Progressive Services Corporation

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: Progressive Services Corporation

File: B-404183; B-404251.2

Date: January 11, 2011

DIGEST

An agency reasonably canceled solicitations where the solicitations failed to fully inform vendors of the bases on which past performance would be evaluated.

Progressive Services Corporation (PSC), of Beaverton, Oregon, protests the cancellation of requests for quotations (RFQ) SPM8E6-10-Q-2013 and SPM8E6-10-Q-2318 issued by the Defense Logistics Agency (DLA) for lumber. PSC argues that DLA canceled the solicitations as a pretext to avoid GAO's review of the protests.

We deny the protests.

The RFQs were issued for the delivery of lumber to the Defense Distribution Depot in Germersheim, Germany. RFQ -2013 at 4; RFQ -2318 at 4. RFQ -2013 sought 500,000 board feet (bf) of softwood lumber boards; RFQ-2318 sought 300,000 bf of softwood lumber boards. RFQ -2013 at 6-7; RFQ -2318 at 6-7. The RFQs provided that award would be made on a best value basis, considering price, delivery, and past performance, and that delivery and past performance were more important than price. RFQ -2013 at 2; RFQ -2318 at 2. The RFQs further provided that past performance would be determined by review of government records of prior deliveries by the offeror and quality of the material delivered. Id.

With regard to RFQ -2013, DLA issued a purchase order to Forest Products Distributors, Inc. PSC protested to our Office arguing that the agency's evaluation of its quotation with regard to past performance was unreasonable. In response, DLA advised our Office that it had terminated the purchase order, canceled the underlying RFQ, and planned to reevaluate its requirements.[1] On September 28, we dismissed the protest as academic.

With regard to RFQ -2318, DLA issued a purchase order to Universal Forest Products, Inc. PSC protested that the agency's evaluation of its quotation with regard to past performance was unreasonable. In response, DLA again advised our Office that it had terminated the purchase order and the underlying RFQ in order to re'examine the agency's past performance evaluation methodology and to ensure that the methodology is appropriate to meet the agency's needs. On November 4, we dismissed the protest as academic.

PSC contends that DLA's rationale for canceling the two RFQs was a pretext to avoid these protests. PSC makes a number of arguments in support of its position, all of which we have fully considered, although we only address PSC's primary arguments in this decision.

Contracting officials in negotiated procurements have broad discretion to take corrective action where the agency determines that such action is necessary to ensure fair and impartial competition. Major Contracting Servs., Inc., B-400737.2, Dec. 17, 2008, 2008 CPD para. 230 at 2. Where, as here, a protester alleges that an agency's rationale for cancellation is but a pretext to avoid resolving a protest, we review the agency's rationale to ensure that the agency has a reasonable basis for the cancellation. See Superlative Techs., Inc., B-310489, B-310489.2, Jan. 4, 2008, 2008 CPD para. 12 at 7.

DLA explains that, as a result of PSC's protests, the agency began a review of the methodology it used to evaluate quotations, and realized that the RFQ did not adequately advise offerors as to how past performance would be evaluated. AR at 8. DLA further explained that it would resolicit the procurement after its review was complete.[2] Id.

It is fundamental that vendors should be advised of the basis on which their quotations will be evaluated. See C3, Inc., B'241983.2, Mar. 13, 1991, 91'1 CPD para. 279 at 3 (involving proposals). The Competition in Contracting Act of 1984, 10 U.S.C. sections 2305(a)(2)(A)(i) and (ii) (2006), requires contracting agencies to set forth in a solicitation all significant evaluation factors and their relative importance. Id. Here, DLA recognized as a result of PSC's protest that the RFQs did not clearly state the evaluation criteria pertaining to past performance. In this regard, DLA in recent weeks has issued multiple solicitations for lumber that contain detailed evaluation criteria for past performance. See, e.g., RFQ '0251 at 3; RFQ '0246 at 3; RFQ -0306 at 3. Specifically, the new evaluation criteria state:

The past performance evaluation will include a consideration of the following:
1. Failure to deliver by the required delivery date,
2. Number of late orders partially delivered (per order),
3. Contractor requested purchase order cancellations,
4. Quality issues or rejected material, and
5. Missed or late appointment times at the depot or missed or late container pickups (any appointment change not coordinated four (4) working days prior to the original appointment time will be considered a late/missed appointment).

Id. Correcting this error to allow for a fair and equal competition provides a reasonable basis for canceling the solicitations. Accordingly, we do not find that the agency's cancellation of the RFQs was a pretext to avoid our review.[3]

PSC states that it has no objection to the new evaluation criteria, but argues that DLA should evaluate past performance based on volume of product delivered, types of product delivered, numbers of trucks and delivery slots, and government-caused depot delays. In this regard, PSC generally challenges solicitation terms without identifying specific solicitations, thus lacking the specificity needed to provide a valid basis for protest. See 4 C.F.R. sections 21.1(c) and 21.5(f) (2010).

To the extent that PSC argues that the actions taken by DLA do not address the specific grounds of its initial protests, an agency may take corrective action where it has reasonable concern that there were errors in the procurement.[4] See Alfa Consult S.A., B-298164.2, B-298288, Aug. 3, 2006, 2006 CPD para. 127 at 2.

The protests are denied.

Lynn H. Gibson
General Counsel