BNUMBER:  B-270162
DATE:  February 1, 1996
TITLE:  Applicators, Inc.

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Matter of:Applicators, Inc.

File:     B-270162

Date:     February 1, 1996

Joseph H. Kasimer, Esq., Kasimer & Ittig, for the protester.
Christopher M. Kerns for Fort Myer Construction Corporation, the 
intervenor.
Gregory H. Petkoff, Esq., and Jean M. Redzikowski, Esq., Department of 
the Air Force, for the agency.
Henry J. Gorczycki, Esq., and Guy R. Pietrovito, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the 
decision., for the protester.

DIGEST

Award to bidder submitting the lowest base bid is proper, even though 
that bid is not the lowest aggregate bid inclusive of an additive 
item, where the available funds are sufficient to cover only the base 
bid.

DECISION

Applicators, Inc. protests the award of a contract to Fort Myer 
Construction Corporation under invitation for bids (IFB) No. 
FA4416-95-B-A063, issued by the Department of the Air Force for the 
construction of a parking lot and drainage for Hangar 11 at Andrews 
Air Force Base, Maryland.

We deny the protest.

The IFB bid schedule, as amended, sought bid prices for contract line 
items numbers (CLIN) 0001 and 0002--identified as the base bid for the 
construction of the parking lot--and for CLINs 0003AA, 0003AB, and 
0004--which together are identified as an additive item for 
construction of drainage.  The IFB incorporated by reference the 
provision at Defense Federal Acquisition Regulation Supplement (DFARS)  sec.  
252.236-7007, "Additive or Deductive Items (Dec 1991)," which states 
in pertinent part:

     "(a) The low offeror and the items to be awarded shall be 
     determined as follows--

        (1) Prior to the opening of bids, the Government will 
        determine the amount of funds available for the project.

        (2) The low offeror shall be the [o]fferor that--

          (i) Is otherwise eligible for award; and

          (ii) Offers the lowest aggregate amount for the first or 
          base bid item, plus or minus (in the order stated in the 
          list of priorities in the bid schedule) those additive or 
          deductive items that provide the most features within the 
          funds determined available.

        (3) The [c]ontracting [o]fficer shall evaluate all bids on the 
        basis     of the same additive or deductive items.

          (i) If adding another item from the bid schedule list of 
          priorities would make the award exceed the available funds 
          for all offerors, the [c]ontracting [o]fficer will skip that 
          item and go to the next item from the bid schedule of 
          priorities; and

          (ii) Add that next item if an award may be made that 
          includes that item and is within the available funds."

Funding in the amount of $658,000 was budgeted for the entire project.

Bids were received from five bidders.  Fort Myer submitted the lowest 
base bid of $644,170, while Applicators's base bid of $722,840 was 
next lowest.  Considering the additive item, Applicators submitted the 
lowest aggregate bid of $1,247,089; Fort Myer's aggregate bid of 
$1,258,320 was next lowest.  The Air Force advised Applicators at bid 
opening that it was the apparent low bidder based on the aggregate bid 
prices.

Upon subsequent review, the Air Force determined that all of the 
aggregate bid prices exceeded the budgeted funding amount of $658,000.  
Since funding available for the procurement was insufficient to cover 
both the base bid and additive item, the Air Force determined that 
award would be made only for the base bid.  As noted above, Fort Myer 
submitted the low base bid.

Prior to award but subsequent to bid opening, the Air Force learned 
that additional funds were available for the procurement which 
increased the funding available to $1,168,470.  The Air Force 
determined that the increased funding was still insufficient to allow 
award of the entire additive item; however, the agency determined that 
a portion of the additive item (CLIN 0003AA) could be awarded within 
the funding amount.  Considering the bidder's prices for CLIN 0003AA, 
Fort Myer's bid of $926,170 remained low, while Applicators's bid of 
$1,007,506 was second low.  The Air Force awarded a contract for the 
base bid and CLIN 0003AA to Fort Myer.  This protest followed.

Applicators argues that the agency did not determine the amount of 
funds available for the project prior to bid opening, as required by 
DFARS  sec.  252.236-7007, and that the agency improperly split the 
additive item after bid opening.  Applicators contends that it should 
have received the award upon the basis of its low aggregate bid price.

In response to the protest, the Air Force agrees that it incorrectly 
split the bid's additive item.  The Air Force has informed us that it 
will terminate the work associated with CLIN 0003AA from the contract 
to Fort Myer and resolicit for the drainage work.  Applicators has not 
protested this action; thus, the remaining issue for our review is 
whether the agency's award selection should have been based on the 
base bids only or the aggregate bids inclusive of the entire additive 
item.

The IFB provided that the low bidder would be determined using the 
available funding amount as the upper limit for determining whether a 
bid price may be qualified for award; specifically, the low bid is the 
lowest aggregate bid price that includes the base bid and only those 
additive items that can be added to the base bid and still be within 
the funding limitation.  DFARS  sec.  252.236-7007(a); J.C.N. Constr. Co., 
Inc., B-250815, Feb. 23, 1993, 93-1 CPD  para.  166; see Utley-James, Inc., 
B-198406, June 16, 1980, 80-1 CPD  para. 417 (base bid excluding all 
additive items is the  basis for determining low bid where all bids 
exceed available funding).  Here, all bids inclusive of the additive 
item exceed the available funding.  The additive item thus cannot be 
used to determine the low bid.  Since Fort Myer's base bid, which was 
below the funding limit, was the lowest base bid submitted, Fort Myer 
was the low bidder and the award on that basis is proper.  See J.C.N. 
Constr. Co., Inc., supra.

In response to the protester's allegation that the funding limit was 
not determined prior to bid opening, the agency provided 
contemporaneous documentation from the contract file showing that the 
amount of $658,000 was budgeted prior to the issuance of the IFB.  The 
protester received a copy of this document and has not challenged it.  
The record thus shows that the Air Force properly determined the 
amount of funding available for this project prior to bid opening 
consistent with the terms of the provision at DFARS  sec.  
252.236-7007(a)(1).  See Gartrell Constr., Inc., U.S. Floors, Inc., 
B-237032; B-237032.2, Jan. 11, 1990, 90-1 CPD  para.  46; Sammy Garrison 
Constr. Co., Inc., B-215453, Nov. 21, 1984, 84-2 CPD  para.  545.

The protest is denied.

Comptroller General
of the United States