TITLE: B-299165, Delaware Resource Group of Oklahoma, LLC, February 26, 2007
BNUMBER: B-299165
DATE: February 26, 2007
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B-299165, Delaware Resource Group of Oklahoma, LLC, February 26, 2007
Decision
Matter of: Delaware Resource Group of Oklahoma, LLC
File: B-299165
Date: February 26, 2007
Jared B. Cawley, Delaware Resource Group of Oklahoma, LLC, for the
protester.
Alton E. Woods, Esq., and Sherry K. Kaswell, Esq., Department of the
Interior, for the agency.
Linda C. Glass, Esq., and Glenn Wolcott, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency properly canceled invitation for bids and terminated protester's
contract awarded thereunder where the agency reasonably determined that
there were material flaws in the procurement process on which award to the
protester was based.
DECISION
Delaware Resource Group of Oklahoma, LLC (DRG) protests corrective action
taken by the Department of Interior in canceling invitation for bids (IFB)
No. RMG00060009, for support services related to distribution of Delaware
Indian judgment funds, and terminating a contract awarded to DRG under
that solicitation. DRG maintains that the agency's initial source
selection decision and award to DRG was proper and that the corrective
actions are arbitrary and capricious.
We deny the protest.
In June 2006, the Department of the Interior, Bureau of Indian Affairs,
published the IFB at issue here as a 100 percent Service-Disabled
Veteran-Owned Small Business (SDVOSB) set-aside, seeking support services
associated with the development of a per capita payment roll for the
distribution of Delaware Indian judgment funds. Consistent with the sealed
bidding provisions of Federal Acquisition Regulation (FAR) Part 14, the
IFB stated: "[c]ontract award will be made to the lowest responsive and
responsible bidder." IFB at 2. Directly conflicting with that IFB
provision, as well as with the FAR Part 14 requirements regarding sealed
bids, the IFB also stated: "The contract will be awarded on the basis of
the lowest and best responsive bid." IFB, attach. A, para. 4.0. Nothing in
the solicitation identified any factors on which a determination regarding
the "best" responsive bid would be based.
On or before the July 26 bid opening date, the agency received the
following three bids:
Upper Mohawk, Inc. $632,680
DRG $670,820
Central Research $974,850
Agency Report (AR), Tab 9, Contracting Officer's Memo to File (Aug. 21,
2006).
Although DRG did not submit the lowest bid, the contracting officer
selected DRG for contract award on the basis that it had submitted the
"best responsive bid" and that DRG's price was "fair and reasonable." Id.
The contracting officer explained that her decision that DRG had submitted
the "best" bid reflected her assessment of "the general quality of [DRG's]
submitted written materials pertaining to [the] solicitation,
accomplishing the scope of work, qualifications, [and] experience," along
with the fact that DRG's bid included a cost breakout identifying the
"cost of staff, equipment, supplies and other needs for this project." Id.
The contracting officer further noted that the bid submitted by Upper
Mohawk, the lowest priced bidder, "did not contain information about
judgment fund expertise or the staff's qualifications or experience and no
cost[] break out was submitted." Id. A contract was awarded to DRG on
August 31.
In October, Upper Mohawk filed an agency-level protest complaining that
award to DRG was improper for various reasons, including the fact that DRG
had not submitted the lowest bid and was not an SDVOSB. AR, Tab 14, Upper
Mohawk Agency-level Protest. Thereafter, the agency concluded that award
to DRG had been improper and, on November 6, terminated DRG's contract for
the convenience of the government. The agency plans on resoliciting the
requirement after correcting material errors in the solicitation. On
November 9, DRG filed an agency-level protest; prior to receipt of the
agency's response to that protest, DRG filed this protest with our Office
on November 22.
DRG complains that termination of its contract was improper for various
reasons, including that the agency's inclusion of the solicitation clause
establishing the procurement as an SDVOSB set-aside was "inadvertent"
and--while not disputing the fact that it failed to submit the lowest
bid--maintains that termination of its contract 2 months after award was
"arbitrary and capricious."[1]
Contracting agencies have broad discretion to take corrective action where
they determine that such action is necessary to ensure a fair and
impartial competition. Where the agency has a reasonable concern that
there were material errors in a procurement, it is well within the
agency's discretion to correct those errors. Alfa Consult S.A., B-298288,
B-298164.2, Aug. 3, 2006, 2006 CPD para. 127 at 2; Patriot Contract
Servs., LLC, B-278276.11 et al., Sept. 22, 1998, 98-2 CPD para. 77 at 4.
Specifically, an agency may resolicit previously competed requirements
where the record shows the agency's decision to take this action is made
in good faith. Federal Sec. Sys. Inc., B-281745, Apr. 29, 1999, 99-1 CPD
para. 86 at 5.
Here, nothing in the record suggests that the agency's corrective action
was unreasonable, or that the agency acted other than in good faith.
Specifically, the contracting officer acknowledges that the solicitation
"should not have contained the language" regarding award to the "best" bid
or, alternatively, that the solicitation should have been issued as a
request for proposals pursuant to the negotiated procurement procedures of
FAR Part 15. Further, there can be no dispute that the contracting
officer's selection of DRG's bid was improperly made on the basis of
unstated evaluation factors. Finally, there is no dispute that DRG is not
an SDVOSB and therefore is not eligible for award under the SDVOSB
set-aside.[2] On this record, we have no basis to question the
reasonableness of the agency's corrective action to revise the
solicitation to correct errors which led to the improper award to DRG and
to allow all interested parties to compete.
The protest is denied.
Gary L. Kepplinger
General Counsel
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[1] The contracting officer expressly states: "We recognize our obligation
to pay start-up costs or other costs [DRG] incurred as a result of
receiving the award, consistent with the Termination for Convenience
clause, FAR 52.249-02." Contracting Officer's Statement at 3.
[2] Apparently, none of the bidders qualified as SDVOSB vendors. The
agency intends to issue the new solicitation on an unrestricted basis.