United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

 

Decision

Matter of: United Contracting LLC 

File: B-407417

Date: January 2, 2013

Frank V. Reilly, Esq., for the protester.

Natica Chapman Neely, Esq., Department of Veterans Affairs, for the agency.

Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the General 

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

DIGEST

Agency had a compelling reason to cancel an invitation for bids (IFB) for roofing 

services after bid opening where the agency reasonably found that the IFB failed to 

provide sufficient information to allow bidders to accurately bid. 

DECISION

United Contracting LLC, of Pike Road, Alabama, protests the cancellation of 

invitation for bids (IFB) No. VA247-12-B-0375, issued by the Department of 

Veterans Affairs (VA), for replacing roofs. 

We deny the protest.

The IFB, issued on May 18, 2012, as a total service-disabled veteran-owned small 

business (SDVOSB) set-aside, sought bids to replace the roofs on buildings 2 and 4 

at the east campus of the Central Alabama Veterans Health Care System, 

Tuskegee, Alabama. The IFB contained two bid items: (1) “BID ITEM NO. 1” for all 

the work to replace the roofs on both buildings, and provide a 20-year bituminous 

roof warranty; and (2) “DEDUCTIVE BID ALTERNATIVE #1” to delete the work for 

one of the buildings (building 2) and provide a 15-year bituminous roof warranty, 

instead of a 20-year warranty. IFB at 1. 

In addition, amendment No. 0003, added “ADDENDUM ITEM UNIT PRICING,” 

which stated as a follows:

Contractor to provide unit pricing for rotten, deteriorated or damaged 

existing wood components needed and not specified. The price shall 
Page 2 B-407417 

be per board foot of furnished and installed items. Provide evidence 

and quantities to the VA. 

RFP amend. 3, at 1.

Five bids were received in response to the IFB by the June 18 bid opening. One 

bidder was determined to be ineligible for award because it was not an SDVOSB. 

The remaining bids ranged from $85,000 to $499,000 for BID ITEM NO. 1; $19,000 

to $175,000 for DEDUCTIVE BID ALTERNATIVE #1; and $4.50 per unit to $50 per 

unit for the ADDENDUM ITEM UNIT PRICING. Agency Report (AR) at 2.

On July 12, the contracting officer cancelled the IFB pursuant to Federal Acquisition 

Regulation (FAR) § 14.404-1(c)(4). The contracting officer determined, based on 

the significant variance in prices, that bidders may not have comprehended the VA’s 

requirements because ADDENDUM ITEM UNIT PRICING in amendment 3 failed to 

include a specific estimate of the deteriorated or damaged wood components in 

need of repair, or a basis for evaluating the costs for this work. Specifically, the 

contracting officer decided to issue a new solicitation to provide: a detailed 

statement of work; revised specifications; the estimated square footage of rotten, 

deteriorated, or damaged existing wood; the estimated quantities of components 

needed; and, a formula by which the bidder would be able to accurately bid on the 

work required. AR, exh. 4, Determination and Findings, at 3.

Because of the potential adverse impact on the competitive bidding system of 

cancellation after bid prices have been exposed, a contracting officer must have a 

compelling reason to cancel an IFB after bid opening. FAR § 14.404-1(a)(1). The 

contracting officer has the discretion to determine whether the necessary 

circumstances exist for canceling a solicitation, and we will review the decision to 

ensure that it was reasonable. Dynamic Corp., B-296366, June 29, 2005, 

2005 CPD ¶ 125 at 4. As a general rule, the need to change inadequate or 

ambiguous specifications and to revise them, after the opening of bids, to express 

properly the agency’s minimum needs constitutes such a compelling reason. See

FAR § 14.404-1(c)(1), (2); G.H. Harlow Co., Inc., B-245050 et al., Nov. 20, 1991, 

91-2 CPD ¶ 484 at 3. In addition, FAR § 14.404-1(c)(4) provides that a compelling 

basis to cancel exists if the IFB does not provide for consideration of all factors of 

cost to the government. 

Here, we find the contracting officer’s determination to cancel the solicitation 

reasonable because certain material matters related to the specifications and cost 

to the government were not included in the invitation. As noted by the contracting 

officer, the record evidences a wide disparity in bid prices, and we find that without 

a more accurate formula for pricing the work, the agency could not accurately 

compare the bidder’s prices against each other, or otherwise determine which bid 

reflected the lowest price to the government. Thus, any award under the IFB would 
Page 3 B-407417 

be prejudicial to the remaining bidders and the government. See Dynamic Corp., 

supra. Although, the protester raises several arguments as to why the cancellation 

is improper, it has not shown that the agency was not reasonably within its 

discretion to cancel the IFB. 

The protest is denied.

Susan A. Poling

General Counsel