TITLE:	IT Corporation
BNUMBER:	   B-289517.3
DATE:		   July 10, 2002
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IT Corporation, B-289517.3, July 10, 2002

Decision


Matter of:   IT Corporation

File:            B-289517.3

Date:           July 10, 2002

Richard L. Moorhouse, Esq., and Dorn C. McGrath III, Esq., ReedSmith, for
the protester.
Clare A. Kersten, Esq., and Robert E. Little, Jr., Esq., Department of the
Navy, for the agency.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency's decision to cancel a solicitation used to obtain and evaluate
private-sector proposals in conducting a Circular A-76 cost comparison,
after submission of proposals and announcement of intent to award a contract
under the solicitation to the protester based on the cost comparison
results, is reasonable where the solicitation did not address material
requirements; inadequate information was provided to the private-sector
offerors, which did not fairly allow them to prepare their proposals; and at
least one private-sector firm did not submit a proposal because of the
inadequacy of the information in the solicitation.

DECISION

IT Corporation protests the decision by the Department of the Navy, Naval
Facilities Engineering Command, to cancel request for proposals (RFP) No.
N68711-99-R-6670, which sought proposals to provide base operation support
services at Marine Corps Base Camp Pendleton, California.  Alternatively,
the protester requests reimbursement of its proposal preparation costs.

We deny the protest and claim for costs.

The Navy issued the RFP on October 12, 2000 in conjunction with commercial
activities studies pursuant to Office of Management and Budget (OMB)
Circular A?76.  The RFP contemplated the award of a
fixed-price/indefinite-quantity contract for a base period of 1 year with 4
option years and 2 award-term years.  The RFP allowed for use of a
cost/technical tradeoff to select the private-sector proposal to be compared
with the in-house plan.

Prior to submitting proposals, private-sector offerors submitted statements
of qualification (SOQ) to perform the contract requirements.  Four firms
submitted SOQs, and the agency determined that all four were viable
competitors.  Subsequently, two firms withdrew from the competition.  The
two remaining firms, IT and Del-Jen, Inc., submitted proposals.  The agency
evaluated IT's proposal as representing the best value private-sector
proposal, compared it against the government's in?house management plan for
a most efficient organization (MEO), and determined that IT's proposal
represented a significant savings over the MEO.  IT's proposed price was
$124 million, which was about 40 percent lower than Del-Jen's price and
nearly 50 percent lower than the cost of the MEO.  On November 28, 2001, the
agency announced its decision to award a contract to IT under the RFP.

On December 10, Del-Jen protested the agency's evaluation of the
private-sector proposals to our Office.  Essentially, Del-Jen alleged that,
as evidenced by the extremely low price of IT's proposal, the agency's
technical and price evaluations were inadequate and unreasonable.  In
response to Del-Jen's protest, the agency proposed corrective action that
included a review of the evaluations, as well as a review of the adequacy of
the performance work statement (PWS) included in the RFP.  Agency Report,
Tab 6, Recommendation for Corrective Action.  The agency's corrective action
contemplated the possibility of amending or canceling the RFP, should the
review show that the PWS was inadequate.  Id. at 2.  Our Office dismissed
Del-Jen's protest as academic following notice of the agency's corrective
action.

The agency undertook extensive reviews of the PWS and other information that
was available to offerors.  Separate reviews were conducted by the technical
evaluation board and by an independent staff member within the agency.
Following these reviews, the agency determined that the information
available to offerors did not adequately identify all of the work required
to meet the agency's basic needs.  The historical workload information
disclosed to the offerors was found to be incomplete and misleading, and no
definitions or parameters were identified for crucial work and elements of
the contract.  The workload data in the agency's MAXIMO computerized
database that was available to offerors lacked details that were available
to the MEO team, such as the length of service calls, the location of work,
and the mix of trades used to perform the work.  As a result of the
foregoing, offerors had to make substantial assumptions about the work in
order to prepare their proposals, which resulted in their being based on
significantly different assumptions, and thus substantially different
proposed staffing levels, which in turn were different from those
assumptions on which the MEO was based.[1]  Furthermore, the agency
determined that competition under the RFP was unintentionally limited by the
inadequacy of the PWS and other information available to the offerors; in
fact, one of the offerors withdrew from the competition because of a lack of
information available upon which it could prepare a proposal.  Agency
Report, Tab 11, Source Selection Board (SSB) Report to the Source Selection
Authority (SSA), at 8-9; see Agency Report, Tab 16, Letter from Offeror
(requesting additional information during proposal preparation).  Based on
the foregoing, the agency determined that the RFP was deficient, which
caused an unfair competition among the offerors and between the public and
private sectors, as well as precluding other potential offerors from
submitting proposals.  Agency Report, Tab 11, Source Selection Board (SSB)
Report to the Source Selection Authority, at 9.  On April 9, 2002, the
agency canceled the RFP.

IT protested the agency's decision to cancel the RFP, essentially alleging
that the action was unjustified, because the informational deficiencies were
assertedly superficial, such that merely amending the RFP and obtaining a
revised proposal from IT would have been all that was required, and because,
notwithstanding the lack of information, IT was able to prepare the winning
proposal based on the RFP and should thus receive award.  Alternatively, the
protester alleges that the agency should have known before submission of
proposals that the RFP was deficient, in part because IT had submitted
Freedom of Information Act (FOIA) requests prior to submitting its proposal,
in which it requested significant information relevant to proposal
preparation that was lacking from the RFP.  Since the agency did not take
that opportunity to provide adequate information in the RFP, the protester
contends that IT is entitled to proposal preparation costs.

In a negotiated procurement, an agency has broad authority to decide whether
to cancel a solicitation; there need be only a reasonable basis for the
cancellation.  This authority extends to the cancellation of solicitations
used to conduct A-76 cost comparisons.  So long as a reasonable basis exists
to exercise this authority, an agency may cancel a solicitation regardless
of when the information precipitating the cancellation first surfaces.  Rice
Servs., Ltd., B-284997.5, Mar. 12, 2002, 2002 CPD ï¿½ 59 at 4; Lackland 21st
Century Servs. Consol., B-285938.7, B-285938.8, Dec. 4, 2001, 2001 CPD ï¿½ 197
at 5.  In terms of whether the RFP could or should have simply been amended,
if an amendment of a solicitation is so substantial that additional sources
likely would have submitted offers had the substance of the amendment been
known to them, the contracting officer is required to cancel the original
solicitation and issue a new one, regardless of the stage of the
acquisition.  Federal Acquisition Regulation (FAR) ï¿½ 15.206(e); see The New
Jersey and H Street Ltd. Partnership, B?288026, B-288026.2, July 17, 2001,
2001 CPD ï¿½ 125 at 3-4.

Here, the record establishes that the RFP does not address significant
agency requirements.  For example, the RFP does not address the service
provider's responsibility for computer hardware and MAXIMO system upgrades,
which are expensive items that were not included in the costs of the
eventual contractor or MEO.  Agency Report, Tab 11, Source Selection Board
(SSB) Report to the Source Selection Authority, at 8.  This is not
substantively disputed by the protester.  Where, as here, a solicitation
does not reflect an agency's actual material requirements, the agency's
decision to cancel and resolicit is proper.  Freedom Graphic Sys., Inc.,
B?277305, Sept. 22, 1997, 97-2 CPD ï¿½ 82 at 2; Program Resources, Inc.,
B-215201, Sept. 25, 1984, 84-2 CPD ï¿½ 356 at 3.

The inadequacy of the workload data and other work parameters provided in
the RFP also provides a reasonable basis to cancel the RFP.  Not only does
the protester's rejection of this determination not rise above mere
disagreement with the agency, which is insufficient to render the agency's
determination unreasonable, see Williams College, B-259351, Mar. 23, 1995,
95-1 CPD ï¿½ 162 at 3, the protester's actions and statements in fact support
the agency's determination.  That is, in making its FOIA requests, IT
vigorously sought additional information from the agency on the basis that
such information was needed to prepare a competitive proposal and to be on a
"level playing field" with the MEO.  Protest, exh. B, IT's FOIA Requests;
Agency Report, Tab 4, IT's FOIA Appeal.  The information requested included
the same missing information that the agency now states should have been
provided to the offerors.  Moreover, the protester acknowledges that the MEO
had better information than private-sector offerors, which the agency
asserts did not allow for a fair competition.[2]  Protester's Comments at
11-12.

The record also clearly shows that another offeror withdrew because it
requested from the agency, but did not receive, information similar to what
the protester had sought and been denied.  Although the protester contends
that this offeror should have done more at the time to obtain the
information, that argument misses the point.  The record shows that, had the
agency issued the RFP with the additional information as the agency now
intends to do, at least one additional offeror likely would have submitted a
proposal.  In such circumstances, FAR ï¿½ 15.206(e) requires the agency to
cancel the solicitation and resolicit.

The protester alternatively requests reimbursement of its proposal
preparation costs.  It alleges that the agency reasonably should have
realized the defective nature of the RFP as a result of the protester's
pre-proposal FOIA requests, and that the protester incurred significant
costs of preparing its proposal, which has been rendered valueless by the
cancellation of the RFP.  We agree that it would have been preferable for
the Navy to have corrected the deficiencies in the RFP far earlier in the
process.  However, our Office may recommend reimbursement of a protester's
proposal preparation costs only where, in sustaining a protest, we determine
that a solicitation, proposed award, or award does not comply with statute
or regulations.  4 C.F.R. ï¿½ 21.8(d) (2002); EAI Corp., B?252748, July 26,
1993, 93-2 CPD ï¿½ 56 at 2.  Here, since we deny this protest and find that
the agency's action is reasonable and consistent with regulation, it would
not be appropriate for us to recommend reimbursement of costs to the
protester.

The protest and claim for costs are denied.

Anthony H. Gamboa
General Counsel


                          -------------------------

[1] The RFP alluded to work not specifically identified, which was the basis
for Del-Jen to make assumptions about the magnitude of such work in
preparing its proposal.  On the other hand, IT made narrower assumptions in
preparing its proposal, addressing only work specifically identified in the
RFP.  The technical evaluation board determined that IT's proposal appeared
to comply with the terms of the RFP as written.
[2] The protester's solution is to simply allow IT a chance to revise its
proposal with the new information, instead of canceling the RFP.  This is
hardly fair to the other offerors who may have submitted different proposals
or potential offerors who did not propose because of the inadequacy of the
information in the RFP.