TITLE: B-310742.2; B-310903, Para Scientific Company, February 14, 2008
BNUMBER: B-310742.2; B-310903
DATE: February 14, 2008
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B-310742.2; B-310903, Para Scientific Company, February 14, 2008

   Decision

   Matter of: Para Scientific Company

   File: B-310742.2; B-310903

   Date: February 14, 2008

   Hiram Reinhart for the protester.

   Theresa Chesnut, Esq., Department of the Navy, for the agency.

   Eric M. Ransom, Esq., and Christine S. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Cancellation of request for quotations (RFQ) was proper where agency
   reasonably determined that the RFQ materially overstated its requirements
   and that revising the RFQ would lead to enhanced competition.

   DECISION

   Para Scientific Company protests the corrective action proposed by the
   Department of the Navy, Fleet and Industrial Supply Center, San Diego, in
   response to Para Scientific's earlier protest of the issuance of an order
   to another firm under request for quotations (RFQ) No. N00259-07-T-0361,
   for microscope slides and slide cabinets. Para Scientific also protests
   the agency's cancellation of request for quotations (RFQ) No.
   N00258-08-T-0005, for histology cassettes, coverglasses, and
   chemical-resistant markers.

   We deny the protests.

   Para Scientific originally protested the issuance of an order to another
   firm under solicitation No. N00259-07-T-0361 on October 31, 2007, alleging
   that its offered price was low enough to warrant a split order and that
   its "alternate bid price" was lower than the total price offered by the
   selected firm.[1] In response to the protest, the contracting officer
   reviewed the solicitation and determined that it was in the agency's best
   interest to terminate the order and make no other order under the
   solicitation. The agency stated that the contracting officer would develop
   a new procurement strategy and, on the basis of that proposed corrective
   action, our Office dismissed Para Scientific's protest as academic on
   November 8.

   On November 9, Para Scientific filed a second protest challenging the
   proposed corrective action, alleging that the agency's decision to cancel
   the solicitation was improper and could only be justified as an attempt to
   direct an order to a favored firm or to circumvent the bid protest
   process. Protest, Nov. 9, 2007, at 1-2. On December 3, while our Office
   was engaged in developing the second protest, Para Scientific filed a
   third protest, challenging the cancellation of an unrelated solicitation
   for medical equipment, solicitation No. N00258-08-T-0005, alleging that
   the cancellation was retaliatory, and that "award manipulation is a
   possibility in this and other solicitations (see original protest as one
   other example)." Protest, Dec. 3, 2007, at 1. Due to the two protests'
   shared allegations and common facts, we will address both protests in this
   decision.

   Each solicitation had the same contracting officer and the same contract
   negotiator, and each solicitation was intended to procure specified
   brand-name items. Supplemental Agency Report (SAR) at 3. Therefore, each
   solicitation was issued as a "brand-name only" requirement, rather than a
   "brand name or equal" requirement. Id. Para Scientific nevertheless
   offered "or equal" products in response to each of the solicitations.[2]
   After receiving Para Scientific's offer under solicitation No.
   N00259-07-T-0361, the agency attempted to evaluate whether the offered "or
   equal" product met the agency's requirements, but was ultimately unable to
   make that determination. AR at 5. The contracting officer therefore issued
   an order to another firm that had offered the brand-name products at the
   lowest price.

   After Para Scientific challenged issuance of the order under that
   solicitation, the contracting officer reviewed the entire contract file
   and determined that there were significant problems with the solicitation
   that warranted cancellation. AR at 7. The contracting officer determined
   that the agency had (1) neglected to develop a sole source justification
   memorandum, (2) included technical evaluation criteria in the solicitation
   but had intended an award based solely on price, (3) included language in
   the solicitation that could suggest that "or equal" products would be
   considered even though the solicitation was issued as brand-name only, and
   (4) failed to permit a split-award where two disparate items were being
   solicited. Id. In light of these issues and Para Scientific's offer of "or
   equal" products, the contracting officer decided to cancel the
   solicitation, perform additional market research, and if a brand name or
   equal solicitation were warranted, issue a new solicitation including
   salient characteristics and all appropriate contract clauses. Id. at 8.

   After conducting this comprehensive review of solicitation No.
   N00259-07-T-0361, the contracting officer realized that the same serious
   concerns existed with regard to solicitation No. N00258-08-T-0005. SAR at
   6. The contracting officer therefore cancelled solicitation No.
   N00258-08-T-0005 based on the same rationale: that it was prudent to
   investigate whether the specifications could be less restrictive, and if a
   brand name or equal solicitation were warranted, issue a new solicitation
   including salient characteristics and all appropriate contract clauses.
   Id. at 6-7.

   Para Scientific asserts that the reasonable course of action for the
   agency was not to cancel the solicitations, but rather to issue orders to
   Para Scientific on the basis of its lowest priced quotations of
   technically equal alternative products. Para Scientific argues that it is
   being "shunned for being creative" in offering more economical "or equal"
   products where other firms merely offered the brand-name products.
   Protest, Nov. 9, 2007, at 2. In response, the agency asserts that it could
   not have properly issued orders to Para Scientific under the solicitations
   as written, and argues that its decision to cancel the solicitations was
   reasonable in view of the contracting officer's determination that each
   solicitation materially overstated the agency's requirements and that the
   agency could obtain enhanced competition by relaxing the requirements. We
   agree.

   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. A reasonable basis to
   cancel exists when a new solicitation presents the potential for increased
   competition or cost savings. Robertson Leasing Corp., B-275152, Jan. 27,
   1997, 97-1 CPD para. 49 at 3. Therefore, cancellation of a solicitation is
   proper where the solicitation materially overstates the agency's
   requirements and the agency desires to obtain enhanced competition by
   relaxing the requirements. Id.

   Here, Para Scientific's own argument that its alternative products were
   technically equal to the agency's requirements supports the reasonableness
   of the agency's decision to cancel the solicitations, given that the
   solicitations were written as brand-name only requirements. Because the
   record reflects that the solicitations' brand-name only requirements may
   have been overly restrictive, and because the agency identified multiple
   other flaws in the two solicitations, we find that the agency's decision
   to cancel the solicitations was proper.

   With regard to the allegation of bad faith implicit in Para Scientific's
   claims of retaliatory action and award manipulation, government officials
   are presumed to act in good faith and a protester's claim that contracting
   officials were motivated by bias or bad faith must be supported by
   convincing proof; our Office will not attribute unfair or prejudicial
   motives to procurement officials on the basis of inference or supposition.
   ACC Constr. Co., Inc., B-289167, Jan. 15, 2002, 2002 CPD para. 21 at 4. We
   have reviewed the record here and find no evidence of bad faith or
   prejudicial motives toward the protester; as discussed above, the agency
   had a well-supported, legitimate basis to cancel and resolicit the RFQs.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] Para Scientific quoted two prices in its response to the solicitation,
   one price for the items requested by the solicitation and an alternate,
   lower price, for "or equal" products that it regarded as technically
   equivalent. Agency Report (AR), Tab 4, Para Scientific Quote, at 2.

   [2] In response to solicitation No. N00259-07-T-0361, Para Scientific
   offered brand-name products as well as alternative "or equal" products.
   AR, Tab 4, Para Scientific Quote, at 2. In response to solicitation No.
   N00258-08-T-0005, Para Scientific offered only "or equal" products. SAR,
   Tab 6, Para Scientific Quote, at 4.