In CAN Softtech Inc. v. United States, U.S. Court of Federal Claims, No. 24-1009C, July 29, 2025, CAN Softtech Inc. (CSI) protested the General Services Administration’s decision to cancel its award for IT support services for the Air Force, alleging that the agency’s corrective action—terminating the award and re-soliciting the requirement—lacked a rational basis. The court partially agreed, finding that while the initial reevaluation decision was reasonable, the later cancellation and resolicitation were arbitrary and unsupported. This case offers a strong reminder that agencies cannot simply invoke vague “ambiguities” to justify wiping the slate clean.
The Decision
The COFC sustained the protest in part, ruling that:
- Initial Corrective Action Was Justified: GSA had a rational basis to reevaluate proposals after receiving a detailed protest at GAO from a competitor. The agency was within its discretion to address potential evaluation missteps through reevaluation alone.
- Cancellation and Resolicitation Were Arbitrary: However, when GSA later chose to cancel CSI’s award and start over, it failed to adequately explain why. The Court found that the agency’s Determination & Findings memorandum cited “outdated PWS requirements” and “ambiguities,” but offered no coherent explanation of what exactly was outdated or ambiguous, or how revisions would remedy the issue.
- Post-Hoc Justifications Did Not Save the Day: The Department of Justice tried to explain the agency’s reasoning during litigation, but the Court rejected these after-the-fact rationales, holding that agencies must explain their decisions in the record, not invent them later.
- Remand Without Vacatur Ordered: Rather than enjoining GSA or forcing award to CSI, the Court ordered a remand so the agency could provide a clear and rational explanation for its decision.
Key Takeaways for Contractors
- Not All Corrective Action Is Created Equal: Agencies have broad discretion to fix procurement problems, but only if they explain themselves. If the record lacks clarity, a protest can prevail.
- Vague References to “Ambiguities” Are Not Enough: If the agency cancels an award based on supposed solicitation flaws, it must identify them clearly and connect them to its decision.
- Post-Hoc Arguments Will Not Rescue a Bad Record: Courts will not accept justifications raised for the first time in litigation. Contractors should focus protests on what’s actually documented.
- Awardees Can Challenge Overbroad Fixes: If you’re a winning contractor and the agency cancels your award during corrective action, you may have a viable protest if the cancellation lacks a rational basis.
- This Is a Playbook Case: CSI’s challenge offers a model for future awardees: Challenge vague cancellation rationales, demand specificity and document the impact.
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