________________________________________ DENIED: September 23, 1992 ________________________________________ GSBCA 11932-P VALIX FEDERAL PARTNERSHIP I, Protester, v. NATIONAL ARCHIVES AND RECORDS ADMINISTRATION, Respondent. Shelton H. Skolnick of Derwood, MD, counsel for Protester. Christopher M. Runkel and Luis A. Vidal, Legal Services Staff, National Archives and Records Administration, Washington, DC, counsel for Respondent. Before Board Judges DEVINE, HYATT, and VERGILIO. HYATT, Board Judge. Valix Federal Partnership I has protested the decision of respondent, the National Archives and Records Administration (NARA), to cancel an invitation for bids (IFB) for the acquisition of general purpose automatic data processing equipment (ADPE). By regulation, an IFB should be cancelled only when it is in the best interest of the Government, such as when the changes to the agency's requirements are so substantial in nature as to warrant a recompetition, rather than an amendment to the solicitation. Valix contends that the changes to NARA's requirements were routine, of a minor nature, and not sufficient to warrant cancellation of the IFB. For the reasons stated, we deny the protest. Findings of Fact 1. On June 17, 1992, NARA issued IFB number NAMC-92-MZ-B- 0017 for the acquisition of fourteen personal computers, two notebook computers, and two portable tape backup units. The procurement was a total small business set-aside, with a closing date and time of Tuesday, July 21, 1992, at 3:00 p.m. Protest File, Exhibit 7. Approximately 200 vendors requested copies of the solicitation. Transcript at 26-27. 2. On Friday, July 17, 1992, NARA received an agency protest alleging that the IFB's specifications were outmoded and significantly restricted the bidder's ability to offer commonly available state-of-the-art equipment. Other prospective bidders had communicated similar concerns about the specifications to the agency. Protest File, Exhibits 8-9; Transcript at 16. 3. In the contracting officer's absence, the agency protest was handled by his supervisor, the Chief of the Systems Coordination Branch, Mr. Robert Bohanan. Transcript at 16. For technical advice, Mr. Bohanan consulted with the Chief of the Systems Operation Branch, Mr. Samuel Watkins, who reviewed the agency protest and agreed that it had merit. Mr. Watkins volunteered to revise the specifications to bring them up to date. Id. at 17-18; see Protest File, Exhibit 10. 4. Mr. Watkins recommended that the specifications be modified as follows: 1) change the CPU speed from 25 megahertz (Mhz) to 33 Mhz; 2) change the requirement for "4 open slots" to "4-open 16 slots" to provide the flexibility to use either 8-bit or 16-bit cards in all the open slots; 3) upgrade random access memory (RAM) requirements from 2MB to 4MB; 4) add Windows 3.1 and a mouse; 5) upgrade hard disk capacity from 40 megabytes (MB) to 80MB; and 6) amend controller requirements to allow ESDI, IDE, and SCSI controllers. In addition, Mr. Watkins suggested, in a conversation with Mr. Bohanan, that notebook computers be purchased separately, rather than under the IFB, because of lack of success in writing a specification that guaranteed a readable screen. He had noted in the margin that the AST notebook computer could be procured locally. Protest File, Exhibit 10; Transcript at 17-18. 5. Mr. Watkins submitted his recommendations to Mr. Bohanan on July 17, 1992. Mr. Bohanan recalled that in their conversation Mr. Watkins explained his proposed revisions to him, and reminded him of the difficulty the agency had had in procuring notebook computers, but did not discuss the level of magnitude of the changes from a technical standpoint. Transcript at 17-18, 31. 6. In testimony adduced at the hearing, Mr. Bohanan recognized that no one change would have a significant impact on price. He did note that the change from 25 Mhz to 33 Mhz involved offering a new CPU. In addition he pointed out that the requirement for RAM had been doubled and the hard drive had been changed. Transcript at 20-24. 7. Upon reviewing the recommended upgrades and revisions to the IFB, Mr. Bohanan determined that implementation of the changes would result in seeking ADPE very different from the equipment the original specifications had called for. In response to protester's question he explained that he considered the changes to be major because they "changed the CPU, the storage device, and modified the operating system by putting Windows in. About the only thing we didn't change was the monitor and two floppy drives." Transcript at 24. He thus decided that it would be in the Government's best interest to cancel the IFB and consult with the contracting officer, upon his return to the office, concerning the various alternatives that might be available for procuring this equipment. Id. at 18-19. Mr. Bohanan discussed this decision with his superior, who concurred in it. Id. at 19. 8. Notices of the cancellation were sent to all vendors who had requested a copy of the IFB. The notices, which took the form of an amendment to the IFB, were sent on July 17, 1992. Protest File, Exhibit 12. Mr. Bohanan testified that at the time he arranged for the amendment to be issued, he was unaware that an explanation of the reason for cancellation was required under Federal Acquisition Regulation (FAR) 14.209 (1991). Upon the advice of his legal counsel, on July 22, 1992, he sent a written explanation to interested vendors. This was accomplished after Valix filed its protest with the Board on July 20, 1992. Transcript at 37; Protest File, Exhibit 17. 9. On Monday, July 20, 1992, the agency received calls from a number of vendors who had received notice of the cancellation. These calls were handled by several NARA employees, including Mr. Bohanan and the contracting officer, who was back in the office. Transcript at 32-33. 10. One of the telephone calls received by the contracting officer was from Valix, which had submitted a bid just prior to the cancellation.[foot #] 1 The Valix employee inquired as to what course the agency would take to procure the equipment. The contracting officer recalled that he tried to explain that there were several possibilities, including purchasing from the GSA schedule, issuing another sealed bid, and obtaining the equipment under small purchase procedures. Transcript at 48-50. 11. The Valix employee who spoke with the contracting officer testified that he did inquire why the IFB had been cancelled because, in his experience, this is an unusual occurrence. It was his recollection that the contracting officer stated that the solicitation had been cancelled by his boss and that he believed the most likely method of procurement would be under the GSA schedules. Transcript at 63-65. ----------- FOOTNOTE BEGINS --------- [foot #] 1 The Valix employee who testified was the individual who prepared the company's bid. Transcript at 53, 62. In response to a NARA interrogatory, he indicated that he spent about two hours preparing a response to the IFB. ----------- FOOTNOTE ENDS ----------- 12. Both Mr. Bohanan and the contracting officer testified that as of July 20, 1992, when the Valix representative telephoned about the cancellation, the agency was completely undecided as to the best means of acquiring the equipment it needed. The options under consideration included a schedule purchase, issuance of an updated IFB, and, if the cost was determined to be low enough, use of the small purchase procedures, which was the means most commonly used by the agency to acquire personal computers. Transcript at 33, 45. 13. The Valix employee testified that in his opinion, based on many years of experience in the computer field, it was not necessary to cancel the IFB to update the specifications. Many of the changes required by NARA could easily be implemented by making routine adjustments to the motherboard of the personal computer. Rather, he believed that it would have been more appropriate simply to amend the specifications to bring them up to date. In his opinion, the changes were of a minor nature and would not have seriously impacted the ability of the interested vendors to provide the desired equipment. Transcript at 54-61. 13. Several bids were received prior to the closing date. These bids have been retained, unopened, by NARA, pending resolution of this protest. Protest File, Exhibit 19. Discussion The principal issue in this protest is whether the agency properly cancelled the solicitation. NARA maintains that the decision was well within its discretion to make; Valix contends that given the minor nature of the changes required to the specifications, the decision constituted an abuse of the agency's discretion. FAR 14.209 governs the cancellation of invitations before opening. It states as follows: The cancellation of an invitation for bids usually involves a loss of time, effort, and money spent by the Government and bidders. Invitations should not be cancelled unless cancellation is clearly in the public interest; e.g., (1) where there is no longer a requirement for the supplies or services or (2) where amendments to the invitation would be of such a magnitude that a new invitation is desirable. 48 CFR 14.209(a) (1991). The parallel provision in the predecessor Defense Acquisition Regulation has been construed by the Comptroller General to vest considerable discretion in the contracting officer in deciding whether to cancel prior to bid opening.[foot #] 2 In particular, in construing this provision, GAO has stated that "the determination whether a cogent reason exists for cancellation is primarily within the discretion of the contracting agency and therefore will not be disturbed . . . absent clear proof of abuse of discretion." MICA, Inc., B-200735, 81-1 CPD 513 (June 22, 1981); accord Rhodes Co., B-213068, 84-1 CPD 455 (Apr. 23, 1984); Ramsey Canyon Enterprises, B-204576, 82-1 CPD 237 (Mar 15, 1982). We agree that this is the appropriate standard for review of such a determination. In explaining his decision, the agency representative testified that he regarded the totality of the changes required to update the outmoded specifications to be substantial; he was concerned that the specifications originally issued did not properly reflect the agency's needs; and he did not know if, in light of the changes recommended, some other means of acquisition might be preferable. Accordingly, he decided to cancel to permit the agency to consider its options and to ensure that the appropriate equipment would be acquired. We detect no improper motive in this decision[foot #] 3 and regard the contracting official's explanation to be reasonable. We recognize that the vendor's differing view, that the level of changes required were not so substantial as to preclude amendment of the invitation, may also have some merit. Indeed, reasonable minds might well have reached different conclusions in weighing the considerations here. That, however, does not add up to "clear proof of abuse of discretion." Absent convincing proof of an abuse of the contracting agency's considerable discretion to cancel an invitation prior to bid closing, the agency's decision must stand. Protester's remaining point is that the agency did not, in its amendment cancelling the IFB, set forth its reason for the cancellation, contrary to the express requirement of FAR ----------- FOOTNOTE BEGINS --------- [foot #] 2 Although rulings of the Comptroller General are not binding on the Board, the Board considers that these decisions are persuasive authority. Laser Digital, Inc., GSBCA ____________________ 10810-P, et al., 91-1 BCA 23,499, 1990 BPD 373. [foot #] 3 Protester's suggestion that the agency cancelled the invitation to avoid a competitive purchase of these items is not borne out by the record. The agency candidly indicated that it might, having learned from protester that these items likely could be procured for less than $25,000, consider using small purchase procedures. It also is considering issuance of another sealed bid, as well. We see no ulterior motive in the cancellation itself such as to justify the conclusion that the contracting agency abused its discretion. ----------- FOOTNOTE ENDS ----------- 14.209(c). We note that this oversight was promptly rectified and that protester has not shown any prejudice as a result of the agency's failure to state the reason for cancellation in the amendment cancelling the IFB. Accordingly, this omission does not give rise to a basis for granting the protest. Decision The protest is DENIED. __________________________ CATHERINE B. HYATT Board Judge We concur: _____________________________ __________________________ DONALD W. DEVINE JOSEPH A. VERGILIO Board Judge Board Judge