TITLE: B-296716, Quality Support, Inc., September 13, 2005
BNUMBER: B-296716
DATE: September 13, 2005
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B-296716, Quality Support, Inc., September 13, 2005

   Decision

   Matter of: Quality Support, Inc.

   File: B-296716

   Date: September 13, 2005

   Joseph G. Billings, Esq., for the protester.

   Phillipa L. Anderson, Esq., Dennis Foley, Esq., and Philip Kauffman, Esq.,
   Department of Veterans Affairs, for the agency.

   Linda C. Glass, Esq., and Michael R. Golden, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest of agency's cancellation of solicitation after receipt and
   evaluation of quotations is denied where record supports reasonableness of
   cancellation due to lack of available funding.

   DECISION

   Quality Support, Inc. protests the decision of the Department of Veterans
   Affairs (VA) to cancel a request for quotations (RFQ) for conference
   planning and support services for the Center for Quality Management, a
   field office of the VA Public Health Strategic Health Care Group. The
   protester contends that the cancellation lacks a reasonable basis and is
   only a pretext by the agency to avoid issuance of a purchase order to the
   protester.

   We deny the protest.

   On May 24, 2005, the VA Medical Center AIDS Service Office sent the
   contracting officer a request for conference planning services for a
   2-year period. This request included information that indicated the
   availability of funding for this requirement. Agency Report (AR), VA Form
   2237. The contracting officer identified three
   service-disabled-veteran-owned small business (SDVOSB) firms, including
   the protester, as potential sources under the Federal Supply Schedule
   (FSS) for the requirement. The RFQ subsequently was issued to four FSS
   vendors, including the incumbent, Courtesy Associates, a non-SDVOSB. The
   RFQ contained a statement of work that provided a description of the
   required tasks and required vendors to address these tasks in their
   quotations. The RFQ required specialized conference and logistical
   management services accommodating 10 to 150 participants in support of the
   Center for Quality Management's goals and strategic planning for the
   treatment and management of HIV infection, hepatitis C, smoking cessation,
   and other public health issues. The RFQ also listed and described
   16 conferences for a 2-year period. The list was identified as an estimate
   and noted that the conference dates were subject to change.

   The agency received two quotations, from the protester and Courtesy, in
   response to the RFQ. The evaluators rated Courtesy's quotation higher
   technically because Courtesy demonstrated a better understanding of, and
   greater experience with, the technical elements of the requirement. The
   evaluators expressed some reservation about selecting Quality because
   Quality had "only 15 years of experience," no prior working history with
   the VA, and no smoking or hepatitis C conference background. AR, Tab 6,
   BPA Scoring. The contracting officer nevertheless made a preliminary
   decision to award to Quality based on its lower price. However,
   subsequently, the program office informed the contracting officer of the
   office's intent to "pull the funding document back that they had provided
   in support of this action." Contracting Officer's Statement at 1. The
   program office further advised the contracting officer that the office had
   "made a mistake in sending me the funding document . . . in the first
   place." Id. at 2. The contracting officer subsequently received a VA
   funding document from the program office canceling the procurement
   request. VA Form 2237. Based on this information from the program office,
   the contracting officer canceled the RFQ because the agency lacked funding
   for the requirement.

   Quality protests the cancellation of the RFQ and maintains that the
   agency's decision to cancel was unreasonable. A contracting agency need
   only establish a reasonable basis to support a decision to cancel an RFQ;
   in this regard, so long as there is a reasonable basis for doing so, an
   agency may cancel an RFQ no matter when the information precipitating the
   cancellation first arises, even if it is not until quotations have been
   submitted and evaluated. Quality Tech., Inc., B-292883.2, Jan. 21, 2004,
   2004 CPD para. 29 at 2-3; DataTrak Consulting, Inc., B-292502 et al.,
   Sept. 26, 2003, 2003 CPD para. 169 at 5.

   While the agency has asserted several reasons for canceling the RFQ, it is
   well established that an agency's lack of funding for a procurement
   provides a reasonable basis for cancellation, as agencies cannot award
   contracts which exceed available funds. First Enter., B-221502.3, Mar. 24,
   1986, 86-1 CPD para. 290 at 3. While the VA concedes that the procurement
   was flawed and that there was a misunderstanding between the contracting
   officer and the program office as to this procurement, as discussed above,
   the record shows that there are no funds available for this requirement.
   Moreover, the contracting officer reports that, based on his discussions
   with the program office, it is not clear that the VA had any definite
   requirements for conferences at the time it issued the RFQ. The
   contracting officer states that he has again discussed this matter with
   the program office and the program office has confirmed that, in addition
   to a lack of funding, there is no current requirement for the conference
   planning and support services solicited under the RFQ. Supplemental Agency
   Report at 6. While we do not condone the program office's apparently
   erroneous decision to prepare a procurement request that led to the
   issuance of this RFQ, nonetheless, the record does support the contracting
   officer's decision to cancel the RFQ.

   In addition, while the protester argues that the cancellation is a
   subterfuge to avoid awarding it a contract, there is no evidence in the
   record to support this allegation. In fact, as Quality has acknowledged,
   the record shows that the agency was contemplating the issuance of
   purchase orders to both it and Courtesy. Protester's Supplemental Comments
   at 5. Procurement authorities are presumed to act in good faith and in
   order for our Office to conclude otherwise, the record must show that
   procuring officials intended to injure the protester. Cycad Corp.,
   B-255870, Apr. 12, 1994, 94-1 CPD para. 253 at 5. As there is no evidence
   of such an intent here, the protester's mere inference of bad faith is
   insufficient.

   The protest is denied.

   Anthony H. Gamboa

   General Counsel