Great Lakes Dredge & Dock Company, LLC (W912BU22B0009)

B-421676.4 Dec 19, 2023 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Great Lakes Dredge & Dock Company, LLC, of Houston, Texas, protests the cancellation of invitation for bids (IFB) No. W912BU-22-B-0009, issued by the Department of the Army, Army Corps of Engineers (Corps), for beachfill and periodic nourishment for shoreline areas in New Jersey. The protester also challenges the agency's conversion of the IFB to a negotiated procurement. We sustain the protest. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. The entire decision has been approved for public release. Decision Matter of: Great Lakes Dredge & Dock Company, LLC File: B-421676.4 Date: December 19, 2023 Paul R. Hurst, Esq., Amba M. Datta, Esq., and Caitlin T. Conroy, Esq., Steptoe LLP, for the protester. Jason Shippy, Esq., and Aaron R. Inkenbrandt, Esq., Department of the Army, for the agency. Michelle Litteken, Esq., and Christina Sklarew, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging the agency’s decision to cancel an invitation for bids (IFB) after bid opening and convert the IFB to a negotiated procurement is sustained. While the agency had a compelling reason to cancel the IFB when the bids received exceeded available funding, this reason for cancelation did not provide the agency with the legal authority to convert the IFB to a negotiated procurement. DECISION Great Lakes Dredge & Dock Company, LLC, of Houston, Texas, protests the cancellation of invitation for bids (IFB) No. W912BU-22-B-0009, issued by the Department of the Army, Army Corps of Engineers (Corps), for beachfill and periodic nourishment for shoreline areas in New Jersey. The protester also challenges the agency’s conversion of the IFB to a negotiated procurement. We sustain the protest. BACKGROUND On January 24, 2023, the Corps issued the IFB under Federal Acquisition Regulation (FAR) part 14 for the periodic re-nourishment and placement of sand to replenish and repair the dune and berm system along the New Jersey coast, between Manasquan Inlet and Barnegat Inlet. Contracting Officer’s Statement (COS) at 3; Agency Report (AR), Tab 2, IFB at 76.[1] In accordance with the Water Resources Development Act of 2007, 33 U.S.C. § 2213(d)(2)(A)(iii), the cost of the project would be shared equally with the project’s non-federal sponsor, the New Jersey Department of Environmental Protection (NJDEP). COS at 2. The Corps received and opened two sealed bids on March 16, 2023, including one from the protester. COS at 3. The protester’s base bid was $67,609,987, and was the lowest bid received.[2] Id. at 3-4. Great Lakes’s bid exceeded the agency’s independent government estimate (IGE) of $46,564,970 and the amount of funds ($60,400,000) available for the project. Id. at 4. Because of the variance between the lowest bid and the IGE, the agency analyzed the IGE, held meetings with the two bidders and a prospective bidder,[3] and assessed whether additional funding could be made available. Id. at 4-7. The Corps was able to obtain $10,000,000 in additional funding, but the protester’s base bid still exceeded the funds available to the agency to award and administer the project. Id. at 7. On May 8, 2023, the Corps issued an amendment that canceled the IFB. COS at 7; AR, Tab 6, IFB amend. 4. In the amendment, the Corps cited two bases for the cancellation: that all otherwise acceptable bids received were at unreasonable prices; and that cancellation was clearly in the public’s interest, without specifying the underlying reason. AR, Tab 6, IFB amend. 4 (citing FAR 14.404-1(a), (c)(6) and (10). Subsequently, on May 12, the Corps advised Great Lakes that it was changing the method of procurement from FAR part 14 to a FAR part 15 negotiated procurement by converting the IFB to a request for proposals (RFP). Great Lakes Dredge & Dock Co, B-421676.1 et al., AR, Tab 3, Conversion Notice; AR, Tab 9, Determination & Findings at 6-7. On May 15, Great Lakes filed a protest with our Office, challenging the agency’s decisions to cancel the IFB and convert the IFB to a negotiated procurement. The agency advised our Office that it would take corrective action by reassessing the IGE and reconsidering the decisions to cancel the IFB and convert the IFB to a negotiated procurement, and we dismissed the protest as academic. Great Lakes Dredge & Dock Co,, B‑421676.1 et al., June 15, 2023 (unpublished decision). As part of the agency’s corrective action, the agency revised the IGE, resulting in a $6,329,106 increase to the base bid IGE.[4] COS at 4; AR, Tab 9, Determination & Findings at 8. However, even with the increase, the protester’s base bid exceeded the revised IGE and, when combined with the agency’s estimated internal costs, exceeded the funds available for the project.[5] COS at 12.