SKJ & Associates, Inc., B-294219, August 13, 2004

B-294219 Aug 13, 2004 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights SKJ & Associates, Inc. protests the cancellation of request for quotations (RFQ) No. USTDA-04-Q-0-171, issued by the U.S. Trade and Development Agency (USTDA) for analysis, grant, and audit services in connection with the USTDA's grant administration program. SKJ principally argues that the agency abused its discretion and violated the requirements of Office of Management and Budget (OMB) Circular A-76 when it canceled the RFQ. We deny the protest. View Decision B-294219, SKJ & Associates, Inc., August 13, 2004 Decision Matter of: SKJ & Associates, Inc. File: B-294219 Date: August 13, 2004 Joseph M. Jankite for the protester. David G. Hester, Esq., U.S. Trade and Development Agency, for the agency. Edward Goldstein, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Contracting agency had a reasonable basis for canceling request for quotations for analysis, grant, and audit services where the agency decided to perform the services inhouse and therefore no longer had a need for a contractor to perform the services called for under the solicitation. DECISION SKJ & Associates, Inc. protests the cancellation of request for quotations (RFQ) No. USTDA-04-Q-0-171, issued by the U.S. Trade and Development Agency (USTDA) for analysis, grant, and audit services in connection with the USTDA's grant administration program. SKJ principally argues that the agency abused its discretion and violated the requirements of Office of Management and Budget (OMB) Circular A-76 when it canceled the RFQ. We deny the protest. On May 3, 2004, the USTDA issued the RFQ as a small business set-aside under the provisions set forth in Federal Acquisition Regulation subpart 12.6 for acquisition of commercial items. The RFQ contemplated the award of a contract for analysis, grant, and audit services in connection with the USTDA's grant administration program. Specifically, the services under the RFQ involve the agency's "success fee program," and its related audit program and procedures for the deobligation of grant funds. [1] According to the agency, a single USTDA employee has performed the grant administration activities for the last several years, but, because the volume of grant administration work has recently increased, the agency issued the subject solicitation in order to obtain additional support from a contractor. Contracting Officer's (CO) Statement at 2. The RFQ estimated that the agency would require approximately 1,050 hours of services over a period of approximately 6 months. SKJ timely submitted a quotation in response to the RFQ by the May 25 closing date. The agency, however, canceled the solicitation in a letter dated June 10 because it had decided to divide the RFQ's requirements among USTDA employees and, as a consequence, it no longer had a requirement for a contractor to perform the analysis, grant, and audit services called for under the RFQ. According to the agency, this decision was made pursuant to what the agency characterized as an agency-wide reorganization plan, which included reallocating work among the USTDA's employees. CO Statement at 3-4. Asserting contract avoidance, promissory estoppel, and quantum meruit , the protester essentially argues that the agency's decision to cancel the RFQ was arbitrary and capricious. [2] A contracting agency need only establish a reasonable basis to support a decision to cancel an RFQ. DataTrak Consulting, Inc. , B-292502 et al. , Sept. 26, 2003, 2003 CPD 169 at 5. So long as there is a reasonable basis, an agency may cancel a solicitation no matter when the information precipitating the cancellation first arises, even if it is not until offers (or, as here, quotations) have been submitted and evaluated. Id. In this case, the USTDA indicates that it canceled the RFQ because it decided to perform the analysis, grant, and audit services in-house and, as a result, there was no longer a need for a contractor to perform the services. Our review of the record provides no basis for us to question the reasonableness of the agency's decision in this regard. Id. (denying protest of solicitation cancellation where the agency indicated that the services were no longer needed because they would be performed in-house). The protester also argues that the agency's cancellation of the solicitation in favor of performing the work in-house was improper because OMB Circular A-76 requires that the agency contract with the private sector for these requirements. OMB Circular A-76 describes the executive branch's policy on the operation of commercial activities that are incidental to the performance of government functions and outlines procedures for determining whether commercial activities should be operated under contract by private enterprise or in-house using government facilities and personnel.