TITLE: B-299042.2, Southwest Research Institute, March 23, 2007
BNUMBER: B-299042.2
DATE: March 23, 2007
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B-299042.2, Southwest Research Institute, March 23, 2007

   Decision

   Matter of: Southwest Research Institute

   File: B-299042.2

   Date: March 23, 2007

   Philip J. Davis, Esq., and William J. Colwell, Jr., Esq., and Jon W. Burd,
   Esq., Wiley Rein, LLP, for the protester.

   Brent Curtis, Esq., Lt. Col. Kenneth Roth, and Thomas A. Biediger, Esq.,
   Department of the Air Force, for the agency.

   Jacqueline Maeder, Esq., and John M. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Cancellation of request for quotations (RFQ) was unobjectionable where
   agency reasonably determined that evaluation scheme did not reflect its
   needs, and that revising scheme would lead to enhanced competition.

   DECISION

   Southwest Research Institute (SwRI) protests the Department of the Air
   Force's decision to cancel request for quotations (RFQ) No. 174958, for
   boom operator/trainer simulation systems, and resolicit the requirement.
   SwRI argues that its proposal met all RFQ requirements, and that it should
   be issued a purchase order.

   We deny the protest.

   The RFQ was issued on September 19, 2006 to General Services
   Administration (GSA) Federal Supply Schedule (FSS) contract holders for
   software for the installation, integration, and testing of three boom
   operator weapons systems trainers, one boom operator simulation system,
   and one Distributed Missions trainer, all to be used in training personnel
   to operate the refueling boom on the KC-135 aircraft.[1]

   The solicitation contemplated the issuance of a fixed-price purchase order
   to the vendor whose quotation represented the "best value" to the
   government considering price and the following technical evaluation
   factors: conformance to the description of supplies, transition plan, past
   performance, demonstrated capabilities, and escalation plan. Vendors were
   to have experience under 17 demonstrated capabilities subfactors,
   including, for example, designing, programming, and implementing basic,
   generalized, and optimized collision detection systems in simulation and
   real-time systems, and designing and implementing generalized
   physics-based simulations and real-time graphics special effects.

   The agency received two quotations--from SwRI and QuantaDyn Corporation.
   The agency determined that QuantaDyn's quotation represented the best
   value, and issued a purchase order to that firm on September 28. On
   October 20, following a debriefing, SwRI filed a protest with our Office
   challenging that decision. In response to that protest, the agency
   proposed corrective action and, by letter dated November 1, notified our
   Office that it would suspend work under the purchase order and reevaluate
   the quotations. We dismissed the protest as academic on November 9
   (B-299042).

   In its subsequent reevaluation, the Air Force determined that neither
   vendor met all 17 of the demonstrated capabilities subfactors. The Air
   Force determined that SwRI failed to meet the "implementation" aspect of
   the subfactors including, for example, those related to collision
   detection systems, because its quotation cited experience with a
   simulation project that had never been built, tested and fielded. Agency
   Report (AR), Tab 4, Contracting Officer's Statement of Facts (COSOF), at
   4; AR, Tab 23, Draft Technical Reevaluation, at 6. Based on the
   reevaluation results, the agency determined that the evaluation scheme for
   the 17 subfactors--which required a pass/fail determination rather than
   comparative judgments as to how well a vendor demonstrated these
   capabilities--was too restrictive. The Air Force concluded that the RFQ
   overstated its needs, and therefore canceled QuantaDyn's purchase order
   and advised the vendors that it would issue a revised solicitation that
   incorporated clear and achievable evaluation criteria that would increase
   the potential for competition and ensure a fair and proper award. AR, Tab
   4, COSOF, at 4.

   SwRI challenges the cancellation on the ground that the agency is reading
   the RFQ more restrictively than warranted--the agency did have the leeway
   to make comparative judgments--so that cancellation was not necessary to
   meet the agency's needs and enhance competition. SwRI further claims that
   its quotation did in fact satisfy the "implementation" requirements, and
   therefore was acceptable, because it had "implemented certain technical
   skills" in its design and development work, and a fielded product or
   system was not required. Protester's Comments at 12. SwRI concludes that
   it should have been issued the purchase order.

   A contracting agency need only establish a reasonable basis to support a
   decision to cancel an RFQ, Surgi-Textile, B-289370, Feb. 7, 2002, 2002 CPD
   para. 38 at 2, and may cancel no matter when the information precipitating
   the cancellation first arises, even if it is not until offers (or, as
   here, quotations) have been submitted and evaluated. A-Tek, Inc.,
   B-286967, Mar. 22, 2001, 2001 CPD para. 57 at 2-3.

   The cancellation here was reasonable. We agree with the agency that the
   wording of the evaluation scheme for the 17 subfactors required specific
   experience and called for the evaluation under each subfactor on a yes/no
   or meets/does not meet basis. For example, as noted above, the RFQ's
   explanation to vendors of the evaluation criteria stated that the vendor
   "[m]ust have extensive experience designing, programming, and implementing
   basic, generalized, and optimized collision detection systems," and
   "[m]ust have experience designing and implementing generalized
   physics-based simulations." RFQ at 4. Contrary to the protester's general
   assertion that the agency had leeway to conduct a comparative evaluation
   under the subfactors, the RFQ's use of the language "must have"
   unequivocally made experience in these areas mandatory; we agree with the
   Air Force that a lack of experience performing different aspects of the
   described effort would require rejection of a quotation. This being the
   case, and given that neither quotation was acceptable due to the mandatory
   nature of the subfactors, it was entirely understandable that the agency
   would reconsider its need for the subfactors to be mandatory. The agency
   ultimately determined that a relaxed approach--under which vendors'
   experience would be evaluated on a comparative basis--would meet its
   needs, and also would enhance competition. In this latter regard, SwRI's
   and QuantaDyn's could be considered, and other vendors might also choose
   to compete (neither the protester nor the agency address this
   possibility). Under these circumstances, the cancellation was legally
   unobjectionable.[2]

   SwRI contends that it should be reimbursed its quotation preparation costs
   and the costs of pursuing this and its prior protest. See Bid Protest
   Regulations, 4 C.F.R. sect. 21.8(e) (2006). However, the agency
   promptly--i.e., before the agency report and comments were filed--took
   corrective action in response to SwRI's original protest; we will not
   recommend reimbursement of protest costs in these circumstances.
   Information Ventures, Inc.--Costs, B-294567.2, Nov. 16, 2004, 2004 CPD
   para. 234 at 2. Further, since we have denied its protest of the
   cancellation, there also is no basis for recommending reimbursement of
   SwRI's quotation preparation costs or the costs of pursuing that protest.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] The FSS program, which is managed and directed by GSA, is a simplified
   process of obtaining commercial supplies and services at prices associated
   with volume buying. Federal Acquisition Regulation (FAR) sect. 8.402(a).

   [2] Because we have found the cancellation reasonable, the issue of the
   acceptability of SwRI's quotation is academic. Even if we agreed with SwRI
   that the quotation was acceptable, the cancellation would be justified in
   light of the agency's desire for greater competition. In any case, it
   appears that the agency reasonably determined that SwRI's quotation was
   unacceptable for failure to demonstrate "implementation" experience, as
   required under certain of the subfactor descriptions. In this regard,
   Webster's Ninth New Collegiate Dictionary (1987) defines "implement" as
   accomplishing, carrying out or giving practical effect to ensure actual
   fulfillment. SwRI's interpretation that simply using certain skills is
   inconsistent with this definition.