BNUMBER:  B-275740
DATE:  March 19, 1997
TITLE:  SAF Engineering Associates, Inc.

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Matter of:SAF Engineering Associates, Inc.

File:     B-275740

Date:March 19, 1997

James E. Pinkowski, Esq., Pinkowski and Flanders, for the protester.
George N. Brezna, Esq., and Diane D. Hayden, Esq., Department of the 
Navy, for the agency.
Sylvia Schatz, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Low bid was not unbalanced where there is no evidence that bid 
contained understated or enhanced prices.

DECISION

SAF Engineering Associates, Inc. protests the award of a contract to 
Advance Environmental Services under invitation for bids (IFB) No. 
N62472-96-B-4193, issued by the Department of the Navy, as a small 
business set-aside, for maintenance cleaning of ductwork, vents, 
diffusers and registers at the Naval Inventory Control Point in 
Mechanicsburg, Pennsylvania.  SAF primarily argues that Advance's bid 
should have been rejected as materially unbalanced.

We deny the protest.

The IFB, which contemplated the award of an indefinite quantity, 
indefinite delivery contract for a base year, with four 1-year 
options, required bidders to insert a unit and extended price for each 
of 10 contract line items (CLIN) and a total price for all line items.  
The first nine items--CLINs 0001AA-0001AI--were for cleaning various 
estimated quantities and lengths of ducts, and the last item--CLIN 
0001AJ--was for cleaning an estimated quantity of 93 air handlers.  
The Navy received eight bids ranging from Advance's low bid of 
$344,128.75 to a high bid of $2,875,420.  SAF's bid of $529,195.15 was 
second low.  In response to a request from the contracting officer 
concerning whether Advance (the incumbent) understood what was 
involved in performing the required work, Advance reviewed its bid and 
verified its price.  The agency thus made award to Advance.  

SAF argues that Advance's bid was impermissibly unbalanced because it 
offered below-cost unit prices for CLINs 0001AA-0001AI and an 
overstated unit price of $250--compared to SAF's ($90) and another 
bidder's ($80) prices--for CLIN 0001AJ.    SAF concludes that 
Advance's bid should have been rejected as nonresponsive.

Before a bid can be rejected as unbalanced, it must be found to be 
both mathematically and materially unbalanced.  Oregon Iron Works, 
Inc., B-247845, May 27, 1992, 92-1 CPD  para.  474.  A bid is mathematically 
unbalanced where it is based on nominal prices for some items and 
enhanced prices for others.  OMSERV Corp., B-237691, Mar. 13, 1990, 
90-1 CPD  para.  271.  A mathematically unbalanced bid is materially 
unbalanced, and must be rejected, where the unbalancing is such that 
there is a reasonable doubt that the bid will result in the lowest 
overall cost to the government.  Hewitt, Olson Capital Recovery Group, 
Inc., B-261856, Nov. 7, 1995, 95-2 CPD  para.  210.  

Advance's bid was not mathematically unbalanced.  First, there is no 
evidence supporting SAF's claim that Advance's prices for CLINs 0001AA 
through 0001AI were understated--the Navy reports that Advance's 
prices for these CLINS are exactly the same as Advance's prices under 
its current contract, under which the firm has successfully performed 
this work.  Further, there is no evidence that Advance's $250 price 
for CLIN 0001AJ was overstated--the nine bids for this CLIN ranged 
from $80 to $750, with seven of the prices higher than Advance's, and 
the average price at $393.69.  The mere fact that SAF's and another 
offeror's prices were lower than Advance's does not establish price 
enhancement.  See Hughes & Smith, Inc., B-250770, Jan. 22, 1993, 93-1 
CPD  para.  60.  Since Advance's bid was not mathematically unbalanced, it 
could not be rejected as materially unbalanced.  

SAF argues that since the IFB stated that "the contract minimum 
quantity is a total of $75,000," Advance's base year price of 
$68,825.75 rendered its bid nonresponsive. 
This argument is without merit.  A minimum quantity provision serves 
to establish the contractor's and government's minimum obligations 
under the contract, that is, it establishes the minimum quantity the 
contractor is required to furnish and the government is required to 
order.  See Federal Acquisition Regulation (FAR)  sec.  16.504.  A minimum 
quantity provision in no way precludes bidders from offering unit 
prices for estimated quantities that when extended and totaled come 
out to be below the minimum order amount specified in the IFB; no 
matter the price, the government will be required to order, and the 
bidder to provide, the minimum specified.  In other words, upon 
acceptance of Advance's bid, the Navy was obligated to order, and 
Advance to provide, at least $75,000 of services under the contract 
(since the contract is for an indefinite quantity, the Navy can order 
more than the estimated quantities under the various CLINs).  
Accordingly, Advance's low price did not provide a basis for rejecting 
its bid.[1]

SAF contends that Advance, as the incumbent, had an unfair competitive 
advantage under the IFB because it was in a position to know which 
items the agency was likely to order under the contract.  The 
government has no obligation to equalize a competitive advantage a 
firm may enjoy by virtue of its incumbency or its performance under a 
prior government contract, unless the advantage results from a 
preference or unfair action by the contracting agency.  Foley Co., 
B-253408, Sept. 14, 1993, 93-2 CPD  para.  165.  There is no evidence or 
allegation of preference or unfair action by the Navy.

The protest is denied.

Comptroller General
of the United States

1. SAF also argues that the agency told bidders during a pre-bid 
conference that a minimum bid of $75,000 was required for the base 
year of the contract.  Even assuming that SAF is correct, a bidder 
relies on oral explanations of solicitation requirements at its own 
risk.  See Materials Management Group, Inc., B-261523, Sept. 18, 1995, 
95-2 CPD  para.  140.  Since, as indicated, the solicitation did not require 
minimum bids, the agency's alleged oral advice had no effect.  Id.