TITLE:  Daston Corporation, B-292583; B-292583.2, October 20, 2003
BNUMBER:  B-292583; B-292583.2
DATE:  October 20, 2003
**********************************************************************
Daston Corporation, B-292583; B-292583.2, October 20, 2003

   Decision
    
    
Matter of:   Daston Corporation
    
File:            B-292583; B-292583.2
    
Date:           October 20, 2003
    
Richard J. Webber, Esq., and Frederick D. McKalip, Esq., Arent Fox Kintner
Plotkin & Kahn, for the protester.
Cyrus E. Phillips, IV, Esq., for Catapult Technology, Ltd., an intervenor.
Sherri L. Pappas, Esq., and Terence W. Carlson, Esq., Department of
Transportation, for the agency.
Katherine I. Riback, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
Agency had a reasonable basis to cancel solicitation for information
technology support services for one agency division, where the record
shows that the agency no longer had a need for these services due to an
agency-wide plan to consolidate information technology services.
DECISION
    
Daston Corporation protests the cancellation of request for proposals
(RFP) No. DTRS56-03-R-0006 by the Department of Transportation (DOT) for
information technology (IT) support services. Daston maintains that the
decision to cancel the solicitation lacks a reasonable basis. Daston also
contends that the agency*s modification of an existing contract with
Catapult Technology, Ltd., for operational maintenance services, to add
this work was outside the scope of that contract.
    

   We deny the protest.
    
The RFP was issued on May 16, 2003 by the Research and Special Programs
Administration (RSPA), 1 of the 11 divisions of DOT.  The RSPA operates
the Hazardous Materials Information System (HMIS), the primary source of
national data for the federal, state, and local government agencies
responsible for the safety of hazardous materials transportation.  RSPA
issued the solicitation to four Small Business Administration (SBA)
certified 8(a) businesses with General Services Administration Federal
Supply Schedule contracts.  The RFP requested proposals for a base year
commencing July 1 with two 1-year options for services that had previously
been provided by two different contractors:  (1) system development and
integration, database design and management, data analysis and entry, and
dissemination of the HMIS database, which provides data and database
administration, statistical analysis, and standard and specialized reports
concerning hazardous materials spills and on regulatory matters; and (2)
systems and operational support of the RSPA local area network, wide area
network, website development, and web infrastructures, and help desk
services. 
    
The agency received three proposals in response to the RFP by the May 27
proposal due date, including Daston*s and Catapult*s. 
    
Meanwhile, on May 28, DOT*s Chief Information Officer (CIO) informed the
CIOs of the DOT divisions, including RSPA*s CIO, of a proposal that the IT
infrastructures of the various divisions be consolidated into the CIO*s
office by September 30, 2005. 
    
The agency conducted an oral presentation and question and answer sessions
with each of the three vendors on May 29, and, on June 3, the agency began
evaluating the proposals.  Clarifications were requested on June 4 and
received on June 5. 
    
Meanwhile, on June 5, the RSPA*s CIO received the timeline for DOT*s
consolidation of IT infrastructures; this timeline indicated that
consolidation was to commence by March 2004, with the consolidation of all
DOT IT operations to be completed by September 30, 2005.  RSPA*s CIO held
a meeting with other RSPA officials on June 6 to discuss this
consolidation plan.  It was at this meeting that the contracting officer
first learned of DOT*s consolidation plan and timetable. 
    
As a result of that meeting, the contracting officer on that same day
instructed that the evaluation of the proposals be suspended pending a
decision on whether the agency would continue with this procurement or
cancel the solicitation.  Since the timetable established by the CIO
indicated that consolidation was to commence in March 2004, 4 months
before the base year term was to expire, the agency determined that it
would be necessary to terminate any award it might make under this RFP to
meet the agency*s requirements.  To avoid this scenario, the agency
cancelled the solicitation on June 10.
    
On June 13, the RSPA entered into a *customer agreement* with, and
transferred funds to, the Office of the Secretary of Transportation for
that office to provide RSPA with these solicited IT services.  DOT has
various Specialized Technical and User Support (STATUS) multiple award,
indefinite-delivery/indefinite-quantity contracts for five specialized
technical/technology user support areas: geographic/geospatial information
systems, artificial intelligence, wireless technologies/network,
e-learning and learning management systems, and operational maintenance
support.  The record shows that Catapult had received an award under the
STATUS solicitation for operational maintenance support, and had received
a task order implementing this award.  The Office of the Secretary
modified this Catapult task order to add the services included in the
canceled RSPA RFP through March 15, 2004.
    
The protester filed an agency-level protest on June 20, and on July 11,
this protest to our Office was filed.
    
Daston first protests that the agency unreasonably cancelled the
solicitation.
An agency need only advance a reasonable basis to cancel a request for
proposals.  See Eastman Kodak Co., B-271009, May 8, 1996, 96-1 CPD P: 215
at 2, recon. denied, B-271009.2, Oct. 7, 1996, 96-2 CPD P: 136. 
Cancellation is proper where award under the solicitation would not meet
the government*s actual needs, and the agency properly may cancel a
solicitation no matter when the information precipitating the cancellation
first surfaces or should have been known, even if the cancellation occurs
after proposals have been submitted.  See Encore Mgmt., Inc.,
B‑278903.2, Feb. 12, 1999, at 3.  
    
According to DOT, the 11 DOT operating divisions, including RSPA, operate
individual IT infrastructures that are *functionally similar, but
non-standard.*  These various IT infrastructures make overall management
of IT, and as well as sharing information between divisions, difficult to
accomplish.  Also, it is impossible to apply consistent security measures
to the various IT infrastructures, which leaves the entire department
vulnerable to cyber attack.  Additionally, the various IT infrastructures
are more expensive to operate, due to redundancies, than one IT
infrastructure.  Beginning in October 2005, the agency plans on moving
into a new headquarters building that will contain all of the operating
divisions of DOT, except one, and to facilitate this move the IT services
need to be consolidated before the move.  Agency Supplemental Report at
2.  The agency reports that it cancelled the RSPA RFP in order to support
the agency*s IT consolidation initiative by immediately transitioning
these services to the Office of the Secretary.  Since the timetable
established by the CIO indicated that consolidation is to commence in
March 2004, before the base year contract expires, RSPA asserted that it
would be necessary to terminate any contract awarded under this RFP to
meet the agency*s requirements as established by the timetable.[1]   
    
The agency*s explanation provides a reasonable basis for the agency*s
decision to cancel the solicitation.  The DOT*s CIO has directed that
these requirements of RSPA for specific IT support services be transferred
to the DOT*s CIO departmental infrastructure.  We recognize the benefits
of consolidating a redundant system and that they may provide a reasonable
basis for canceling a solicitation.  See LDDS WorldCom, B-266257,
B-266258, Feb. 8, 1996, 96‑1 CPD P: 50 at 3.  Moreover, since the
record indicates that this consolidation will not allow completion of even
the base year solicited by this RFP, it is apparent that the agency*s
needs have changed from those solicited.  Cancellation of the solicitation
is proper where the agency determines that the solicitation does not
accurately describe its needs such that the award will not fulfill the
agency*s actual requirements.  See Nomura Enter. Inc.,
B-251889.2, May 6, 1993, 93-1 CPD P: 490 at 4.
    
Daston also contends that the solicited work is not within the scope of
Catapult*s STATUS contract.  We disagree.  Catapult*s STATUS contract for
operational maintenance support services--that is, *support for
implemented and/or deployed systems and solutions*--has a very broad scope
of work that encompasses a *spectrum of specialized technical areas and
their operational maintenance support.*  Catapult STATUS Contract S:S:
C.3.8, C.4.  Under Catapult*s contract, it is to *provide a full range* of
services and be capable of providing *evaluation, planning, development,
delivery and integration of systems, solutions, technical support, ongoing
operations support and maintenance for those core capabilities.*  Catapult
STATUS Contract.  S: C.4.1.  Among the examples of the work contemplated
by this contract include data network designs and installation, database,
data mining, data storage and retrieval, systems monitoring and reporting
support, and administrative systems support.  Id.  We think that work
encompassed by this RFP, which includes system development and
integration, database design and management, data analysis and entry and
systems and operation support of the RFPA local area network, and wide
area network, falls fairly under the broad scope of Catapult*s STATUS
contract.  While Catapult points out that the work covered by the
cancelled RFP requires a specialized knowledge of hazardous materials and
applicable law and regulations, the STATUS contract recognized that it
encompassed a *spectrum of specialized technical areas.*  Based on our
review, we cannot say that the type of work included in the cancelled RFP
is outside the scope of this contract. 
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel 
    

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

   [1] While Daston expresses disbelief that the consolidation will occur
within the timeframe established by the agency, and speculates that
Catapult*s contract effort will extend beyond March 2004, it has provided
no evidence to show that the agency*s plans are unrealistic.