BNUMBER: B-261135.2
DATE: September 1, 1995
TITLE: Bollinger Machine Shop & Shipyard, Inc.
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Matter of: Bollinger Machine Shop & Shipyard, Inc.
File: B-261135.2
Date: September 1, 1995
Marcus B. Slater, Jr., Esq., and Jennifer J. Zeien, Esq., Fort &
Schlefer, for the protester.
Kenneth S. Kramer, Esq., Fried, Frank, Harris, Shriver & Jacobson, and
Paul C. Hill, Esq., for Textron Marine & Land Systems, Inc., and J.
Stephen Lawrence, Jr., Esq., Arnold & Porter, for Peterson Builders,
Inc., interested parties.
Nilza F. Velazquez, Esq., United States Coast Guard, for the agency.
John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. The low bid under an invitation for bids for lifeboats and
associated services and equipment calling for a base quantity and 4
option periods for additional quantities is not materially unbalanced
where there is no credible evidence that the bid contains overstated
prices for the lifeboats such that it could be considered
mathematically unbalanced, and, in any case, the bid becomes low
during the first option period.
2. An agency's acceptance and consideration of a bid modification,
received by a representative of the bidder from a facsimile machine
located in the agency's mail room and then hand-delivered by the
bidder's representative to the cognizant agency contract specialist,
was not precluded by the solicitation's prohibition against facsimile
submissions.
DECISION
Bollinger Machine Shop & Shipyard, Inc. protests the award of a
contract to Textron Marine and Land Systems, Inc., under invitation
for bids (IFB) No. DTCG23-95-B-AMB001, issued by the United States
Coast Guard, Department of Transportation, for motor lifeboats and
associated equipment and services.
We deny the protest.
The IFB, issued on January 27, 1995, provided for the award of a firm,
fixed-price contract for a base quantity of 20 motor lifeboats and
associated equipment and services, with four 365-day option periods to
be exercised consecutively with each allowing for the purchase of up
to 30 lifeboats for a total of up to 120 additional lifeboats.[1]
Bidders were informed that the government would evaluate bids by
adding the total price for all options to the total price for the base
requirement. The IFB contained the standard sealed bidding award
clause, set forth at Federal Acquisition Regulation (FAR) 52.214-10,
that, in pertinent part, cautions that a bid which is materially
unbalanced may be rejected as nonresponsive.
The Coast Guard received five bids by the bid opening date of April
20, ranging from Textron's low bid of $164,275,192, to the high bid of
$230,653,493. The three lowest priced bids are as follows:
Textron Peterson Bollinger
Base Period $26,613,222 $26,870,422 $26,304,170
Option One $33,484,200 $36,389,412 $37,247,149
Option Two $31,888,630 $38,398,600 $38,135,910
Option Three $30,676,470 $39,328,482 $39,031,442
Option Four $41,612,670 $53,757,384 $58,744,381
Total $164,275,192 $194,744,300 $199,463,052
Bollinger protests that the agency should have rejected Textron's low
bid and Peterson's second low bid as nonresponsive.[2] The protester
first contends that Textron's bid should be rejected as unbalanced
because Textron's unit prices for the lifeboats decline significantly
from the base period through each of the option periods, whereas
Bollinger's and Peterson's unit prices for lifeboats are relatively
constant from the base period through each of the option periods.
To be rejected as unbalanced, a bid must be both mathematically and
materially unbalanced. DGS Contract Servs., Inc.; Inventory
Accounting Servs., Inc., B-258429; B-258429.2, Jan. 19, 1995, 95-1 CPD
27. A bid is mathematically unbalanced if it contains understated
prices for some items and overstated prices for other items. Hampton
Roads Leasing, Inc., B-250645.2, Feb. 1, 1993, 93-1 CPD 486. On the
other hand, the submission of a below-cost bid is not illegal, and the
mere fact that a bid includes understated prices does not justify
rejection of the bid. Id.; Wizard-Movers Elite, Inc.; Elkay Transp.,
Inc., B-255753; B-255753.2, Mar. 29, 1994, 94-1 CPD 221.
Accordingly, even a well-founded allegation of understated prices
without evidence of overstated prices does not constitute a legally
adequate basis for finding that a bid is mathematically unbalanced.
Id.
Textron's bid cannot be considered to be mathematically unbalanced
because there is no credible evidence to suggest that any of its
prices for the lifeboats are overstated. In his regard, Textron's
price per lifeboat exceeds Bollinger's only during the base period of
the contract, and differs during this period by only 1 percent.[3]
Further, Textron's total price for the CLINs comprising the base
period of the contract is only 1 percent higher than Bollinger's low
price for the base period CLINs, and from 1 to 12 percent lower than
the bids for the base period CLINs submitted by the other firms
responding to the solicitation. Such a differential simply does not
evidence that Textron's bid contains overstated prices. Hampton Roads
Leasing, Inc., supra.
Even assuming for the sake of argument that Textron's bid was
mathematically unbalanced, the acceptance of its bid would not be
objectionable unless the bid is also materially unbalanced, that is,
unless there is reasonable doubt that the acceptance of Textron's bid
will result in the lowest overall cost to the government. DGS
Contract Servs., Inc., B-245400, Dec. 30, 1991, 92-1 CPD 16. The
analysis of material unbalancing focuses primarily on whether a
mathematically unbalanced bid is so front-loaded that it does not
become low until late in the contract term, including options. Id.
Here, as noted by the agency, Textron's bid becomes low relative to
all of the bids received during the first option period of the
contract, and as such, there is no reasonable doubt that Textron's bid
will result in the lowest overall cost to the government.[4]
Integrated Protection Sys., Inc., B-254457.2; B-254457.3, Jan. 19,
1994, 94-1 CPD 24 (agency's acceptance of a mathematically
unbalanced bid was not objectionable where the bid becomes low during
the first option year of a contract providing for a base and 4-option
years).
Bollinger next argues that the agency improperly accepted Textron's
facsimile modification to Textron's bid. The protester points out
that the IFB incorporated by reference FAR 52.214-5, which states in
pertinent part that "[f]acsimile bids, modifications, or withdrawals
will not be considered unless authorized by the solicitation," and
that the IFB did not authorize facsimile bids, modifications, or
withdrawals.
According to the record, a Textron representative hand-delivered
Textron's bid to the cognizant contract specialist during the morning
of April 20. Shortly before bid opening, Textron transmitted a signed
bid modification to a facsimile machine located in the agency's mail
room for receipt by the same Textron representative who had submitted
Textron's bid. This Textron representative, after his receipt of the
bid modification, sealed the modification in an envelope and
hand-delivered the modification to the cognizant agency contract
specialist. Textron's bid and bid modification were subsequently
opened and read aloud at the bid opening.
Textron's submission of its bid modification on facsimile paper does
not constitute the submission of facsimile bid modification.
International Shelter Sys., Inc., 71 Comp. Gen. 142 (1992), 92-1 CPD
38; Tomahawk Constr. Co., B-243582, Aug. 7, 1991, 91-2 CPD 137. In
this regard, the IFB clause in question prohibits the submission of
bid modifications via facsimile machine directly to the government,
and does not pertain to submission in person of a bid modification
which is printed on facsimile paper, as was the case here. Tomahawk
Constr. Co., supra.
The fact that Textron made arrangements for the use of an agency
facsimile machine for its representative's receipt of the modification
does not alter this result. As stated above, the IFB clause prohibits
the submission of bid modifications by facsimile directly to the
agency. Textron's bid modification was not submitted by facsimile
directly to the agency, but rather, as explained previously, was
transmitted to a Textron representative who then submitted the bid
modification to the agency by hand. As such, we find that the agency
properly accepted and considered Textron's hand-delivered modification
to its bid.
The protest is denied.
/s/ Ronald Berger
for Robert P. Murphy
General Counsel
1. There were variances in the nature of the contract line items
(CLINs) for the base quantity and the four options.
2. Because we find Textron's bid was responsive, we need not consider
Bollinger's protest that Peterson's bid was nonresponsive.
3. Textron's unit price for the base period is $1,068,300 per lifeboat
and Bollinger's is $1,056,988 per lifeboat.
4. There is nothing in the record to suggest that the agency is
unlikely to exercise the options for additional lifeboats and
associated equipment and services.