U.S. Marine Management, Inc.

B-417353.3,B-417353.4 Sep 23, 2019 Jump To FULL REPORT VIEW DECISION RELATED PAGES GAO CONTACTS Highlights U.S. Marine Management, Inc. (USMMI), of Norfolk, Virginia, protests the cancellation of request for proposals (RFP) No. N32205-19-R-3510, issued by the Department of the Navy, Military Sealift Command (MSC), for the charter of a maritime support vessel (MSV). USMMI contends the agency lacked a reasonable basis to cancel the solicitation. We deny the protest. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of:  U.S. Marine Management, Inc. File:  B-417353.3; B-417353.4 Date:  September 23, 2019 Jason A. Carey, Esq., J. Hunter Bennett, Esq., Evan R. Sherwood, Esq., and Peter B. Terenzio III, Esq., Covington & Burling, LLP, for the protester. Jeffrey N. Davenport, Esq., Department of the Navy, for the agency. Louis A. Chiarella, Esq., and Peter H. Tran, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Cancellation of request for proposals for the charter of a maritime support vessel was reasonable where proposals received were substantially higher than agency’s available funding. DECISION U.S. Marine Management, Inc. (USMMI), of Norfolk, Virginia, protests the cancellation of request for proposals (RFP) No. N32205-19-R-3510, issued by the Department of the Navy, Military Sealift Command (MSC), for the charter of a maritime support vessel (MSV).  USMMI contends the agency lacked a reasonable basis to cancel the solicitation. We deny the protest. BACKGROUND The RFP was issued on December 28, 2018, to acquire, on behalf of the U.S. Special Operations Command (USSOCOM), the chartering of the MSV-3 vessel for classified maritime security missions worldwide.[1]  Contracting Officer’s Statement (COS)/ Memorandum of Law (MOL) at 1; Agency Report (AR), Tab 14, RFP at 2.  The solicitation included a lengthy performance work statement (PWS) which set forth the vessel’s specifications and performance requirements.  AR, Tab 30, PWS at 3-69.  The RFP, as issued, contained no “country-of-origin” restriction pertaining to the vessels that offerors proposed.  AR, Tab 32, RFP Questions and Answers; Tab 33, RFP amend. 002 at 1. Prior to the RFP’s issuance, MSC conducted two market surveys.  COS/MOL at 2.  These surveys resulted in the development of an independent government estimate (IGE) as well as USSOCOM’s budget for the MSV-3 procurement (approximately $223 million for all performance periods).  Id.; AR, Tab 12, MSV-3 Acquisition Plan at 5.  USSOCOM thereafter provided MSC with a military interdepartmental purchase request (MIPR) for the MSV-3 procurement, certifying fiscal year 2019 (FY19) funds as available in the amount of $120 million.  AR, Tab 36, MSV-3 MIPR at 1-2; Tab 63, USSOCOM Comptroller Declaration. Two offerors, including USMMI, submitted proposals by the April 18, 2019, closing date.  As initially proposed, USMMI’s total price was $[DELETED] while the second offeror’s total price was $[DELETED].  AR, Tab 45, Summary of Offerors’ Proposed Prices. Several events relevant to the protest here then transpired.  First, MSC determined that offerors’ prices “far exceed[ed] the available budget authority” for any fiscal year, and that the command had only received $120 million “from the sponsor for the award obligation.”[2]  AR, Tab 38, MSC E-mail, May 10, 2019, at 2.  Consequently, MSC decided to engage in preliminary discussions and provided offerors with two scenario-based questions to determine the impact on proposed pricing.  AR, Tab 39, MSC Preliminary Discussions Letters at 1-4.  With regard to the second scenario (which represented the more significant change to the MSV-3 requirements), USMMI’s reduced proposed price was$[DELETED], while the second offeror’s reduced price was $[DELETED].  AR, Tab 59, Contracting Officer’s Declaration, Aug. 8, 2019.  On May 24, because offerors’ prices--even as reduced--greatly exceeded the available FY19 funds and total budget, USSOCOM decided to withdraw its funding for the MSV-3 procurement.  AR, Tab 40, USSOCOM E-mail to MSC, May 24, 2019, at 3; Tab 63, USSOCOM Comptroller Declaration (“Because my headquarters did not have sufficient funds to cover the significant gap between proposed prices and available funding . . .