BNUMBER: B-276416
DATE: June 10, 1997
TITLE: Wright Tool Company, B-276416, June 10, 1997
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Matter of:Wright Tool Company
File: B-276416
Date:June 10, 1997
Sam Zalman Gdanski, Esq., for the protester.
Joshua A. Kranzberg, Esq., and Arthur M. Boley, Esq., Department of
the Army, for the agency.
Katherine I. Riback, Esq., Office of the General Counsel, GAO,
participated in the preparation of the decision.
DIGEST
Protest that low priced proposal should be rejected as unbalanced is
dismissed where proposal is low for both items being procured under a
solicitation which provides for separate awards by item, in which
circumstances there is no possibility of material unbalancing.
DECISION
Wright Tool Company protests the award of a contract to SPX
Corporation under request for proposals (RFP) No. DAAE07-95-R-A607,
issued by the Department of the Army. Wright argues that SPX's
proposal should have been rejected as unbalanced.
We dismiss the protest.
The RFP, issued on February 15, 1996, contemplated the award of a
fixed-price contract for fixed quantities of two different service
tool kits. The solicitation, which provided that award would be made
on the basis of the low priced, technically acceptable offer, required
offerors to submit separate prices for each of the tool kits that they
intended to offer, and contained a provision which allowed for
separate awards for each tool kit. Contract line item (CLIN) 0001 was
for 661 of the organizational support (OS) tool kits, consisting of 28
tools, and CLIN 0002 was for a 100-percent option for the OS tool kit.
CLIN 0003 was for 75 of the General Support (GS) tool kits, consisting
of 98 tools, and CLIN 0004 was a 100-percent option for the GS tool
kit. The solicitation also notified offerors that the procurement was
limited to kits consisting of tools specifically identified in the
technical data package and that contractors proposing to submit
alternate tools were required to submit technical data and/or samples
for evaluation prior to the solicitation closing date.
The solicitation was amended several times to allow offerors
additional opportunities to submit alternate tools, and to add
previously approved tools to the lists of tools in the technical data
package (TDP), and to extend the closing date to June 24. During this
time, Wright submitted a run flat tool for approval and provided a
list of 28 GSA-approved parts on which they intended to base their
proposal for the OS tool kit. After testing, Wright's run flat tool
was approved, and 24 of the 28 parts plus the run flat tool were added
to the RFP by amendment No. 5.
Six contractors submitted offers on the OS tool kit and four submitted
offers on both the OS and GS tool kits. SPX submitted offers for both
tool kits and Wright submitted an offer for only the OS tool kit. The
agency evaluated the initial proposals, held discussions, and
requested best and final offers (BAFO) by December 5. The agency
received four BAFOs. Wright's BAFO included an offer for both the OS
tool kit and the GS tool kit. Wright's BAFO for the GS tool kit was
conditioned on being able to purchase at a reasonable price several
tools for which SPX was the only approved source. The agency found
that Wright's conditional offer for the GS tool kit was
unacceptable.[1] The BAFOs were evaluated as follows:
Offeror OS Kit (CLIN
0001) OS Kit 100% Option (CLIN 0002)GS Kit (CLIN
0003) GS Kit 100% Option
(CLIN 0004)
SPX $874 $854 $8,400 $8,235
Wright
$997 $1,047
Offeror A $1,189 $1,189
Offeror B $1,890 $1,890 $9,100 $9,100
The agency determined that SPX had submitted the lowest technically
acceptable offer for both tool kits and made award to that company.
This protest followed.
Wright contends that SPX's offer should have been rejected as
"unbalanced." Wright alleges that SPX "significantly underbid" the OS
tool kit, and is charging a "higher" amount for the GS tool kit, with
the proceeds from the GS tool kit "subsidizing the absence of profits"
in the low price for the OS tool kits. Wright bases its argument that
the OS tool kits offered by SPX were underpriced on the fact that more
than 2 years ago the government awarded SPX a contract for the same OS
tool kits in which the government paid approximately $200 more for
each OS tool kit.
Before a proposal can be rejected as unbalanced, it must be found both
mathematically and materially unbalanced. A proposal is
mathematically unbalanced where it is based on nominal prices for some
of the items and enhanced prices for other items. Where there is
reasonable doubt that acceptance of a mathematically unbalanced bid
will result in the lowest overall cost to the government, the bid is
materially unbalanced and cannot be accepted. OMSERV Corp., B-237691,
Mar. 13, 1990, 90-1 CPD para. 271 at 2.
The concept of unbalancing is simply inapplicable here because the
solicitation provided for separate awards for each tool kit. The
possibility that a particular bid or proposal is unbalanced between
line items arise where the solicitation provides for a combined award
of separate line items, and it is alleged that certain line items are
underpriced and others are inflated. Only in this scenario, and where
there are estimated quantities of dubious reliability, does the
possibility that the government may not actually obtain the low
evaluated cost arise. Here, the awardee submitted the low price offer
for fixed quantities of all of the line items, (which could have been
awarded separately if different offerors were low for different line
items) and it is clear that the award will result in low cost to the
government in any circumstance.
Wright's challenge is more accurately characterized as an allegation
that the agency accepted a below-cost offer. However, there is no
prohibition against a procuring agency's accepting a low or below-cost
offer on a fixed-priced contract. Akal Sec., Inc., B-261996, Nov. 16,
1995, 96-1 CPD para. 33 at 5. By awarding a fixed-price contract to such
an offeror, the contracting agency has necessarily determined that the
offeror is responsible, a determination which our Office will not
review absent a showing of possible bad faith or misapplication of
definitive responsibility criteria, neither of which is present here.
Intown Properties, Inc., B-256742, July 11, 1994, 94-2 CPD para. 18 at
4.[2] Accordingly, Wright has failed to state a valid basis for
protest.
The protest is dismissed.
Comptroller General
of the United States
1. Wright has not protested the agency's determination that Wright's
offer to provide the GS tool kits was technically unacceptable.
2. To the extent that Wright argues that the extended closing dates
that were laid out in the amendments did not provide enough time to
permit the evaluation of additional alternate tools, this argument is
untimely. Alleged improprieties which do not exist in the initial
solicitation which are subsequently incorporated into the solicitation
must be protested not later than the next closing time for receipt of
proposal following the incorporation. 4 C.F.R. sec. 21.2(a)(1) (1997).
In any event, we note that the solicitation provided ample time for
offerors to submit alternate tools for evaluation. As stated above,
the solicitation was issued on February 15, with an original closing
date of March 18, which was extended by amendment June 24. The
solicitation gave offerors a total of 130 days to submit alternate
tools for evaluation.