United States Government Accountability Office 

Washington, DC 20548 

Comptroller General

of the United States

 

Decision 

Matter of: RN Expertise, Inc. 

File: B-401020 

Date: March 27, 2009 

Rosemary H. Hayes, Esq., Hayes & Caraballo, PL, for the protester. 

Robert J. McMullen, Esq., Naval Supply Systems Command, for the agency. 

Edward Goldstein, Esq., and Christine S. Melody, Esq., Office of the General 

Counsel, GAO, participated in the preparation of the decision. 

DIGEST 

Agency’s decision to cancel solicitation and obtain its requirements through an 

interagency agreement is not objectionable where it is based on reasonable 

conclusion that utilizing the interagency agreement would result in substantial cost 

savings as compared with an award under the canceled solicitation. 

DECISION 

RN Expertise, Inc. of Altamonte Springs, Florida protests a decision by the 

Department of the Navy, Naval Supply Systems Command to cancel request for 

proposals (RFP) No. N00189-08-R-Z071, for worldwide urine collection services for 

drug testing. 

We deny the protest. 

On October 6, 2008, the Navy issued the RFP anticipating the award of a 1-year 

contract, plus four 1-year options for the collection of urine specimens from Navy 

civilians in order to conduct testing for illegal drugs. The RFP required offerors to 

submit proposals with fixed prices (based upon estimated quantities) for collections 

associated with four categories of contract line items: (1) collections for positions 

located in the continental United States (CONUS); (2) collections for positions 

outside CONUS (OCONUS); (3) collections for pre-employment purposes; and 

(4) collections for reasonable suspicion of drug use. According to the RFP, the Navy 

estimated that a total of 47,000 collections would be required during the first 

12 months of performance as follows: CONUS (40,580); OCONUS (400); 

pre-employment (6,000); and reasonable suspicion of drug use (20). Award was to 

be made to the offeror submitting the proposal determined to represent to the best 
value to the government considering four technical evaluation factors (corporate 

experience, past performance, management approach, and socio-economic plan) and 

price, with the technical factors considered to be more important than price. RFP at 

57. 

The Navy received four proposals by the RFP’s November 12 closing date (including 

a proposal from RN Expertise). Based on the agency’s evaluation of the offerors’ 

proposals, the proposal submitted by RN Expertise was identified as representing 

the best value to the government with a total price of $15,237,862. 

The Navy explains that, after selecting RN Expertise’s proposal but before making 

award, it requested funding from the Department of the Navy, Drug Program 

Management, Office of Civilian Human Resources, which, in turn, sought funding 

from the Department of Defense (DOD). Agency Report (AR) at 3. As reflected in 

the record, DOD informed the Navy that the contemplated award to RN Expertise 

was too expensive and advised the Navy to take advantage of lower pricing under an 

interagency agreement between DOD and the Department of the Interior (DOI), 

which provides for obtaining urine collection services for drug testing purposes 

through a contract held by DOI. AR, Tab 9, Dec. 15, 2008 e-mail from Navy Drug 

Program Coordinator; AR, Tab 2, Interagency Agreement at 1. After reviewing the 

terms of the interagency agreement, the Navy determined that, even without taking 

into account programmatic efficiencies, utilizing the interagency agreement would 

result in a savings of $592,910.40 in the base year alone, as compared with award to 

RN Expertise. Based on this cost savings, the Navy decided to cancel the 

solicitation. 

Upon learning that the solicitation had been canceled, RN Expertise filed an 

agency-level protest challenging the agency’s cancellation decision. The Navy 

denied the protest and RN Expertise then filed its protest of the cancellation with 

our Office. 

With regard to competitive negotiated acquisitions, Federal Acquisition Regulation 

(FAR) § 15.305(b) provides that “[t]he source selection authority may reject all 

proposals received in response to a solicitation, if doing so is in the best interest of 

the Government.” We have consistently held that an agency has broad authority to 

decide whether to cancel a solicitation issued under competitive negotiated 

procedures, and to do so need only establish a reasonable basis. We have recognized 

that the potential for cost savings provides a reasonable basis for cancellation. 

Business Commc’ns Sys., Inc., B-218619, July 29, 1985, 85-2 CPD ¶ 103 at 3. If a 

reasonable basis exists to cancel a solicitation, an agency may cancel the solicitation 

regardless of when the information first surfaces or should have been known, even if 

the solicitation is not canceled until after proposals have been submitted and 

evaluated, or even if discovered during the course of a protest. SEI Group, Inc., 

B-299108, Feb. 6, 2007, 2007 CPD ¶ 35 at 3; VSE Corp., B-290452.2, Apr. 11, 2005, 2005 

CPD ¶ 111 at 6. 

Page 2 B-401020 
RN Expertise argues that: (1) acquiring the services under the interagency 

agreement is actually more expensive than under a contract awarded to RN 

Expertise under the canceled RFP; (2) the services called for under the RFP are 

outside the scope of the contract to be used to obtain the services pursuant to the 

interagency agreement, thereby rendering the contemplated orders non-competitive 

and contrary to law; (3) the agency failed to consider “best value” as provided in the 

canceled solicitation when it decided to utilize the interagency agreement; and 

(4) use of the interagency agreement is improper because the Navy has not complied 

with necessary policies and procedures to have its collection requirements met 

under the interagency agreement, including the requirements established under the 

Economy Act, 31 U.S.C. § 1535 (2006) and FAR subpart 17.5. We find the protester’s 

challenges to be without merit. 

 

As an initial matter, there is nothing in the record to suggest that utilizing the 

interagency agreement will be more expensive than award to RN Expertise under the 

canceled solicitation. The agreement expressly provides for charging DOD agencies 

two fixed rates, a rate for CONUS collections and a separate rate for OCONUS 

collections.1 These rates, when multiplied by the estimated number of tests 

identified in the solicitation, support the cost savings identified by the agency. The 

protester’s challenge to the cost savings is based not on these fixed rates, but on a 

calculated composite collection rate which the protester derives from prices of 

actual orders issued pursuant to the agreement. This composite rate, however, is 

based in part on orders for other than collection services. As a consequence, the 

protester’s arguments in this regard do not cast reasonable doubt on the agency’s 

findings. 

Regarding the additional challenges raised by the protester, they are unsupported or 

irrelevant. Specifically, the protester fails to provide any explanation of its allegation 

that the Navy’s requirements are outside the scope of the DOI contract to be used in 

connection with the interagency agreement.2

 To the contrary, while the statements 

of work for the solicitation and the DOI contract may not be identical, they are in 

fact similar in material respects. Absent any concerns regarding material differences 

between the scope of the solicitation and the DOI contract, we see no basis to 

conclude that the agency acted unreasonably in finding that “[t]he required services 

 

1

 Unlike the canceled solicitation, the agreement does not make any distinction with 

respect to pricing for collections associated with “pre-employment testing” or 

“reasonable suspicion testing.” 

2

 In its comments the protester asserts that using the interagency agreement 

impermissibly increases the dollar value of the DOI contract by $2,125,065. 

Protester’s Comments at 6. This assertion is unexplained and appears to be 

misplaced since the DOI contract is a requirements-type contract and the contract 

does not appear to state a maximum dollar value or include a specific ordering limit. 

Page 3 B-401020 
under both vehicles are the same or equal.” AR, Tab 16, Declaration of Navy Drug 

Program Coordinator. 

In addition, the protester’s “best value” concern and its challenge to the legality of 

the interagency agreement are misplaced. Regarding the “best value” issue, the 

protester suggests that it was improper for the agency to consider solely cost savings 

in deciding to cancel the solicitation since the solicitation established the agency’s 

intent to obtain the “best value” through a price/technical tradeoff process, with 

technical factors being more important than price. This argument is misplaced 

because, as noted above, an agency need only have a reasonable basis to cancel a 

solicitation, and the reasonable possibility of achieving cost savings provides such a 

basis. Because the “best value” issue relates to the intended award under the 

canceled solicitation and the protester has failed to explain how the award 

provisions of the canceled solicitation are relevant to our consideration of the 

reasonableness of the agency’s cost savings findings and cancellation decision, we 

have no basis to question the agency’s decision to cancel the RFP. 

Finally, the protester’s concerns regarding the Navy’s failure to comply with certain 

administrative procedures, including those established by the Economy Act and the 

FAR, are misplaced since the procedures and policies identified concern internal 

administrative matters for the agency,3

 or they concern the Navy’s compliance with 

requirements associated with ordering under the agreement.4 As a consequence, 

 

3

 By way of example, in support of its assertion that the Navy’s utilization of the 

interagency agreement is improper, the protester cites, without elaboration, internal 

agency guidance regarding required approvals for “centrally managed contracts or 

agreements” as specified in the Navy’s Human Resources Manual regarding its DrugFree Workplace Program. Protester’s Comments at 6. Such internal guidance is not 

mandatory and does not support a basis of protest. Modern Techs. Corp. et al., 

B-278695 et al., Mar. 4, 1998, 98-1 CPD ¶ 81 at 15. 

4

 In this regard, the protester notes that the Navy did not prepare determinations and 

findings establishing that: (1) use of the interagency acquisition is in the best 

interest of the government; and (2) the services or supplies cannot be obtained as 

conveniently or economically by contracting directly with a private source, as 

required by law and regulation. See 31 U.S.C. § 1535; FAR § 17.503. Any such failure 

is not material, however, since the findings only need to be made before placing 

orders under the agreement. Id. They are not a prerequisite to cancellation of the 

solicitation.

Page 4 B-401020 
Page 5 B-401020 

they do not involve the propriety of the cancellation decision and do not provide a 

basis to challenge the reasonableness of the Navy’s actions. 

The protest is denied. 

Gary L. Kepplinger 

General Counsel