Cancelled Solicitation: What Can A Government Contractor Do?

by PilieroMazza PLLC
Contact

Proposal preparation can be a difficult and expensive process. On top of the normal challenges of spending thousands of dollars preparing what a contractor hopes is a successful proposal, they also face the risk of an agency cancelling the solicitation and procuring the work some other way.

These cancellations routinely occur for any of a wide number of reasons, including the agency’s changed needs, a corrective action taken in response to a bid protest, or the identification of a more favorable contract vehicle. While it can be tempting to think of such a cancellation as akin to a termination for convenience, i.e. a virtually unreviewable agency action committed to the agency’s sound discretion, in fact it is possible to challenge an agency’s decision to cancel a solicitation.

A challenge to the cancellation of a solicitation or procurement is possible in a number of different forums, including the U.S. Government Accountability Office (“GAO”). Indeed, the GAO’s regulations firmly establish not only the well-known right to challenge improprieties in the terms of a solicitation or in the award of a contract, but also the right to challenge improper cancellations of solicitations and contract awards. For negotiated procurements—procurements conducted pursuant to requests for proposals or quotations—GAO case law holds that an interested party can challenge the cancellation of the solicitation where the agency lacks a reasonable basis for the cancellation.

While the “reasonable basis” standard provides the agency with wide latitude, contractors have been able to successfully challenge agency cancellations. For example, in one case, the GAO sustained the protest of a solicitation cancellation that was purportedly undertaken in order to prevent an unfair advantage stemming from the agency’s disclosure of source selection information. In that case, Superlative Technologies, Inc., the GAO found it significant that the agency’s remedy to the alleged unfair advantage was to cancel the solicitation and make a sole source award to a contractor team that included the company which received the source selection information in the first place. The GAO rightly found this to be unreasonable and sustained the protest, recommending that the agency rescind the cancellation notice and consider what other steps could be taken to remedy the improper disclosure.

While agencies are generally afforded wide discretion under the above standard, the GAO will apply closer scrutiny to agency cancellations that are applied after prices have been disclosed. For instance, for Invitation for Bid procurements, the GAO has held that once bids have been opened and prices disclosed, an agency can only cancel the solicitation for “cogent and compelling” reasons. Similarly, for negotiated procurements where one offeror’s prices have been disclosed, such as through bid protest proceedings, the GAO has been willing to apply a heightened review standard.

Thus, a disappointed offeror is not left entirely without remedy if the government decides to arbitrarily pull the plug on a solicitation. Filing a protest before the GAO could allow that offeror to subject the agency’s decision to scrutiny and could even result in the resurrection of the original solicitation.

Proposal preparation can be a difficult and expensive process. On top of the normal challenges of spending thousands of dollars preparing what a contractor hopes is a successful proposal, they also face the risk of an agency cancelling the solicitation and procuring the work some other way.

These cancellations routinely occur for any of a wide number of reasons, including the agency’s changed needs, a corrective action taken in response to a bid protest, or the identification of a more favorable contract vehicle. While it can be tempting to think of such a cancellation as akin to a termination for convenience, i.e. a virtually unreviewable agency action committed to the agency’s sound discretion, in fact it is possible to challenge an agency’s decision to cancel a solicitation.

A challenge to the cancellation of a solicitation or procurement is possible in a number of different forums, including the U.S. Government Accountability Office (“GAO”). Indeed, the GAO’s regulations firmly establish not only the well-known right to challenge improprieties in the terms of a solicitation or in the award of a contract, but also the right to challenge improper cancellations of solicitations and contract awards. For negotiated procurements—procurements conducted pursuant to requests for proposals or quotations—GAO case law holds that an interested party can challenge the cancellation of the solicitation where the agency lacks a reasonable basis for the cancellation.

While the “reasonable basis” standard provides the agency with wide latitude, contractors have been able to successfully challenge agency cancellations. For example, in one case, the GAO sustained the protest of a solicitation cancellation that was purportedly undertaken in order to prevent an unfair advantage stemming from the agency’s disclosure of source selection information. In that case, Superlative Technologies, Inc., the GAO found it significant that the agency’s remedy to the alleged unfair advantage was to cancel the solicitation and make a sole source award to a contractor team that included the company which received the source selection information in the first place. The GAO rightly found this to be unreasonable and sustained the protest, recommending that the agency rescind the cancellation notice and consider what other steps could be taken to remedy the improper disclosure.

While agencies are generally afforded wide discretion under the above standard, the GAO will apply closer scrutiny to agency cancellations that are applied after prices have been disclosed. For instance, for Invitation for Bid procurements, the GAO has held that once bids have been opened and prices disclosed, an agency can only cancel the solicitation for “cogent and compelling” reasons. Similarly, for negotiated procurements where one offeror’s prices have been disclosed, such as through bid protest proceedings, the GAO has been willing to apply a heightened review standard.

Thus, a disappointed offeror is not left entirely without remedy if the government decides to arbitrarily pull the plug on a solicitation. Filing a protest before the GAO could allow that offeror to subject the agency’s decision to scrutiny and could even result in the resurrection of the original solicitation.  - See more at: http://www.pilieromazza.com/blog/cancelled-solicitation-what-can-a-government-contractor-do#sthash.Gj3swGaH.dpuf

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© PilieroMazza PLLC | Attorney Advertising

Written by:

PilieroMazza PLLC
Contact
more
less

PilieroMazza PLLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.