TITLE:  Sunshine Kids Service Supply Company, B-292141, June 2, 2003
BNUMBER:  B-292141
DATE:  June 2, 2003
**********************************************************************
Sunshine Kids Service Supply Company, B-292141, June 2, 2003

   Decision
    
    
Matter of:   Sunshine Kids Service Supply Company
    
File:            B-292141
    
Date:              June 2, 2003
    
Justin Sulzner for the protester.
Janet N. Repka, Esq., Washington Headquarters Services, Department of
Defense, and Kevin R. Harber, Esq., Small Business Administration, for the
agencies.
Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
Where agency rejected proposal submitted by sole HUBZone offeror in
HUBZone set-aside based on finding of unreasonable price, and subsequently
determined that proposal also was technically unacceptable, agency
decision to cancel solicitation was unobjectionable, even if original
basis for rejection--unreasonable price--was not supported by the record. 
DECISION
    
Sunshine Kids Service Supply Company (SKSS) protests the agency's decision
to cancel request for proposals (RFP) No. MDA946-03-R-0014, a HUBZone
(historically underutilized business zone) small business set-aside issued
by the Department of Defense for custodial services.  SKSS asserts that
the cancellation was improper, and that the agency instead should have
made award to SKSS.
    
We deny the protest.
    
The RFP sought proposals to provide all services, supplies, equipment, and
supervision necessary to perform interior and exterior custodial work in
the Hybla Valley Federal Building in Alexandria, Virginia.  The RFP
contemplated award of a fixed-price contract for a 6-month base period,
with 4 option years, to the offeror whose proposal was considered the
*best value.*  Proposals were to be evaluated under three
factors--performance, management approach, and price--with the two
technical factors of equal importance and, combined, of significantly more
importance than price.  Price was to be evaluated for reasonableness and
realism, as a reflection of offerors' understanding of the RFP's
requirements.  The RFP advised that the agency intended to make award
without conducting discussions, and warned that initial proposals
therefore should contain the offeror's best terms from a price and
technical standpoint. 
    
Three offerors, including SKSS, submitted proposals.  The agency rejected
two of the proposals because the offerors were not HUBZone small
businesses, and rejected SKSS's proposal after determining that its price
was unreasonably high.  Because no acceptable HUBZone proposals remained,
the agency canceled the RFP, planning to reissue it as a total small
business set-aside.  Upon learning of its proposal's rejection and the
agency's intent to cancel the RFP, SKSS filed an agency-level protest.  In
the course of preparing its response to that protest, the agency evaluated
SKSS's technical proposal, and concluded that it was technically
unacceptable.  Before the agency issued a formal response to the protest,
SKSS filed this protest with our Office challenging the agency's
conclusion that its proposed price was unreasonably high. 
    
In a negotiated acquisition, agencies have broad discretion in deciding
whether to cancel a solicitation; they need only advance a reasonable
basis for the cancellation.  Encore Mgmt., Inc., B-278903.2, Feb. 12,
1999, 99-1 CPD P: 33 at 3.  Cancellation of a HUBZone set-aside
solicitation is reasonable where no acceptable offers are received from
HUBZone small business concerns, since the set-aside must be withdrawn
under those circumstances and the requirement set aside for small business
concerns.  Federal Acquisition Regulation (FAR) S: 19.1305(d); see Fluid
Power Int'l, Inc., B-278479, Dec. 10, 1997, 97-2 CPD P: 162 at 2-3
(cancellation of a small business set-aside solicitation was reasonable
where no acceptable small business quotations were received).
As noted, the agency initially canceled the RFP after concluding that
SKSS's price was unreasonable, and that there thus were no acceptable
HUBZone offers.  The contracting officer's conclusion was based in
significant part on a comparison of SKSS's price with the agency's
estimate--SKSS's price exceeded the estimate by 8.2 percent.  The
protester asserts that such a small percentage does not support a finding
of price unreasonableness.  We are inclined to agree with the protester,
since the agency has not provided an explanation as to why this arguably
modest price difference was significant enough to render SKSS's price
unreasonable.[1]  However, the validity of the price reasonableness
determination is not dispositive in this case, and we thus need not
address it, since the record supports the agency's conclusion--reached
during its consideration of the agency-level protest--that SKSS's proposal
was technically unacceptable.  In this regard, a contracting agency's
initial reliance on an improper reason for canceling a solicitation is not
significant if the record establishes that another proper basis for the
cancellation exists.  Peterson-Nunez Joint Venture, B‑258788, Feb.
13, 1995, 95-1 CPD P: 73 at 5; SEI Info. Tech.--Recon. B‑219668.2,
Apr. 23, 1986, 86-1 CPD P: 393 at 3.  An agency properly may cancel a
solicitation no matter when the information supporting the cancellation
first surfaces or should have been known.  Pike Creek Computer Co., Inc.,
B‑290329, June 21, 2002, 2002 CPD P: 106 at 2.
    
The RFP included a 14-page work statement and laid out detailed
requirements for information to be evaluated under the technical
evaluation factors.  RFP S:S: C, L.6.  Based on the RFP's requirements,
the evaluators identified numerous weaknesses in SKSS's proposal.  For
example, under the past performance factor, offerors were to submit
contract summaries of relevant contracts, explaining their similarity in
complexity and scope to the RFP's work statement, as well as including
descriptions of experience, such as cleaning exterior parking lot areas
and using environmentally preferable products.  RFP S: L.6.1.b.  The
evaluators found that SKSS's proposal did not provide sufficient
information to demonstrate the relevance of SKSS's listed contracts. 
Agency Report, Tab 12.  In fact, while SKSS's proposal listed five
contracts as references, it did not include any summaries showing contract
comparability, or any descriptions of experience in cleaning parking lots
or using environmentally preferable products. 
    
Similarly, with regard to the management approach factor, proposals were
to include descriptions of offerors' approaches to quality control,
staffing, work accomplishment, and environmental stewardship.  RFP
S: L.6.2.  Notwithstanding the requirement for detailed information,
SKSS's proposal included only a brief, 3‑page response summarily
addressing the requirements.  For example, under the program management
section, which was to include an organization chart, resumes, and plans
for training, safeguarding of government property, and environmental
compliance, SKSS's proposal only provided the following: 
    
The specifications of this contract are not unlike any others that [SKSS
is] currently staffing now, most are required to fill out FD-258 Forms and
those fingerprints are then sent to the DOJ in Washington D.C. for
clearance.  Quality help is readily available in such an economic
environment.
SKSS Proposal at 3.  The evaluators found that the proposal failed to
describe SKSS's approach to providing quality control, improvement
process, and various required plans, and concluded that the information
SKSS provided was inadequate to demonstrate a management approach that
would meet the contract's requirements. 
    
In reviewing an agency's evaluation, we will not reevaluate a proposal
but, instead, will examine the evaluation to ensure that it was reasonable
and consistent with the
solicitation and applicable statutes and regulations.  Kay & Assocs.,
Inc., B-291269, Dec. 11, 2002, 2003 CPD P: 12 at 4. 
    
SKSS has not shown either that the RFP did not require the information the
agency asserts was required, or that its proposal in fact included the
information the agency found was missing.  Rather, SKSS's challenge to the
determination that its proposal was unacceptable is limited to general
assertions that *other facilities find [its] work acceptable* and that it
*somehow manage[s] to do business in three other states.* Comments at 1. 
However, these assertions constitute mere disagreement with the agency's
judgments, and therefore are insufficient to establish that the evaluation
was unreasonable.  UNICCO Gov't Servs., Inc., B‑277658, Nov. 7,
1997, 97‑2 CPD P: 134 at 7.  We conclude that the agency reasonably
found that SKSS's proposal did not include the information clearly
required by the RFP, and therefore reasonably concluded that SKSS's
proposal was technically unacceptable. 
    
Since SKSS was the only HUBZone business that responded to the RFP, and
the agency properly found its proposal technically unacceptable, there is
no basis to object to the agency's decision to cancel the RFP and reissue
it as a small business set-aside. 
    
The protest is denied. 
    
Anthony H. Gamboa
General Counsel
    
    

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

   [1] In response to our request for its views on the protest, the Small
Business Administration (SBA) takes the position that the less than
9 percent difference between SKSS's and the compared prices does not
support the conclusion that SKSS's price was unreasonably high.  SBA
Report at 4.