BNUMBER:  B-276625 
DATE:  July 3, 1997
TITLE: Neals Janitorial Service, B-276625, July 3, 1997
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Matter of:Neals Janitorial Service

File:     B-276625

Date:July 3, 1997

Christopher M. Wawack, Esq., and Joseph A. Camardo, Jr. Esq., for the 
protester.
Bernard J. Roan, Esq., and Thomas W. Berndt, Esq., National 
Aeronautics and Space Administration, for the agency.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of 
the General Counsel, GAO, participated in the preparation of the 
decision.

DIGEST

Agency has compelling reason to cancel solicitation after bid opening 
where the information in the solicitation and ascertainable from the 
site visit was inadequate for bidders to establish the actual work 
load requirements, which resulted in the bidders competing on an 
unequal basis.

DECISION

Neals Janitorial Service protests the cancellation of invitation for 
bids (IFB) No. IFB2-36271(JMS), issued by the National Aeronautics and 
Space Administration (NASA), Ames Research Center, for janitorial, 
refuse collection, grounds  maintenance, and pest control services at 
Moffett Field, California.

We deny the protest.

The IFB, issued on October 18, 1996, contemplated the award of a firm, 
fixed-price contract for 1 year with 4 option years.  The contract 
required both lump-sum, fixed-priced work for recurring services, such 
as regularly scheduled janitorial services, refuse collection, grounds 
maintenance, pest control services, and indefinite quantity work, such 
as those janitorial services or grounds maintenance services which are 
to be ordered as needed (e.g., stripping and rewaxing floors and tree 
pruning).[1]

The IFB requested a single price for all of the fixed-priced recurring 
work for the base year and each option year.  Section E of the IFB 
provided a Schedule of Deductions on which bidders were to provide 
line item prices for each category of fixed-priced work specified in 
the statement of work at section C of the IFB.  The amended IFB stated 
that a bidder's prices on the Schedule of Deductions will constitute 
the itemized unit and extended prices for the fixed-price work in the 
bid schedule, and that the price bid for the fixed-priced work must 
equal the total of all the line item prices in the Schedule of 
Deductions.  The amended IFB also stated that the itemized prices in 
the Schedule of Deductions would be used to evaluate the 
reasonableness of the bid price for fixed-price work, and that:

     "[u]nbalanced, unrealistic prices in the [fixed-priced] work in 
     [the bid schedule], as itemized in the Schedule of Deductions in 
     Section E, or in the [indefinite quantity] work, will be a basis 
     for disqualification of a bidder."

With regard to the recurring janitorial services portion of the 
fixed-priced work, the line items of the Schedule of Deductions 
generally requested monthly unit prices for each category of 
janitorial services based on category and frequency of services to be 
performed.[2]  The specific work requirements to be performed under 
each Schedule of Deductions line item were stated in the separate 
janitorial services checklists attached to the IFB at section J-C8.3.  
These tasks included such things as emptying trash in breakrooms; 
vacuuming or sweeping entrance mats; sweeping, vacuuming or mopping 
offices, labs, computer rooms, and carpeted surfaces; refilling all 
restroom dispensers; cleaning all restroom fixtures; and servicing 
floor drains. 

The IFB also provided information such as floor plans for each 
building to be serviced, the total area of each type of floor 
covering, and estimates of employee, contractor and visitor 
populations; however, the IFB did not provide estimates of the work 
load or other data describing the quantity of work to be performed 
under these requirements.

NASA conducted a pre-bid conference/site visit on November 13.  
Prospective bidders attending the site visit were permitted to view 
only 4 out of a total of 171 buildings to be serviced under the 
contract.  Amendment 2 was issued following the pre-bid 
conference/site visit.  The amendment included a record of questions 
asked by prospective bidders and the corresponding agency answers.  A 
number of questions were asked about the work load for specific work 
requirements under janitorial services.  The agency did not provide 
specific answers for these questions, but generally referred bidders 
to the solicitation.  For example, one question and answer was:

     "36.  How may breakrooms? . . .

     Based on the information provided, taking into account for such 
     things as population, typical use of a facility, and standard 
     planning and statistical guidelines, the Contractor will use its 
     best judgment to determine the number of breakrooms."

Seven bids were received by bid opening on January 7, 1997.  Bids 
ranged from the low bid of $11,314,202 to the high bid of $29,135,350.  
Neals submitted the second low bid of $11,748,108.[3]    

The contracting officer reviewed the bids, which included analyzing 
the line item prices of each bid and the government estimate, and 
requested and obtained a bid verification from the low bidder.  This 
price analysis revealed an extremely wide price disparity among the 
various line item prices and the government estimate for those line 
items, particularly with regard to janitorial services.  Every bid 
contained some line item prices which were significantly above the 
line item prices both in the government estimate and in the other 
bids, as well as line item prices which were significantly below those 
in the government estimate and in other bids.[4]  Based on this 
analysis, the contracting officer suspected that the bidders had not 
prepared their bids on the same basis.

Upon review of the solicitation, the contracting officer determined 
that the IFB did not provide sufficient information for bidders to 
determine work load requirements for the fixed-price under janitorial 
services work.  Information related to the pricing of these services 
which could not be determined from the IFB included:  the number and 
total area of breakrooms, the number of waste baskets, the number and 
sizes of entrance mats, the number of restroom dispensers and 
fixtures, and the number of floor drains.  Moreover, the floor plans 
only partially showed labs, computer rooms, and restrooms, and the 
agency states that the actual number of these rooms is significantly 
greater than is shown on the drawings.[5]  

The contracting officer therefore determined that the IFB contained 
inadequate or ambiguous specifications which prevented bidders from 
preparing their bids on a common basis, and that a compelling reason 
to cancel the IFB existed under Federal Acquisition Regulation (FAR)  sec.  
14.404-1(c)(1).  The agency canceled the IFB and this protest 
followed.

Neals alleges that a compelling reason to cancel the IFB does not 
exist because the information that was included in the IFB, such as 
floor plans, areas of floor surfaces, and population, as well as 
information observed from the site visit, was sufficient for bidders 
to estimate the work load requirements on their own and submit bids on 
a common basis.

An IFB may be canceled after bid opening when there is a compelling 
reason to do so.  FAR  sec.  14.404-1(a).  Inadequate or ambiguous 
specifications included in an IFB may constitute such a compelling 
reason.  FAR  sec.  14.404-1(c)(1).  Contracting officials have broad 
discretion to determine whether or not appropriate circumstances for 
cancellation exist, and our review is limited to considering the 
reasonableness of the exercise of that discretion.  Source AV, Inc., 
B-238017, Mar. 27, 1990, 90-1 CPD  para.  336 at 3.  Although a solicitation 
defect is not in itself a compelling reason to cancel an IFB, Energy 
Maintenance Corp.; Turbine Engine Servs. Corp., 64 Comp. Gen. 425, 427 
(1985), 85-1 CPD  para.  341 at 3, we generally regard cancellation after 
bid opening to be appropriate when an award under the IFB would not 
satisfy the actual minimum needs of the government or when other 
bidders would be prejudiced by such an award.  Source AV, Inc., supra 
at 3.

Here, the contracting officer determined that a compelling reason to 
cancel the IFB after bid opening existed because specifications for 
janitorial services were so inadequate that bidders did not have a 
common basis on which to prepare bids.  It is undisputed that the IFB 
did not provide estimates of a large portion of the work load, 
including the number of breakrooms, waste baskets, restroom dispensers 
and fixtures, floor drains, and the number and size of entrance mats, 
and it is apparent that in order for a bidder to determine its cost 
for cleaning or servicing these items, it must estimate, at least 
roughly, the quantity of these items.  Although the floor plans 
provide some relevant information, such as the layout of each building 
and the types of floor surfaces, they do not show such things as 
breakrooms, restroom fixtures, entrance mats, or other items.   Also, 
the site visit (attended by 6 of the 7 bidders) was limited to just 4 
out of 171 buildings.  Considering the large quantity and variety of 
buildings, this limited site visit did not provide a useful basis for 
estimating the contents of the overwhelming majority of the buildings 
to be serviced.  The substantial variance in line item prices for 
janitorial services between the bids and the government estimate 
(which the protester does not challenge), as well as among the bids, 
supports the agency's conclusion that each bidder used estimates 
significantly different from those used by the government or other 
bidders.[6]  Thus, the record evidences that the lack of specificity 
or clarity in this IFB's work load requirements resulted in bidders 
competing on an unequal basis, such that any award based on this IFB 
may be prejudicial to the remaining bidders and the government; this 
provides the agency with a compelling reason to cancel the IFB.  See 
Source AV, Inc., supra at 3-4; Integrity Management Int'l, Inc., 
B-222405.4, Feb. 26, 1987, 87-1 CPD  para.  220 at 3.  

The protester alleges that the information in the IFB does not need to 
provide work load estimates for the items to be serviced under the 
janitorial services requirement because janitorial service contractors 
should have sufficient expertise to make reasonable assumptions about 
the work load in order to estimate the actual work load requirements.  
However, the protester has neither explained the assumptions upon 
which it relied in preparing its bid nor shown that materially 
different reasonable assumptions could not have been made by other 
bidders.  The protester's mere assertion that it knew enough about the 
agency's work load requirements to prepare its bid does not establish 
either that its bid accurately reflects the actual needs of the agency 
or that an award under this IFB would be fair to other bidders.  See 
Turbine Engine Servs. Corp., B-215281.2, Aug. 21, 1984, 84-2 CPD  para.  206 
at 2.

Additionally, since some floor plan drawings in the IFB which 
identified labs, computer rooms and restrooms significantly 
understated the number of these rooms, the solicitation did not 
reflect the agency's actual minimum needs, and award under this IFB 
therefore would not serve the actual minimum needs of the agency.  
This provides further support for the cancellation.  See 
Ferguson-Williams, Inc., B-258460; B-258461, Jan. 24, 1995, 95-1 CPD  para.  
39 at 4-5; Turbine Engine Servs. Corp., supra at 2.

The protest is denied.

Comptroller General
of the United States

1. Janitorial services was the largest service area under either 
fixed-priced or indefinite quantity work.  The government estimate 
showed it accounted for more than half of the fixed-priced work.

2. For example, "General Janitorial Daily Services" and "Standard 
Janitorial Daily Services:  Restroom + Sh[owers]" were 2 of the 10 
categories for janitorial services for which monthly prices were 
requested.  

3. The agency alleges that Neals, as the second low bidder,  is not an 
interested party eligible to maintain this protest of the cancellation 
pursuant to 4 C.F.R.  sec.  21.0(a), 21.1(a) (1997).  The record evidences 
that the low bid expired and that Neals extended its bid acceptance 
period.  Under the circumstances, we consider Neals to be an 
interested party.  See International Alliance of Sports Officials, 
B-211549, Jan. 24, 1984, 84-1 CPD  para.  110 at 3.

4. For example, in approximate terms, Neals's bid was well more than 
double the government estimate for some items, and less than half of 
that estimate on others.  The magnitude of difference between Neals's 
bid and those of other bidders for various line items was often even 
greater.

5. After additional reviews, the contracting officer also determined 
that the IFB may be defective for other reasons, which the protester 
also contested.  Since we find reasonable the contracting officer's 
determination that a compelling reason existed to cancel the IFB based 
on the inadequate janitorial services specifications, review of these 
other issues would be academic.

6. The pattern of understated and overstated prices could also be 
evidence of unbalanced bidding.  See DGS Contract Servs., Inc.; 
Inventory Accounting Servs., Inc., B-258429; B-258429.2, Jan. 19, 
1995, 95-1 CPD  para.  27 at 3.  This would be difficult to determine 
without knowing the work load estimates used by the bidders, although 
it seems extremely unlikely that all seven bidders adopted price 
unbalancing strategies in light of the IFB statement that unbalanced 
prices would be basis for bidder disqualification.  In the unlikely 
event that all the bids were unbalanced, which was not an issue 
addressed by either party, it appears that the structure of the 
solicitation may have inadvertently encouraged unbalanced bidding, in 
which case the agency should have canceled the solicitation.  See T.L. 
James & Co., Inc., B-219443, Oct. 21, 1985, 85-2 CPD  para.  430 at 6.