TITLE:  Quality Technology, Inc., B-292883.2, January 21, 2004
BNUMBER:  B-292883.2
DATE:  January 21, 2004
**********************************************************************
Quality Technology, Inc., B-292883.2, January 21, 2004

   DOCUMENT FOR PUBLIC RELEASE                                                
The decision issued on the date below was subject to a GAO Protective      
Order.  This redacted version has been approved for public release.        

   Decision
    
Matter of:   Quality Technology, Inc.
    
File:            B-292883.2
    
Date:              January 21, 2004
    
William M. Rosen, Esq., William M. Rosen Law Office, and Charlotte
Rothenberg Rosen, Esq., Dickstein, Shapiro, Morin & Oshinsky, for the
protester.
Richard E. Hurst, Esq., Department of Justice, Bureau of Alcohol, Tobacco,
Firearms and Explosives, for the agency.
Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Cancellation of request for quotations was reasonable where quotations
received were substantially higher than agency*s available funding for
requirement, and where agency decided to reassess its needs prior to
resolicitation in light of canceled solicitation*s apparent overstatement
of requirements.
DECISION
    
Quality Technology, Inc. protests the cancellation of request for
quotations (RFQ) No. 030110, issued by the Department of Justice, Bureau
of Alcohol, Tobacco, Firearms and Explosives (ATF), for Enterprise
Architecture Document (EAD) support services. The EAD defines the
enterprise architecture required to ensure efficient use of information
technology resources to meet the agency*s mission and goals; the RFQ
provides for the upgrade and update of the EAD. Quality, the incumbent
contractor, contends that the cancellation lacks a reasonable basis and is
only a pretext by the agency to avoid our Office*s review of an earlier
protest Quality filed challenging the agency*s failure to solicit its
quotation under the RFQ.
    

   We deny the protest.
    
The agency issued the RFQ on September 3, 2003, to four Federal Supply
Schedule vendors, but not to Quality.  Although Quality obtained a copy of
the solicitation from another vendor, it did not submit a quotation.  On
September 22, Quality filed a protest with our Office contending that the
agency*s failure to solicit its quotation was a de facto debarment of the
firm.[1]  The protester alleged that agency personnel told Quality that it
was not solicited because the agency decided *to move in a different
direction,* which Quality considered to be a de facto debarment of the
firm.  Protest at 3.
    
The record shows that shortly after the RFQ was issued, and prior to the
filing of Quality*s initial protest, the contracting officer*s technical
representative (COTR) (by e-mail communication of September 9) raised
concerns to other contracting personnel about the adequacy of available
funding for the work required under the RFQ.  Specifically, she recognized
that funding for the RFQ*s services was available in the amount of
$[deleted]; these funds were for [deleted] support personnel at a total of
[deleted] labor hours.[2]  The RFQ, on the other hand, required five
support personnel at a total of 8,820 labor hours.  The three quotations
received ranged from $[deleted] to $[deleted].  Finding that some RFQ
requirements may be duplicative, and that efficiency and economy would be
better achieved by ordering some of the work under other agency contracts
for particular types of work, the agency determined that cancellation was
warranted.  The effective date of the cancellation (September 24) was 2
days after Quality had filed its earlier protest of the agency*s failure
to request a quotation from Quality.
    
A contracting agency need only establish a reasonable basis to support a
decision to cancel an RFQ.  DataTrak Consulting, Inc., B-292502 et al.,
Sept. 26, 2003, 2003 CPD P: 169 at 5; Surgi-Textile, B-289370, Feb. 7,
2002, 2002 CPD P: 38 at 2.  It is
well established that lack of funding for a procurement provides a
reasonable basis for cancellation, James M. Carroll--Recon., B-221502.3,
Mar. 24, 1986, 86-1 CPD P: 290 at 3; cancellation is also warranted where
a solicitation fails to reflect an agency*s actual requirements and
reassessment of agency needs results in an agency no longer having a
requirement included in that solicitation.  See USA Elecs.,
B‑283269.2, Oct. 5, 1999, 99-2 CPD P: 67 at 3.  So long as there is
a reasonable basis for doing so, an agency may cancel a solicitation no
matter when the information precipitating the cancellation first arises,
even if it is not until quotations have been submitted and evaluated. 
Id.   Our review of the record here provides no basis for us to question
the reasonableness of the agency*s cancellation of the RFQ.  ATF has
adequately demonstrated that the cancellation reasonably resulted from
funding limitations and a subsequently discovered overstatement of its
actual needs.
    
The protester contends that a lack of documentation in the record supports
its belief that the agency fabricated its basis for cancellation in order
to avoid review of Quality*s initial protest of alleged de facto
debarment.  We agree with Quality that the agency*s supporting
documentation in the record is minimal, and that most of the narrative
explaining the agency*s concerns may have been prepared for use in the
agency*s report in response to this protest, as much of the documentation
is undated.  Our review of the record, however, shows that there is
sufficient contemporaneous documentation (namely, funding documentation
and e-mail communications) to support the reasonableness of the agency*s
cancellation.
    
As a preliminary matter, the record shows, and the protester acknowledges,
that the agency has produced a funding document from the agency*s
infrastructure budget documentation for the EAD services, indicating that
a total of $[deleted] was available for the services called for under the
RFQ.  Given that the quotations received in response to the RFQ greatly
exceeded the amount of funding available, the agency clearly had a
reasonable basis to cancel the RFQ.  James M. Carroll--Recon., supra.   
    
Further, as stated above, as early as September 9, almost 2 weeks before
the protester filed its initial protest, the COTR sent an e-mail
communication to contracting personnel raising a concern that there would
not be adequate funding for the RFQ*s requirements.  Specifically, she
pointed out that $[deleted] had been made available for the services of
[deleted] workers for a total of [deleted] hours; she discovered, however,
that the RFQ instead required five workers, representing almost 9,000
hours of work.  In response, one contracting staff member, in an e-mail
communication of September 11, asked if vendors could instead partially
staff the project in order to be within available funding amounts,
suggesting that much less than the work requirement reflected in the RFQ
would be acceptable to the agency.  While Quality suggests that this
response e-mail supports its argument against cancellation, we believe it
fully supports the reasonableness of that action as it indicates that many
of the personnel and hours included in the RFQ may not be needed to
satisfy the agency*s actual performance requirements.
    
In short, the lack of funding for the RFQ*s requirements clearly supports
the reasonableness of the cancellation.  Moreover, as the agency points
out, the record indicates that the agency*s actual requirements, currently
under agency review, were not accurately defined in the RFQ, and may have
been overstated, as much of the work may more reasonably be procured under
other agency contracts to reduce repetitive effort and to benefit from
volume discount pricing.
    
The protester*s mere disagreement with the agency*s otherwise reasonable
bases for cancellation provides no basis to question the propriety of that
cancellation.  Nor is there any evidence in the record supporting the
protester*s contention that the proffered rationale for cancellation is
merely a pretext by the agency to avoid review of its earlier protest.  We
will not attribute bias to an agency on the basis of inference and
supposition and, without strong evidence to support such a conclusion, we
will not find that agency employees acted in bad faith.  DataTrak
Consulting, Inc., supra; Chenega Mgmt., LLC, B-290598, Aug. 8, 2002, 2002
CPD P: 143 at 4.
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    
    
    
    

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

   [1] In light of the agency*s subsequent cancellation of the RFQ, our
Office dismissed Quality*s initial protest, since cancellation of a
solicitation renders a protest academic.  See Dyna-Air Eng*g Corp.,
B‑278037, Nov. 7, 1997, 97-2 CPD P: 132.  During that protest and
the current protest, the agency has continued to assert that it will
promptly notify Quality of any resolicitation of the canceled acquisition
and invite its participation in that and future procurements, if it is
otherwise eligible.
[2] The agency reports that $[deleted] (the amount shown on an ATF
requisition form) was allocated for ATF*s EAD needs, and that the
$[deleted] funding total includes $[deleted] for EAD support services for
the Tax and Trade Bureau, formerly associated with ATF.