Lackland 21st Century Services Consolidated, B-285938.7; B-285938.8, December 4, 2001

Lackland 21st Century Services Consolidated, B-285938.7; B-285938.8, December 4, 2001 TITLE: Lackland 21st Century Services Consolidated, B-285938.7; B-285938.8, December 4, 2001 BNUMBER: B-285938.7; B-285938.8 DATE: December 4, 2001 ********************************************************************** Decision Matter of: Lackland 21st Century Services Consolidated File: B-285938.7; B-285938.8 Date: December 4, 2001 William A. Roberts, III, Esq., Phillip H. Harrington, Esq., William S. Lieth, Esq., and Janet L. Eichers, Esq., Wiley, Rein & Fielding, and Helaine G. Elderkin, Esq., Computer Sciences Corporation, for the protester. Sharon A. Jenks, Esq., Department of the Air Force, for the agency. Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protester's contention that it was procedurally improper for an agency to use its in-house auditors to perform a limited review of the soundness of any decision it might make before proceeding to a decision in a cost comparison conducted pursuant to Office of Management and Budget (OMB) Circular A-76 is denied where the agency sought the review after two prior reversals and a critical Inspector General report raised questions about whether any decision made could withstand scrutiny. 2. Protest alleging that the agency improperly canceled solicitation and reinitiated the A-76 cost comparison process is denied where a limited review of previous appeal and protest issues performed by in-house auditors led the agency reasonably to conclude that several problems with the solicitation may have resulted in a flawed private-sector competition. DECISION Lackland 21st Century Services Consolidated (L-21) protests a decision by the Department of the Air Force to cancel solicitation No. F41689-99-R-0031, revise its requirements, and reinitiate a cost comparison pursuant to Office of Management and Budget (OMB) Circular A-76 for base operations support (BOS) at Lackland Air Force Base, Texas. L-21, having prevailed in both the private-sector competition and the public/private cost comparison, argues that the Air Force lacks a reasonable basis to cancel the solicitation and begin the process anew. We deny the protest. BACKGROUND By press release dated August 27, 2001, the Air Force announced its intention to cancel and reinitiate its A-76 competition for these services. This protest was filed 10 days later, and was supplemented after L-21's receipt of the agency report. As this is the third dispute in a series of protests filed with our Office by L-21 challenging this A-76 cost comparison, and as some knowledge of the prior events and disputes is relevant to an understanding of the issues raised here, a brief review of this procurement is set forth below. The RFP for these services was issued on August 9, 1999, and contemplated the selection of two "best value" offerors, one to provide BOS at Lackland, the other to provide airfield support at the base; the airfield support portion of the workload was reserved for a small business. Contracting Officer's (CO) Statement at 1. At the conclusion of the private-sector source selection, the Air Force planned to conduct a cost comparison between the cost estimate for the in-house plan for a "Most Efficient Organization" (MEO), and the combined price of the two successful private-sector offerors. By May 19, 2000, L-21 and Phoenix Management, Inc. had been determined to be the best value offerors for the BOS functions and the airfield support functions, respectively. Upon comparison of the private offers with the MEO's cost estimate, the Air Force determined that performance of these services by contract would be the most economical way to proceed. As a result, by letter dated August 17, the Air Force advised L-21 that it was the conditional winner of the BOS portion of the cost comparison. After the Air Force announced the tentative selection of L-21, the MEO filed a challenge to the cost comparison with the agency's Administrative Appeal Authority. Upon completion of his review, the appeal authority reversed the result of the initial cost comparison, and determined that the Lackland workload should be performed in-house. The news of this reversal was communicated to L-21 by letter dated October 25. On November 6, L-21 filed a protest with our Office (B-285938.3), which it supplemented on November 13 (B-285938.5), raising several grounds of challenge to the decision to keep the Lackland workload in-house. By letter dated December 13, submitted in lieu of an agency report on the merits, the Air Force agreed with portions of L-21's cost comparison challenge and again reversed its decision; the Air Force advised that award would be made to L-21. Thus, the Air Force requested that the protests be dismissed as academic.