TITLE: B-297815.2, Information Ventures, Inc., February 13, 2006
BNUMBER: B-297815.2
DATE: February 13, 2006
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B-297815.2, Information Ventures, Inc., February 13, 2006

   Decision

   Matter of: Information Ventures, Inc.

   File: B-297815.2

   Date: February 13, 2006

   Bruce H. Kleinstein for the protester.

   Doris Gibson, Department of Health and Human Services, for the agency.

   Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
   of the General Counsel, GAO, participated in the preparation of the
   decision.

   DIGEST

   Protest challenging cancellation of solicitation is denied where the
   agency withdrew funding for the procurement; lack of funding provides a
   reasonable basis for cancellation even if the decision to cancel was
   prompted by a protest concerning the solicitation, unless it is shown that
   the decision to withdraw funding was the result of bad faith on the
   agency's part.

   DECISION

   Information Ventures, Inc. (IVI) protests the cancellation of solicitation
   No. 2006-Q-08296, issued by the Department of Health and Human Services,
   Centers for Disease Control and Prevention, for services in support of the
   Agency for Toxic Substances and Disease Registry. The protester argues
   that the agency cancelled the solicitation in order to avoid responding to
   an earlier protest that it filed objecting to the terms of the
   solicitation.

   We deny the protest.

   The solicitation, issued on December 22, 2005, called for various services
   in support of peer review activities by the agency, such as planning
   services related to peer review and other expert panels, and identifying
   and establishing contractual relationships with expert consultants. On
   January 3, 2006, IVI filed a protest arguing that the agency should have
   issued the solicitation as a total small business set-aside. We
   subsequently dismissed the protests as academic after the agency advised,
   by letter dated January 10, that the solicitation had been canceled. IVI
   then protested the cancellation, arguing that the agency had cancelled the
   solicitation to avoid addressing the issues raised in its protest. The
   agency responded by notifying us that the solicitation had been cancelled
   due to a lack of funding.

   A contracting agency need only establish a reasonable basis to support a
   decision to cancel a request for quotations. Quality Tech., Inc.,
   B-292883.2, Jan. 21, 2004, 2004 CPD para. 29 at 2. An agency's lack of
   funding for a procurement provides a reasonable basis for cancellation, as
   agencies may not award contracts that exceed available funds. Quality
   Support, Inc., B-296716, Sept. 13, 2005, 2005 CPD para. 172 at 2. Here,
   the agency states that funds for the procurement at issue have been
   withdrawn and the solicitation has been cancelled, and has submitted
   documents showing that the funds are no longer available. Under these
   circumstances, we have no basis to object to the cancellation.

   IVI contends that the lack of funding is a pretext and in fact the agency
   cancelled the solicitation in order to avoid addressing the issues in
   IVI's initial protest. In this regard, we recognize that the notice posted
   on the FedBizOpps website announcing the cancellation states that the
   solicitation was cancelled "due to protest." Even assuming, however, that
   the agency's decision to withdraw funding and cancel the solicitation was
   triggered by the initial protest, we fail to see any basis to conclude
   that the cancellation was improper. The management of an agency's funds
   generally depends on the agency's judgment concerning which projects
   should receive funding and a contracting agency has the right to cancel a
   solicitation when, as a result of its allocation determinations, funds are
   no longer available. First Enters., B-292967, Jan. 7, 2004, 2004 CPD para.
   11 at 3. In the absence of a showing of bad faith on an agency's part in
   connection with a funding decision (which is neither alleged nor otherwise
   evident here), there is no basis to require an agency to go forward with a
   procurement which it has decided not to fund, even if the decision to
   cancel was prompted by a protest concerning the solicitation. See James M.
   Carroll--Recon., B-221502.3, Mar. 24, 1986, 86-1 CPD para. 290 at 3.
   Regarding the protester's argument that funding for the requirement was
   withdrawn after--and thus could not have resulted in--cancellation of the
   solicitation, the order in which the two events occurred is irrelevant
   given that we will not recommend that an agency proceed with an
   acquisition for which no funding is available. See Greenway Enters., Inc.,
   B-238943.2, May 4, 1990, 90-1 CPD para. 454 at 2.

   The protest is denied.

   Anthony H. Gamboa

   General Counsel