Holiday Inn; Baymont Inn & Suites, B-288099.3; B-288099.4, September 20, 2001

Holiday Inn; Baymont Inn & Suites, B-288099.3; B-288099.4, September 20, 2001 TITLE: Holiday Inn; Baymont Inn & Suites, B-288099.3; B-288099.4, September 20, 2001 BNUMBER: B-288099.3; B-288099.4 DATE: September 20, 2001 ********************************************************************** Holiday Inn; Baymont Inn & Suites, B-288099.3; B-288099.4, September 20, 2001 Decision Matter of: Holiday Inn; Baymont Inn & Suites File: B-288099.3; B-288099.4 Date: September 20, 2001 Phillip E. Johnson, Federal Contract Specialists, Inc., for the protesters. Col. Michael R. Neds and Capt. Anissa N. Parekh, Department of the Army, for the agency. Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Cancellation of solicitation to provide meals, lodging, and transportation for applicants at a military entrance processing station is not objectionable where the agency had a reasonable basis for the cancellation. DECISION Holiday Inn and Baymont Inn & Suites protest the cancellation of request for proposals (RFP) No. DABT23-01-R-0043, issued by the Department of the Army to provide meals, lodging, and transportation for applicants processing at the military entrance processing station in Nashville, Tennessee. The protesters contend that the cancellation was the result of the agency's lack of advance planning, and in retaliation for their earlier protests challenging the unrestricted nature of this RFP and other solicitations for similar services. We deny the protests. The agency issued the RFP unrestricted on June 1, 2001, contemplating the award of a fixed-price, requirements contract to provide the required services for a base year, with up to four 1-year options. On June 15, Holiday Inn and Baymont filed protests with our Office challenging the contracting officer's (CO) decision not to set the solicitation aside exclusively for small business participation. In those protests, the firms argued that since they were both small businesses, the agency was required to set the RFP aside exclusively for small businesses. See Federal Acquisition Regulation sect. 19.502-2(b); American Med. Response of Conn., Inc., B-278457, Jan. 30, 1998, 98-1 CPD para. 44 at 2. Rather than setting the procurement aside for small businesses based on the protesters' representations, the CO decided that further market research was necessary. In this connection, the CO explains that based on her research, she had concluded that both protesters' hotels are affiliated or franchised with national hotel chains and, thus, questioned whether the firms would be small businesses eligible to participate in this procurement. In particular, the CO states that she found that Baymont is owned by a company that also owns dozens of other lodging facilities, casting further doubt on that firm's representation. The CO states that given the results of her research, she was concerned that if the procurement were set aside, there was a possibility that the Small Business Administration (SBA) ultimately would determine that the proposed awardee was not a small business, requiring a new competition. The CO thus decided to cancel the solicitation in order to conduct a more in-depth market survey to determine whether to reissue the solicitation on a restricted basis. Upon learning of the cancellation, the firms withdrew their protests challenging the unrestricted nature of the RFP, and filed the instant protests. The protesters challenge the cancellation on several grounds. For instance, the protesters contend that the cancellation was the result of the Army's lack of advance planning. In this regard, the protesters assert that the agency's market research was flawed because it did not find any small businesses eligible to compete under this RFP. The protesters also argue that the agency canceled the solicitation in retaliation for their earlier protests challenging the unrestricted nature of this RFP and other solicitations for similar services, suggesting bad faith on the part of the agency. [1] Holiday Inn and Baymont further argue that the cancellation will unduly prolong the issuance of a new solicitation. In a negotiated procurement, the CO has broad authority to decide whether to cancel the solicitation; there need be only a reasonable basis for the cancellation. Cantu Servs., Inc., B-219998.9, B-233697, Mar. 27, 1989, 89-1 CPD para. 306 at 2. Here, we think that the agency's explanation provides a reasonable basis for the cancellation. The CO explains that prior to issuing the solicitation, she conducted a market survey which included an Internet search on "ProNet," a website maintained by the SBA.