TITLE:	Chenega Management, LLC
BNUMBER:	   B-290598
DATE:		   August 8, 2002
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Chenega Management, LLC, B-290598, August 8, 2002

Decision


Matter of:   Chenega Management, LLC

File:            B-290598

Date:              August 8, 2002

Lewis R. Ivers for the protester.
Janis P. Rodriguez, Esq., Maritime Administration, for the agency.
Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Compelling reason existed to cancel invitation for bids (IFB) after bid
opening where IFB required performance of services that would be impossible
to perform within the required time period.

DECISION

Chenega Management, LLC protests the decision of the Maritime Administration
(MARAD) to cancel invitation for bids (IFB) DTMA1B01009, for layberthing
services in the U.S. Pacific Northwest region.  Chenega asserts that it met
the IFB requirements and that the cancellation resulted from agency bad
faith.

We deny the protest.

MARAD maintains and operates the ready reserve force (RRF), a U.S.
government- owned fleet of commercially designed ships of various
configurations and capabilities that must respond, with 4, 5, 10, or 20
days' notice, to national emergency sealift requirements, particularly the
movement of military unit equipment.  The berthing of inactive RRF ships may
be either at an outported layberth or a reserve fleet anchorage site.
"Outporting" is the berthing of RRF ships at or near initial loadout or
industrial activation sites.  The IFB was issued to obtain outported
layberthing services for two roll-on/roll-off vessels, the Cape Intrepid and
the Cape Island, on the coast of the Pacific Northwest.

Chenega, a small disadvantaged business, was the apparent low bidder, but
during the preaward survey the agency found Chenega incapable of performing
two support service requirements.  Specifically, the IFB identified five
services that "must be available within a four hour notice."  IFB ï¿½ C.4(C).
MARAD found that Chenega could not timely provide the following two
services:  "[t]here shall be commercial bunkering [refueling] services for
the vessel(s)"; and "[t]here shall be 24 hour tug services, with adequate
number of tugs of sufficient horsepower to safely dock/undock the vessel(s)
simultaneously, and move the ships to a safe anchorage, or another berth,
including maneuvering the ships within navigable turning basin and shipping
channels."  The contracting officer determined Chenega to be nonresponsible,
rejected its bid, and referred the matter to the Small Business
Administration (SBA) for a certificate of competency (COC) review.  Based on
discussions between SBA and MARAD, the two agencies concluded that the first
of the specifications in question was impossible to perform, and that the
second was ambiguous.  MARAD thus canceled the solicitation with the
intention of revising the specifications and resoliciting the requirement.
This protest followed.

Chenega asserts that the agency's decision to cancel the solicitation was
unreasonable because its bid "clearly addressed and met the stated intent of
the Agency, notwithstanding the lack of specificity in the [solicitation]."
 Comments at 1.  Specifically, Chenega observes that its bid was based on an
acceptable method of timely fueling the vessels and providing the necessary
tug service, in accordance with the terms of the IFB.

A contracting agency must have a compelling reason to cancel an IFB after
bid opening because of the potential adverse impact on the competitive
bidding system of resolicitation after bid prices have been exposed.
Federal Acquisition Regulation (FAR) ï¿½ 14.404-1(a)(1); HDL Research Lab,
Inc., B-254863.3, May 9, 1994, 94-1 CPD ï¿½ 298 at 5.  Where a solicitation
contains inadequate or ambiguous specifications, or otherwise does not
contain specifications that reflect the agency's actual needs, the agency
has sufficient reason to cancel.  FAR ï¿½ 14.404-1(c)(1); Days Inn Marina,
B?254913, Jan. 18, 1994, 94-1 CPD ï¿½ 23 at 2.  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.  American Consulting Servs., Inc., B?276149.2, B?276537.2, July
31, 1997, 97-2 CPD ï¿½ 37 at 4.

MARAD had a compelling reason to cancel the IFB.  With regard to the
requirement for commercial bunkering service, the IFB simply stated that it
must be "available within a four hour notice."[1]  The agency explains that
it intended the 4-hour notice requirement to mean the maximum transit time
between the fuel facility and the layberth, by tug and bunker barge.[2]
 Agency Report (AR) at 4.  It was because the nearest fuel facility to
Chenega's layberth was more than 4 hours away by barge that MARAD initially
found Chenega nonresponsible.  Thereafter, MARAD realized--as confirmed by
Chenega's fuel supplier--that it takes more than 4 hours just to load a
barge with enough fuel to bunker the vessels, let alone to actually
transport the fuel to the ships.  Consequently, MARAD (and SBA) concluded
that the specification as written was impossible for any bidder to perform,
and warranted cancellation.  COS at 7.  We find no basis to question MARAD's
explanation and resulting determination to cancel the IFB.

Chenega's claim that it is indeed possible to meet the agency's needs under
the IFB as written, and that there thus is no basis for canceling the IFB,
is unpersuasive.  Chenega asserts that the agency's actual requirement can
be met through a combination of barge and truck bunkering in less than 24
hours; based on its understanding that 4 days typically are allotted for
bunkering, crewing, and otherwise making the ships ready for sailing, it
believes this would meet the agency's needs.  Comments at 2.  However, even
if Chenega is correct as to the agency's actual needs (in fact, nothing in
the record indicates that a 24-hour refueling time meets the agency's
needs), the IFB still would be defective because it required only that
fueling services be available within "a four hour notice," with no mention
of a requirement that fueling be completed within 24 hours.  Moreover,
Chenega's approach of beginning the fueling process using trucks would be
inconsistent with the agency's intent that refueling be performed solely by
barge.  Even though, as asserted by Chenega, some marine vessels apparently
are fueled by truck, the agency reports, and Chenega does not dispute, that
it is not industry practice to fuel vessels such as the two here by truck,
since they require large quantities of heavy fuel oil.  Supplemental Agency
Comments at 2, n.4.  We note in this regard that, while Chenega asserts that
combination truck/barge bunkering would meet the agency's needs, its COC
application referred to the use of trucks only "upon request," and further
stated that "[i]t should be clearly understood that the commercial bunkering
service to be utilized by Chenega will deliver fuel oil to the RRF vessels
by barge."  COC Letter, Mar. 25, 2002, at 2, n.1.

We conclude that MARAD reasonably determined that the bunkering requirement
could not be met as it intended--by barge, within a 4-hour transit time to
the layberth-and, therefore, that the agency had a compelling reason to
cancel the IFB.  See Champion Structure Co., B?198863, Oct. 17, 1980, 80-2
CPD ï¿½ 291 at 2 (cancellation proper where award would result in a contract
impossible to perform).[3]

Chenega asserts that MARAD's decision to cancel the IFB was motivated by bad
faith, as evidenced by a number of actions by agency personnel.  For
example, Chenega alleges that the agency improperly shared the protester's
proprietary information with its competitors, caused it unnecessary expense
in responding to the preaward survey (when MARAD never intended to award it
the contract), and allowed a biased employee to influence the responsibility
determination.

We will not attribute bias to an agency on the basis of inference and
supposition, Five-R Co., B-288190, Sept. 10, 2001, 2001 CPD ï¿½ 163 at 4;
without strong evidence to support such a conclusion, we will not find that
agency employees acted in bad faith.  Communication Techs., Inc., B-283491,
B-283491.2, Nov. 30, 1999, 99-2 CPD ï¿½ 104 at 7.  Here, the record contains
no evidence--beyond the protester's speculation--of bias or bad faith.
Specifically, there is no basis to conclude that the agency's decision to
cancel the IFB resulted from anything but the agency's good faith judgment
that the solicitation contained deficient specifications.

More specifically, as to the alleged sharing of information with
competitors, Chenega points to two alleged releases concerning its mooring
plans:  one to a consultant associated with the incumbent layberth
contractor, and one to the contractor responsible for managing the ships.
With regard to the consultant, there was no improper disclosure; the
consultant stated that the information he obtained on Chenega was from the
public bid opening.  Protest exh. D.  In addition, although the contracting
preaward surveyor received written input from the consultant when
investigating Chenega's responsibility, the contracting officer reviewed the
material and informed the preaward surveyor of the consultant's ownership
interest in the incumbent.  COS at 5.  With regard to the second release,
the agency admits that a contracting officer's technical representative
(COTR) shared information about Chenega's mooring plans with the ship
manager contractor.  The agency acknowledges that the protester's
information should not have been shared with this contractor, but notes that
Chenega did not mark the information as proprietary, that the ship manager
is not a competitor for the layberth contract, and that, in view of the ship
manager's responsibility for safe mooring of the vessels and its contractual
entitlement to a mooring analysis, it was reasonable for the COTR to consult
with that contractor. [4]  We find the agency's explanation credible, and
conclude that these disclosures do not establish that the cancellation was
motivated by agency bad faith.

The protest is denied.

Anthony H. Gamboa
General Counsel

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

[1] According to MARAD, the 4-hour notice requirement was the latest version
of the services requirement that had been included in prior solicitations.
Earlier solicitations had required that offered layberthing be in locations
where services (e.g., repairs, refueling) would be available within a radius
of 10 nautical miles.  Contracting Officer's Statement (COS) at 3.  However,
this resulted in some firms bidding locations that nominally had the
services within the prescribed radius, but that for other reasons would not
have the services available when needed by MARAD; for example, a ship repair
company within the specified radius might not maintain the workforce
necessary for MARAD's repairs.  Consequently, over a period of years, MARAD
refined this "services proximity" requirement, successively calling for
availability within an 8?hour transit time, within 8 hours of notice to
activate and, since 1995, within a 4?hour notice.
[2] According to the agency, "'commercial' bunkering in the industry means
fueling the vessel by barge [which is] . . . the accepted manner of fueling
large vessels."  COS at 6.
[3] We reach the same conclusion with regard to the tug requirement.  While
the IFB specified "an adequate number of tugs of sufficient horsepower" to
accomplish the simultaneous movement of both ships, the IFB did not specify
a minimum horsepower or the number of tugs, leaving open the question of
what a contractor must be able to provide.  While the protester asserts that
its proposed arrangements with various tug companies meet the more specific
requirements the agency identified during the preaward survey, the agency
maintains that the protester's solution will not meet its needs.  Even to
the extent Chenega meets the agency's minimum needs, other prospective
bidders are entitled to know the agency's requirements and to submit
responsive bids based on them.  Accordingly, the lack of specificity in this
specification also provides a compelling basis for canceling the IFB.  Neals
Janitorial Serv., B-276625, July 3, 1997, 97-2 CPD ï¿½ 6 at 5.
[4] Further, because the agency ultimately approved Chenega's mooring plans,
the protester was not prejudiced by the release of the information.