Government Contracts Cancellation of Solicitations Lacked Support, Ignored Rule of Two
Monday, January 18, 2021

Cancellation of Solicitations Lacked Support, Ignored Rule of Two

By Government Contracts Editorial Staff

The government’s decision to cancel two Federal Supply Schedule solicitations for training and instructor services set aside for service-disabled veteran-owned small businesses was inadequate, according to the Court of Federal Claims, because the government did not provide a sufficiently documented rationale and failed to comply with the Rule of Two. One protester contended the decision to cancel one of the solicitations was not rationally related to the “alleged procurement defect” raised in a protest before the Government Accountability Office, and the other protester alleged the decision was arbitrary and capricious. Both protesters argued cancelling the solicitations to reissue the requirements using multiple-award indefinite-delivery, indefinite-quantity contracts awarded in a full and open competition violated the Rule of Two (FAR 19.502-2(b)).

No Factual Roadmap. The only document that purported to show the government’s rationale for cancelling the solicitations was a contracting officer’s memorandum for record asserting that the government would get a more flexible and longer term of performance and save time and money by transitioning the procurements to the MAIDIQ contracts. However, without any supporting factual details, the memorandum’s generalized conclusions failed to provide a meaningful factual roadmap for the government’s decision. In addition, the Rule of Two applied to the government’s identification of the continued need for the requirements, and the government’s failure to apply the Rule of Two prior to deciding to cancel the solicitations was fatal to the decision. Further, the government’s decision to cancel the solicitations and move the scope of work to the MAIDIQ contracts constituted a withdrawal of a set-aside. The withdrawal violated FAR 19.502-9, which permits a CO to “withdraw [a] small business set-aside” only where “the [CO] considers that award would be detrimental to the public interest.”

Authority and Public Interest. Finally, the government also violated 10 USC 2305(b)(2), which provides that “competitive proposals received in response to a solicitation may be rejected if the head of the agency determines that such action is in the public interest.” The record contained no evidence of involvement of the agency head in the cancellation decision or a delegation of authority to the CO to make a cancellation decision, and the government did not conclude that the cancellation of the solicitations was in the “public interest.” The court ordered the government to reinstate the solicitations and, if warranted, issue new cancellation decisions. (Tolliver Group, Inc., et al. v. U.S., FedCl, 64 CCF ¶82,026)

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