Diversified Management Group, A Joint Venture, B-288443.2, October 12, 2001

B-288443.2 Oct 12, 2001 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Cancellation of invitation for bids (IFB) prior to bid opening was in the public interest where agency failed to investigate whether procurement should be set aside for acquisition from National Institute for the Severely Handicapped or small business prior to issuing the IFB on an unrestricted basis. Which was issued on June 26. The solicitation was issued on an unrestricted basis. The agency determined that it had erred in releasing the IFB on an unrestricted basis without evaluating potential set-aside preference categories and that corrective action was warranted. The NISH regional office notified the contracting officer that it would seek to have the services added to the procurement list. View Decision Diversified Management Group, A Joint Venture, B-288443.2, October 12, 2001 DIGEST Attorneys DECISION Diversified Management Group, a joint venture, protests the decision by the Air Force to cancel invitation for bids (IFB) No. N68711-01-B-0116 and procure the services from the National Institute for the Severely Handicapped (NISH). We deny the protest. The IFB, which was issued on June 26, 2001, sought bids to furnish base family housing maintenance services at three Navy installations in California (the Naval Base, Ventura County; the Naval Construction Battalion Center, Port Hueneme; and the Naval Air Station, Point Mugu). The IFB contemplated the award of a firm fixed-price/indefinite quantity contract for a base and four option years. The solicitation was issued on an unrestricted basis. The IFB, as amended, set bid opening for July 30. On July 27, the incumbent contractor, Tri-J Industries, protested the failure of the agency to set the IFB aside for exclusive small business competition. Upon receipt of the protest, the agency issued amendment No. 0004 to the solicitation, which postponed bid opening indefinitely. The agency determined that it had erred in releasing the IFB on an unrestricted basis without evaluating potential set-aside preference categories and that corrective action was warranted. To determine the appropriate corrective action, the contracting officer consulted his agency's "Small Business Programs Set-Aside Precedence Matrix," a document that sets out by contract type and dollar threshold the order in which the various set-aside programs should be considered. /1/ The matrix indicated that for facility support contracts of over $25,000 in value, first priority should be given to procuring the services from NISH/NIB agencies pursuant to the Javits-Wagner-O'Day (JWOD) Act , 41 U.S.C. Sec. 46-48c (1994), /2/ and that second priority should be given to setting the acquisition aside for 8(a) firms. /3/ Based on this guidance, the contracting officer contacted the regional NISH representative to inquire whether NISH would be interested in performing the solicited services. By letter dated August 10, the NISH regional office notified the contracting officer that it would seek to have the services added to the procurement list. Upon receipt of the letter from NISH, the contracting officer issued amendment No. 0005 to the IFB, which cancelled the solicitation and stated that the services would be procured in accordance with the JWOD Act. On August 17, Diversified protested the cancellation of the IFB to our Office. The protester argues that the agency's decision to cancel the solicitation lacked a reasonable basis. The FAR recognizes that the cancellation of an IFB before bid opening usually involves a loss of time, effort, and money spent by the government and bidders; consequently, it instructs that IFBs should not be cancelled prior to bid opening unless cancellation is clearly in the public interest. FAR Sec. 14.209(a). The FAR also requires that procurements meeting certain requirements be set aside for agencies for the blind or severely handicapped, /4/ for particular categories of small businesses, /5/ or for small businesses generally. /6/ Where prior to issuing a solicitation on an unrestricted basis, an agency fails to investigate whether the conditions requisite to a set-aside under the JWOD Act or for a category of small business may be expected, cancellation is clearly in the public interest if the agency subsequently determines that the solicitation should have been set aside. Ryon, Inc., B-256752.2, Oct. 27, 1994, 94-2 CPD Para. 163 at 4 (cancellation even after bid opening was proper where agency erroneously determined initially not to set procurement aside for small business). Here, the agency admits that prior to issuing the IFB on an unrestricted basis, the contracting officer failed to consider whether it would be appropriate to set this procurement aside for a JWOD participating agency or for any of the categories of small businesses entitled to priority under the FAR.