USA Electronics, B-283269.2, October 5, 1999

B-283269.2 Oct 05, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Cancellation of request for quotations for power assemblies is reasonable where agency determined that the solicitation failed to reflect its minimum needs. The protester asserts that the cancellation was motivated by the agency's desire to avoid issuing a purchase order to USA Electronics. The RFQ was issued as a small business set-aside on June 18. Under the simplified acquisition procedures in Part 13 of the Federal Acquisition Regulation. /1/ Firms were to provide a unit price and total price for eight intermediate power assemblies. B. Quotations were received from three vendors by the July 9 due date. 250 per unit was low. Because this quote was significantly lower than both the next low quote and the historical price. View Decision Matter of: USA Electronics File: B-283269.2 Date: October 5, 1999 DIGEST Attorneys DECISION USA Electronics protests the cancellation of request for quotations (RFQ) No. DAAB07-99-Q-D161, issued by the U.S. Army Communications-Electronics Command (CECOM), for eight power assemblies. The protester asserts that the cancellation was motivated by the agency's desire to avoid issuing a purchase order to USA Electronics. We deny the protest. The RFQ was issued as a small business set-aside on June 18, 1999, under the simplified acquisition procedures in Part 13 of the Federal Acquisition Regulation. /1/ Firms were to provide a unit price and total price for eight intermediate power assemblies, national stock number (NSN) 5895-01-197-4242, plus a unit and total price for an option quantity of an additional eight intermediate power assemblies. RFQ Sec. B. Quotations were received from three vendors by the July 9 due date, of which USA Electronics's quotation of $1,250 per unit was low. Contracting Officer's Statement at 1. Because this quote was significantly lower than both the next low quote and the historical price, the agency notified USA Electronics that the firm may have made a mistake in the preparation of its quotation and requested that USA Electronics verify its quote. Agency Report, Tab 2, Letter from Agency to Protester 1 (July 13, 1999). After the protester responded that one of its vendor's quotes was incorrect and that USA Electronics's correct unit price was $8,742.01, Agency Report, Tab 3, Letter from Protester to Agency 1 (July 13, 1999), the Army requested that USA Electronics submit evidence to support the claim of mistake and its intended quote. /2/ Agency Report, Tab 5, Letter from Agency to Protester 1 (July 22, 1999). In response, USA Electronics submitted four documents which the protester states show the misquoted and corrected part prices and USA Electronics's markup for each price. Agency Report, Tab 6, Letter from Protester to Agency (July 23, 1999). Upon review, the contracting officer determined that the documents submitted by USA Electronics did not constitute clear and convincing evidence of a mistake or the intended price. However, before the agency notified the protester of this determination, the contracting officer received a procurement work directive from the item manager which significantly increased the number of power assemblies required by the agency. /3/ Agency Report, Tab 7, Procurement Work Directive, at 1. The work directive also increased the option quantity. The contracting officer determined that the contract value for the increased quantity of power assemblies would be greater than the $100,000 simplified acquisition procedures ceiling. Based on the increased need, the anticipated contract value, and the contracting officer's belief that the increased requirement could result in better prices, the contracting officer determined to cancel the RFQ and resolicit under a revised solicitation. After the solicitation was canceled, USA Electronics filed this protest. USA Electronics argues that rather than cancel the solicitation, the Army should issue a purchase order to the protester under the original RFQ based on its low corrected price, and obtain any needed additional quantity under the option clause. The protester contends that FAR Sec. 13.5 /4/ allows the Army to use simplified acquisition procedures for commercial items, as required here, for acquisitions up to $5,000,000. Thus, USA Electronics argues that CECOM's justification is improper and that cancellation was motivated by the agency's desire to avoid awarding to USA Electronics. A contracting agency need only establish a reasonable basis to support a decision to cancel an RFQ. Shasta Transfer & Storage, B-261172, July 28, 1995, 95-2 CPD Para. 48 at 2; Tony Ingoglia Salami and Cheese, Inc., B-244452, Sept. 23, 1991, 91-2 CPD Para. 268 at 3. A reasonable basis to cancel exists when there is a material increase in the quantity needed to satisfy the agency's requirements, Switlik Parachute Co., Inc., B-275539, Mar. 3, 1997, 97-1 CPD Para.