency's Office of Counsel. Id.
The CO further states that from December 1998 until February 1999, he met
with various entities to discuss possible sources of supply and methods of
implementing our recommendation. Agency Report, Tab 5, Affidavit of Contract
Specialist at 1. Contrary to SSI's suggestions, therefore, the record shows
that within a reasonable amount of time following the issuance of our
decision sustaining SSI's protest, the agency initiated the necessary steps
to implement our recommendation. Based on this record, there is no basis to
conclude that the agency tried to avoid setting aside the solicitation or
otherwise unduly delayed implementing our recommendation.

Before the CO could determine whether the RFP should be set aside for small
businesses, however, on February 17, 1999, the Naval Supply Systems Command
(DISC's customer for the MRCs) informed DISC that it no longer had a need
for the MRCs. Accordingly, the agency canceled the RFP on February 18. The
fact that the cancellation occurred after our Office sustained SSI's initial
protest and after the agency spent time revising the specifications, does
not show that the cancellation was improper; an agency may properly cancel a
solicitation no matter when the information precipitating the cancellation
arises. See Admiral Towing and Barge Co., B-245600; B-245602, Jan. 16, 1992,
92-1 CPD para. 83 at 6. Since there is no dispute that the MRCs are in fact not
needed,[1] that alone provides a proper basis for cancellation. Pneumatrek,
Inc., B-225136, Feb. 24, 1987, 87-1 CPD para. 202.

While SSI surmises that the timing of the cancellation, coming after what
SSI perceives as a delay following the issuance of our decision sustaining
its protest, suggests bad faith on the part of contracting officials, there
is no evidence to support this claim. 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. Robertson Leasing Corp., B-275152,
Jan. 27, 1997, 97-1 CPD para. 49 at 4. We will not attribute unfair or
prejudicial motives to contracting officials on the basis of inference

or supposition. See GTE Gov't Svs. Corp., B-222587, Sept. 9, 1986, 86-2 CPD
para. 276

at 10. There is nothing in the record which even suggests that the
cancellation was intended to prevent SSI from receiving the award because of
its prior protest, or that the cancellation was intended to avoid issuing
the solicitation as a set-aside for small businesses.

The protest is denied.

Comptroller General

of the United States

Notes

1. To the extent that SSI alleges that the agency has a continuing need for
the MRCs and suspects that the agency is obtaining the MRCs on a sole-source
basis, SSI has provided no evidence in support of its allegation.