Kevin J. Cosgrove, Willcox Savage
Most contractors have been in this position. You spend precious time, energy, and money preparing a proposal in response to a solicitation. You feel confident that you have a decent chance to be awarded the contract. Then you receive a notice that the Government has cancelled the solicitation. You are angry and frustrated. What, if anything, can be done? The recent case of Rockwell Collins Inc. v. United States, No. 23-1800, 2024 U.S. Claims LEXIS 139 (Fed. Cl. Feb. 12, 2024), sheds light on this issue.
Case Facts
This case was relatively straightforward. The Air Force issued a Request for Proposal to update its fleet of KC-135 aircraft. The KC-135 is designed to provide mid-air refueling services to other Air Force airplanes. Rockwell Collins (RC) submitted a proposal but also filed a pre award protest. The protest alleged that the RFP's use of Fixed-Price Incentive Fee Contract Line Items was improper, and the proposed liquidated damages provision was unlawful. In response the government filed a notice of corrective action. That notice stated the Air Force intended to cancel the solicitation, "reassess its needs and requirements ... and explore further all possible commercial solutions." Importantly, the notice stated that it was relying upon FAR 15.206(e) for authority to cancel the solicitation.
RC filed a lawsuit in the United States Court of Federal Claims ('COFC') challenging the cancellation decision. The basis for the lawsuit was that the Air Forces' cancellation decision
"lacked a reasonable justification." After briefs were filed and arguments were held, the Court agreed with RC.
The Government's Reasons For Cancellation Matter
Recall that the government relied upon FAR 15 .206( e) to justify the cancellation. That regulation states that if "an amendment proposed for issuance after offers have been received is so substantial to exceed what prospective offerors reasonably could have anticipated ... the [CO] shall cancel the original solicitation and issue a new one ... "
So in order to rely upon FAR 15.206(e) for cancelling a solicitation, the contracting officer is required to identify a proposed amendment that would trigger the cancellation mandate. But there was no specific amendment proposed at all in the Notice of Cancellation. Absent that failure the cancellation was unlawful. The Court ordered that the solicitation be re-instated.
There Are Other Ways to Cancel a Solicitation
The government almost always has the right to cancel a solicitation and/or reject all proposals "if doing so is in the best interest of the Government," FAR 15.305(b). This has been described as an "extraordinarily pennissive standard that requires nothing more than a reasonable basis for the cancellation decision." Madison Services, Inc. v. United States, 92 Fed. Cl. 120, 126 (Fed. Cl. 2010). But the key to remember is that judicial review ofa decision is limited to "the grounds the agency invoked when it took one action." Department of Homeland Security v. Regents of the University of Cal., 140 S. Ct. 1891 (2020) (citing Michigan v. EPA, 576 U.S. 743, 758 (2015)). So if the government cites one regulation when it makes a decision, that decision must be justified based on the cited regulation. It does not matter if another, broader regulation might have permitted the decision. As the March Hare counselled Alice at the tea party, "you must say what you mean."
Conclusion
When you receive a cancellation notice for a solicitation, take a few minutes to read it. The government might have got it right. But maybe it did not.
ABOUT THE AUTHOR
Kevin J. Cosgrove is a leading attorney at Willcox Savage, where he heads the Government Contracting group. With over three decades of experience at Hunton Andrews Kurth, Kevin founded and led the government contracting practice in Virginia. His legal expertise encompasses construction litigation, government contracts, maritime matters, and land use advice and litigation, drawing from his background as a former city attorney. Kevin's outstanding litigation skills are highlighted by his experience of over 90 jury trials in state and federal courts, and his ability to navigate mediations and arbitrations in construction and government contracts matters.
Renowned in the legal community, Kevin has been repeatedly named a “Virginia Super Lawyer” in construction litigation and listed in “Best Lawyers in America” for his achievements in the same field. His contributions extend beyond the courtroom through numerous articles and seminars, and he has been featured by Law360 for his analysis on government contracts. Holding a J.D. from Washington and Lee University School of Law and a B.A. from Hofstra University, Kevin's career is distinguished by peer recognition, professional achievement, and a deep commitment to legal excellence.
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