TITLE:  Global Solutions Network, Inc., B-294054; B-294054.2, August 10, 2004
BNUMBER:  B-294054; B-294054.2
DATE:  August 10, 2004
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   Decision

   Matter of:   Global Solutions Network, Inc.

   File:            B-294054; B-294054.2

   Date:              August 10, 2004

   Gerald H. Werfel, Esq., Pompan, Murray & Werfel, for the protester.

   David T. Copenhaver, Esq., Bureau of the Public Debt, Department of the
Treasury, for the agency.

   Edward Goldstein, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Cancellation of request for proposals for support services is
unobjectionable where agency reasonably determined that the solicitation
failed to reflect its minimum needs.

   DECISION

   Global Solutions Network, Inc. protests the cancellation of request for
proposals (RFP) No.A BPD-02-R-0018, issued by the Bureau of the Public
Debt, Department of the Treasury, for support services.  Global maintains
that the decision to cancel the solicitation lacks a reasonable basis.

   We deny the protest.

   The Bureau of the Public Debt awards contracts on behalf of the Department
of the Treasury's nine FedSource branch offices, which operate as part of
the Department of the Treasury's *franchise fund." [2]  The branch offices
essentially market and provide a wide range of support services to other
agencies on a reimbursable basis.   

   On August 23, 2002, the Bureau of the Public Debt issued the subject RFP
as a
set-aside for small business concerns, with a portion reserved for
Historically Underutilized Business Zone (HUBZone) concerns, to provide
the FedSource-Denver office with a contractual mechanism for ordering
*various support services" for its customers, which include *other federal
agencies."  Contracting Officer's Statement at 1; RFP S C.2.a. 

   The RFP contemplated multiple awards of
indefinite-delivery/indefinite-quantity contracts with a base period of 1
year plus four 1-year option periods.  Offerors could compete for the
award of a HUBZone contract with a nationwide geographic scope (excluding
the state of Colorado); a non-HUBZone nationwide contract (excluding
Colorado); a Colorado-only contract; or a combination of these awards. 
RFP S M.2.b.  Offerors competing for the nationwide contracts were advised
that they must be *immediately capable of providing services on a
nationwide basis in at least 50% of the states in the continental United
States in all four labor
categories . . . ."  RFP S M.2.c.

   The RFP divided the general requirement for support services into four
labor categories:  (1) general administrative, (2) technical, (3)
professional, and
(4) industrial, and indicated that task orders could be issued on a
fixed-price, labor-hour, or time-and-materials basis for the services
provided.[3]  The aggregate value of the task orders issued under the
contracts awarded could not exceed $250 million.  RFP S B.4.

   By the RFP closing date, the agency had received 14 proposals for the
nationwide portion of the solicitation and 23 proposals for the Colorado
portion.  On
September 9, 2003, the agency identified nine apparent successful
offerors.  Prior to award, however, the agency received five small
business size protests, which were submitted to the Small Business
Administration for resolution.  All of the protests and appeals were
ultimately resolved by April 20, 2004. 

   While the size protests and appeals were pending, the Acting Franchise
Fund Manager made a decision to consolidate contracts across the nine
FedSource offices.  This decision was documented in an internal memorandum
dated March 12, 2004.  The memorandum explained that consolidation was
intended to eliminate *wasted time, effort and expense" for FedSource, the
Bureau of the Public Debt, and their contractors resulting from the nine
FedSource offices operating as separate autonomous entities and issuing
duplicate contracts with different terms and conditions.  Agency Report,
Tab 16.  In addition, the memorandum noted that there was an immediate
need to award a contract to cover several of the FedSource offices, and
because the subject FedSource-Denver solicitation did not have a dollar
ceiling high enough to cover the needs of the other FedSource offices, the
agency determined that it made *good business sense" to issue a master
contract for all nine offices, otherwise the agency would *have yet
another set of different contracts to manage and eventually merge
anyway."  Id.  

   Thereafter, the contracting officer issued a letter dated April 27, 2004
canceling the solicitation.  In the letter, the contracting officer
explained that due to the implementation of new management and business
practices, the agency intended to issue a solicitation that was capable of
serving the needs of all nine FedSource offices and that the agency
expected to issue the solicitation within 4 to 6 months.  Specifically,
the letter stated:

   FedSource has historically operated as nine separate, autonomous
entities.  Most entities have had their own set of contracts to support
its customer requirements and the terms and conditions of the contractual
vehicles have varied. . . .

   As a result of the changes in the FedSource structure, current contracts,
and projected needs, it has been determined that a solicitation allowing
for multiple awards to serve the needs of all nine FedSource offices will
be issued.  Issuing a FedSource-wide action will eliminate duplicative
solicitations for the same services.  This will enable the Government to
consolidate its administration to a single set of contracts resulting in
greater efficiency and lower costs.  In addition, contractors will benefit
from a single set of terms, conditions, [and] procedures when doing
business with FedSource regardless of which of the nine offices requires
these types of services.  

   Protest, Exh. 2.

   Global challenges the agency's decision to cancel the RFP.  An agency need
only advance a reasonable basis to cancel a request for proposals.  See
Daston Corp.,
B-292583, B-292583.2, Oct. 20, 2003, 2003 CPD P 193 at 3.  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 cancellation occurs after proposals have
been submitted.  Id.  As explained below, we conclude that the agency had
a reasonable basis to cancel the RFP here.

   According to the agency, it canceled the RFP in support of its effort to
consolidate contracting across the nine FedSource offices.  The agency
decided to implement a consolidated contracting approach in order to save
time, effort, and expense by eliminating the need to manage and maintain
otherwise duplicative contracts separately awarded by each FedSource
office.  Global does not contend that the agency's rationale for
consolidation is unreasonable or invalid.[4]  Rather, the protester
maintains that the agency's fundamental requirements under its
consolidated approach are no different from those called for under the
FedSource-Denver solicitation, which requires various types of support
services on a nationwide basis.  Because the solicitation is capable of
satisfying the agency's needs, according to the protester, there was no
reason to cancel the solicitation.

   The agency, however, indicates that the FedSource-Denver solicitation will
not meet its needs because the aggregate dollar ceiling of $250 million is
not sufficient to satisfy the requirements for all nine FedSource offices
for a base year, which the agency estimates to be approximately $300
million annually for both fiscal years 2004 and 2005, or for the 5-year
period from fiscal year 2005 through 2009, which the agency estimates as
more than $2 billion.  Global argues that the government's estimate for
fiscal year 2004 is overstated and maintains that the agency could use the
subject solicitation to meet its requirements for a base-year period by
issuing task orders for the entire $250 million in that year.[5]  Other
than the protester's speculation, however, there simply is nothing in the
record that casts material doubt on the agency's estimates of its
requirements.

   Moreover, even assuming that the current solicitation was capable of
meeting the agency's requirements for a base year, the agency has
indicated that it requires a support service contract capable of servicing
the nine FedSource offices on a consolidated basis for the next 5 years,
with a dollar ceiling in excess of $2 billion, and that the agency expects
to issue such a solicitation within the next few months.[6]  The protester
does not argue or suggest that the subject solicitation is capable of
meeting such a requirement.  Since the agency's consolidated needs for a
base year plus option years clearly exceed the scope of the current
solicitation, the agency reasonably canceled the RFP in favor of a
solicitation that is consistent with the agency's contract consolidation
effort and with the magnitude of the combined requirement.  See id.; USA
Elecs., B-283269.2, Oct. 5, 1999, 99-2 CPD P 67 (holding that agency
reasonably canceled solicitation where the agency's requirements had
increased).       

   The protest is denied.

   Anthony H. Gamboa

   General Counsel

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

   [1] Global also argues that the agency plans to fulfill its current
requirements under the canceled solicitation by issuing task orders under
other contracts in violation of the Federal Acquisition Regulation
requirement to set aside the subject requirements for small business
concerns.  The agency states, however, that it has not transferred the
work under the canceled solicitation to any other contract and that it has
not decided how it will fulfill these requirements.  In view of the
agency's representations, this basis of protest is speculative and
premature.  See Parcel 47C LLC, B-286324, B-286324.2, Dec. 26, 2000, 2001
CPD P 44 at 10 n.13 (dismissing protest allegation that merely anticipated
improper agency action).

   [2] Pursuant to the Government Management Reform Act of 1994, Pub. L. No.
103-356, 31 U.S.C. S 501 note (2000), Congress authorized the
establishment of six franchise fund pilot programs to provide common
support services to federal agencies on a reimbursable basis.  The
Department of the Treasury operates one of the six franchise funds.   

   [3] The solicitation provided general descriptions of the four labor
categories.  For example, the solicitation describes the *professional"
category as *includ[ing] occupations having a recognized status based upon
acquiring professional knowledge through prolonged study."  RFP S
B.11.b.3.

   [4] Global specifically states that the agency's decision to use a single
contract vehicle covering all the different FedSource locations throughout
the United States is a *business judgment" that is *not the subject of
this protest."  Comments at 4.  In this regard, however, Global expressed
its concern that by combining requirements under a single solicitation the
agency will violate the rules related to contract bundling and indicated
that to the extent the agency does not comply with the bundling rules, it
will pursue the appropriate legal remedies at that time.  Thus, the
question of whether the agency's intended contract consolidation
constitutes improper bundling is not an issue for resolution in this
protest.   

   [5] Specifically, Global asserts that the estimate is unreasonable because
it is substantially greater than the agency's actual purchases in fiscal
year 2003 of $201,168,271, and that an increase to more than $300 million
is inconsistent with the agency's revenue growth rate predictions.

   [6] While Global expresses disbelief that the solicitation will be issued
within the timeframe established by the agency, it has provided no
evidence to show that the agency's plans are unrealistic.