TITLE: B-400127, Zia Engineering & Environmental Consultants, LLC; Garrison Engineering & Maintenance Services, LLC, August 7, 2008
BNUMBER: B-400127
DATE: August 7, 2008
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B-400127, Zia Engineering & Environmental Consultants, LLC; Garrison Engineering & Maintenance Services, LLC, August 7, 2008

   Decision

   Matter of: Zia Engineering & Environmental Consultants, LLC; Garrison
   Engineering & Maintenance Services, LLC

   File: B-400127

   Date: August 7, 2008

   Edward H. Martinez, for Zia Engineering & Environmental Consultants, LLC,
   and Garrison Engineering & Maintenance Services, LLC, the protesters.
   Maj. David Abdalla, Department of the Army, for the agency.
   Paula A. Williams, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest of agency's cancellation of a solicitation for base operations
   support and logistics services, under a public-private competition
   pursuant to Office of Management and Budget Circular No. A-76, is denied
   where the record shows that the decision to cancel was reasonably based on
   a conclusion that the solicitation no longer reflects the agency's actual
   needs because future mission demands will significantly increase those
   needs.

   DECISION

   Zia Engineering & Environmental Consultants, LLC and Garrison Engineering
   & Maintenance Services, LLC protest the cancellation of request for
   proposals (RFP) No. W9124R-07-R-0009, issued by the Department of the Army
   pursuant to Office of Management and Budget (OMB) Circular No. A-76 for
   base operations and logistics services at the U.S. Army Garrison White
   Sands Missile Range (WSMR), New Mexico.

   We deny the protests.

   In July 2006, the Army announced its intent to conduct an A-76 cost
   comparison study regarding WSMR's public works and logistical functions.
   Pursuant to that announcement, on February 28, 2008, the Army issued the
   RFP to potential private sector offerors with an April 24 due date for
   receipt of proposals. Thereafter, on March 19-20, the agency conducted a
   site visit and held a pre-proposal conference for potential offerors.

   Meanwhile, on March 7, the Director of the Installation Management Command
   (IMCOM) for the Western Region sent the Commanding General for IMCOM a
   formal request for authorization to cancel the WSMR solicitation. In
   making the request, the Director identified various significant changes
   that had occurred since the A-76 study had begun, such as, the Army's
   announced plans to station the 2d Engineering Battalion at WSMR, and the
   addition of a Heavy Brigade Combat Team to WSMR. In addition, the Director
   noted a staffing shortfall at WSMR exacerbated by the remote location of
   the garrison, as well as the ongoing A-76 study. Agency Report (AR)
   exh. 8, Letter from the IMCOM Director, at 1-3 (Mar. 7, 2008). Thereafter,
   on March 21, the Assistant Secretary of the Army sent a memorandum to the
   Deputy Under Secretary of the Department of Defense (DoD) seeking approval
   of IMCOM's request to cancel the WSMR A-76 competition. Id. exh. 10,
   Memorandum from Army to DoD (Mar. 21, 2008).

   On April 22, the contracting officer (CO) received an email from IMCOM
   directing the cancellation of the A-76 competition. AR exh. 15, Email to
   CO. That same day, the CO issued amendment No. 0003 canceling the
   solicitation and distributed the amendment, by email, to the protesters
   and other site attendees. Id. exh. 14, Email from CO (Apr. 22, 2008).
   However, on April 22 the agency had already received proposals from Zia
   and GEMS, but had not opened them since cancellation occurred prior to the
   scheduled closing date of April 24.

   In response to the protesters' request for an explanation of the decision
   to cancel the solicitation, the contracting officer stated that:

     Increased mission demands and future restationing efforts risk mission
     failure due to support of additional installation requirements while
     simultaneously conducting an A-76 competition.

     The Army recently unveiled its Grow the Army plan which includes
     restationing a Brigade Combat (Heavy) Team, the 2d Engineering
     Battalion, and expanding the Army Test and Evaluation Command mission.
     Support to these additional units present a tremendous challenge to the
     already-taxed WSMR workforce. In addition, WSMR is an isolated site with
     limited ability to attract and retain a quality workforce. Over the past
     several months, WSMR faced significant staffing challenges due to the
     current public works/logistics functions A-76 competition. Current
     on-board personnel are exiting in advance of the competition's results
     and recruitment efforts are very difficult since personnel are hesitant
     to apply for a position under competition. Consequently, WSMR has not
     filled over 40 key positions within its public works and logistics
     directorates.

     Given the above circumstances, which placed WSMR at a significant risk
     of mission failure, the IMCOM leadership requested relief from
     continuing a competition which was severely limiting the garrison's
     ability to support current and near term mission growth.

   AR exh. 17, CO Letter to the Protesters, at 1-2 (Apr. 29, 2008).[1] These
   protests followed.

   The protesters contend that the cancellation was improper because the
   agency did not disclose to potential private sector offerors that agency
   officials had requested cancellation of the A-76 competition. In the
   protester's view, it was unfair to ask private sector offerors to expend
   resources to respond to the RFP while the agency was actively seeking to
   cancel the ongoing cost comparison study. Protest at 2-5; Protesters'
   Comments at 2, 5.

   Where an agency determines that a solicitation does not accurately reflect
   its needs, cancellation is appropriate. Rice Servs., Ltd., B-284997.5,
   Mar. 12, 2002, 2002 CPD para. 59 at 4. A contracting agency need only
   establish a reasonable basis to support a decision to cancel an RFP; this
   authority extends to the cancellation of solicitations used to conduct
   A-76 cost comparisons. IT Corp., B-289517.3, July 10, 2002, 2002 CPD para.
   123 at 3. So long as a reasonable basis exists to exercise this authority,
   an agency may cancel a solicitation regardless of when the information
   first arises or should have been known, even if the solicitation is not
   canceled until after proposals have been submitted and evaluated, or even
   if discovered during the course of a protest. Glen/Mar Constr., Inc.,
   B-298355, Aug. 3, 2006, 2006 CPD para. 117 at 2; Global Solutions Network,
   Inc., B-289342.4, Mar. 26, 2002, 2002 CPD para. 64 at 3.

   As discussed above, the record shows that due to the agency's increased
   mission demands caused by the future addition of two military units, the
   agency determined that the solicitation no longer reflected its actual
   needs. Given that the additional military units will significantly
   increase the total population at WSMR, which would then impact the scope
   of base operating and logistics services required at the garrison, we find
   that the agency has demonstrated a reasonable basis for its decision to
   cancel this procurement. See Satellite Servs., Inc., B-288848.3, Apr. 28,
   2003, 2003 CPD para. 88 at 14.

   We also find no basis to grant the protesters' request to recover their
   costs for competing in this procurement. The Competition in Contracting
   Act of 1984, 31 U.S.C. sect. 3554(c)(1) (2000), and our implementing
   regulations, 4 C.F.R. sect. 21.8(d) (2008), provide for our Office to
   recommend reimbursement of proposal preparation costs only where we
   determine that "a solicitation, proposed award, or award does not comply
   with statute or regulation." The fact that the agency was seeking
   permission to cancel the procurement, while simultaneously conducting it,
   does not render unreasonable an otherwise appropriate basis for canceling.
   Since the cancellation here was proper, and there is no other reason to
   conclude that the agency has acted contrary to statute or regulation, we
   have no basis to recommend the recovery of proposal preparation costs. See
   Bahan Dennis Inc., B-249496.3, Mar. 3, 1994, 94-1 CPD para. 184 at 6.

   The protests are denied.[2]

   Gary L. Kepplinger
   General Counsel

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

   [1] This letter acknowledged that, as requested by the protesters, their
   unopened proposals were returned.

   [2] We recognize the harshness of this result, and would have preferred
   that the agency provide notice of its deliberations so that businesses
   could assess for themselves the risk of writing a proposal to perform the
   work. On the other hand, we also recognize that agencies are under
   significant pressures in this area, including pressure to complete cost
   comparison studies expeditiously once they are begun. See e.g., Alan D.
   King, B-295529.6, Feb. 21, 2006, 2006 CPD para. 44 at 6 n.7. Under these
   circumstances, we think private sector contractors participating in
   public-private competitions bear a certain amount of risk that
   circumstances could change before the cost comparison study is completed.