News Printing, Inc.

B-274773.2 Feb 11, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights The PTO's patents are issued and distributed to each customer by means of an annual "soft" package or paper set. Which is responsible for procuring all the PTO's patent printing and associated production/distribution needs. Eight bids were received. NPI was the apparent low bidder. Is not subject to the Federal Acquisition Regulation (FAR). We review such a determination only to ensure that it is reasonable. GPO was not obligated to order any particular quantity. PTO's change in customer needs was not communicated to GPO until after bid opening. It is undisputed that the canceled IFB's quantity estimate was overstated by 25- to 30-percent. Accurate estimates are essential to enable bidders to prepare reasonable. View Decision Matter of: News Printing, Inc. File: B-274773.2 Date: February 11, 1997 DIGESTS Contracting agency properly canceled invitation for bids after bid opening where agency reasonably determined that solicitation's quantity estimate no longer represented the using agency's actual needs. Attorneys DECISION News Printing, Inc. (NPI) protests the cancellation of invitation for bids (IFB) No. D306-S, issued by the Government Printing Office (GPO) for patent printing, production and distribution services required by the United States Patent and Trademark Office (PTO). NPI contends that GPO's reason for canceling the solicitation after bid opening--a deficient quantity estimate--does not constitute a compelling basis for cancellation. We deny the protest. The PTO's patents are issued and distributed to each customer by means of an annual "soft" package or paper set. On July 26, 1996, GPO--which is responsible for procuring all the PTO's patent printing and associated production/distribution needs--issued the IFB, which contemplated the award of a 1-year requirements contract to the lowest-priced, responsive, responsible bidder for printing, producing and distributing an estimated quantity of 40 soft patent sets. By the August 26 bid opening date, eight bids were received. NPI was the apparent low bidder; GraphicData LLC--the incumbent--submitted the next low bid. On October 4, the PTO advised GPO of a 25- to 30-percent reduction (at least 21,091,200 pages) in its patent printing requirements. On October 21, because of the substantial decrease in the PTO's printing/distribution needs, the contracting officer canceled the procurement. [1] On November 4, NPI filed this protest against the cancellation. Although GPO, as a legislative branch agency, is not subject to the Federal Acquisition Regulation (FAR), including the requirement that a compelling reason exist to cancel an IFB after bid opening, FAR Sec. 14.404-1, the applicable provision of GPO's Printing Procurement Regulation likewise requires a compelling reason to cancel an IFB after bid opening. Printing Procurement Regulation, Chapter XI, Section 2; City Wide Press, Inc., B-231469, Aug. 10, 1988, 88-2 CPD Para. 127 at note 1. Determining whether a compelling reason exists involves the exercise of the contracting agency's judgment; we review such a determination only to ensure that it is reasonable. HLC Indus., B-265700, Nov. 17, 1995, 95-2 CPD Para. 227. NPI contends that because the IFB contemplated award of a requirements-type contract, GPO was not obligated to order any particular quantity--and consequently, the 25- to 30-percent reduction in the PTO's patent printing/distribution needs did not provide a compelling reason to cancel the IFB. The agency reports that in May of 1996, PTO determined that its 1997 patent printing requirements would be substantially lower than initially reported to GPO because numerous foreign customers had canceled their soft package subscriptions and opted instead for PTO's CD-ROM patent sets. However, PTO's change in customer needs was not communicated to GPO until after bid opening. GPO states that the significant decrease in its estimated quantity provided a cogent and compelling reason to cancel because of the government's obligation to use due care in determining estimated quantity needs and because of the possibility of government liability for the knowing use of an inaccurate estimate. In this regard, GPO reports that a recent opinion by the GPO Board of Contract Appeals (BCA), GraphicData, Inc., GPO BCA No. 35-94 (June 14, 1996), found GPO liable for inaccurate estimates set forth in this procurement's predecessor solicitation. We think GPO properly canceled the procurement. It is undisputed that the canceled IFB's quantity estimate was overstated by 25- to 30-percent, representing more than 21 million pages, clearly more than a de minimis amount.