BNUMBER: B-279132
DATE: May 11, 1998
TITLE: D & L Construction Co., Inc., B-279132, May 11, 1998
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Matter of:D & L Construction Co., Inc.
File: B-279132
Date:May 11, 1998
Larry L. Smith for the protester.
Stephen Marvin, for A.C.E. General Contractors, Inc., an intervenor.
Michael F. Kiely, Esq., Department of Agriculture, for the agency.
Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Contracting agency properly awarded a fixed-price construction
contract to the awardee on the basis of its lowest priced bid, even
though the bid contained an alleged price discrepancy for an additive
item, where the contract was awarded for the basic construction work
only and does not include the additive item.
2. Protest that the agency improperly accepted the awardee's bid
despite the fact that the bid contained alleged minor irregularities
regarding the title of the person who signed the bid and the date that
the bid was signed is denied, where the title and date were clearly
set forth in several other parts of the bid and the alleged
irregularities do not affect price, quantity, quality, or delivery of
the required construction services.
3. Protest that the awardee's bid was nonresponsive to the invitation
for bids' (IFB) requirement that toilets be supplied from two
manufacturers named in the specifications is denied, where the
contracting agency reasonably interpreted the IFB as allowing
installation of toilets manufactured by other than the named firms and
the awardee's bid took no exception to the IFB's requirements.
4. Bid is not materially unbalanced where there is no evidence that
the awardee's bid will not result in the lowest cost to the
government.
DECISION
D & L Construction Co., Inc., protests the award of a construction
contract to A.C.E. General Contractors, Inc., by the Forest Service,
United States Department of Agriculture, pursuant to invitation for
bids (IFB) No. R10-98-01. The protester alleges that A.C.E.'s bid was
nonresponsive and unbalanced.
The protest is denied.
Issued on October 30, 1997, the IFB solicited bids for reconstruction
and expansion of the Quartz Creek Campground, in the Chugach National
Forest, in Alaska. The IFB required bids to include a fixed price for
the basic work and for each of three additive items of work. Among
other things, the contract would require construction of new roads and
campsites; extensive landscaping; demolition of the old fee collection
station; construction of parking areas; removal and refurbishing of
campfire grates; demolition, removal, and reconstruction of
flush-toilet and vault-toilet buildings; and installation of water and
electrical lines to the flush-toilet buildings.
Eight bids were received and opened on January 6, 1998. A.C.E.'s bid
was the lowest priced bid for basic work alone ($1,066,007) and for
the basic work and the three additive items combined ($1,153,507); D &
L's bid was the second-lowest priced bid for basic work alone
($1,092,597) and for the basic work plus the three additive items
combined ($1,176,670).[1] After bid opening, the Forest Service
decided to award a contract for the basic work only. On January 22,
after determining that A.C.E. was responsible and that A.C.E.'s total
price was reasonable, the contracting officer awarded A.C.E. the
contract. D & L filed this protest shortly thereafter.
The protester alleges that A.C.E.'s bid was nonresponsive because it
included two different prices for additive item 1 (construction of a
pavilion). D & L points out that A.C.E. inserted a price of $20,000
for additive item 1 in the price schedule of its bid, but inserted a
price of $27,500 for additive item 1 in standard form (SF) 1442--the
"Solicitation, Offer and Award" portion of the bid--thus, creating a
$7,500 discrepancy.[2] D & L contends that A.C.E.'s bid should not
have been accepted because its price for additive item 1 was
ambiguous.
From a review of A.C.E.'s bid, it appears that A.C.E. made a mistake
when it carried its prices over from the bid schedule to the
appropriate block of SF 1442. A.C.E. inserted prices in its bid
schedule as follows:
Total Bid - Base Construction Item$1,066,007
Additive Item 1 - Pavilion $ 20,000
Additive Item 2 - Electricity$ 5,000
Additive Item 3 - Fire Pit Ring$2,500
However, when A.C.E. inserted its prices into the "amounts" block of
SF 1442, A.C.E. entered prices as follows:
Base Bid $1,066,007
Additive 1 $ 27,500
Total $1,093,507
Thus, it appears that A.C.E. incorrectly entered on the SF 1442 the
total price for all three additive items ($20,000 + $5,000 + $2,500 =
$ 27,500) and mislabeled them as the price for additive item 1 alone.
Under an IFB that includes additive work items, bids must be evaluated
only on the basis of the work actually awarded. NJS Dev. Corp.,
B-230871, July 18, 1988, 88-2 CPD para. 62 at 2. The Forest Service
decided, because of funding limitations (prior to bid opening, the
agency reserved $1.1 million for the project), to award a contract for
the basic work only. As A.C.E.'s lowest priced bid was $26,590 less
than D & L's next-low bid for the basic work alone, the Forest Service
awarded the contract to A.C.E. Because the agency decided not to
include additive item 1 in the contract, the alleged $7,500
discrepancy in A.C.E.'s bid for additive item 1 was of no consequence
and did not require rejection of the bid.[3] Id.
The protester alleges that A.C.E.'s bid was nonresponsive because the
person who signed the SF 1442 did not include her title as an officer
of A.C.E. The protester also alleges that the bid was nonresponsive
because it appears that, when A.C.E.'s president signed the bid
schedule, she first wrote in the date by hand as "1/6/97" and then
corrected the year to 1998 by making the last digit into an 8, without
initialing the correction. These protest allegations are without
merit.
A.C.E.'s president signed the SF 1442 included in A.C.E.'s bid.[4]
Even though A.C.E.'s president did not indicate her position within
the firm on the SF 1442, she did sign and indicate that she was the
firm's president in several other places in the bid (i.e., the bid
bond, the letter revising upward the price for additive item 1, and
the bid schedule). Thus, her position within A.C.E. was clear from
the other parts of the bid. Moreover, even though D & L alleges that
A.C.E.'s president originally wrote the numerals "97" and then wrote
an "8" over the last digit when writing the date of her signature on
the bid schedule, the date as ultimately written is the actual date of
the bid opening (i.e., January 6, 1998) and is the same date that
appears in the SF 1442 and the letter revising upward the price for
additive item 1. The alleged irregularities provide no reason for
sustaining the protest because the signatory's position and the bid
date are clearly set forth in several different parts of the bid; the
bid documents are internally consistent; and the alleged
irregularities do not affect price, quantity, quality, or delivery.
Federal Acquisition Regulation sec. 14.405; see R.R.Donnelley/Nimbus
Joint Venture, B-261301, Aug. 3, 1995, 95-2 CPD para. 56 at 4 n.3; see
also C.B.C. Enters., Inc., B-246235, Oct. 31, 1991, 91-2 CPD para. 416 at
2-3.
The protester next alleges that A.C.E.'s bid is nonresponsive to the
IFB's requirements concerning design and construction of flush-toilet
and vault-toilet buildings. D & L interprets the IFB as requiring
that the contractor furnish toilets that are constructed by one of two
manufacturers of pre-cast concrete toilets that were named in the
specifications. D & L believes that A.C.E. may intend to construct
the toilets itself and, therefore, contends that A.C.E.'s bid is
nonresponsive. The agency responds that it is clear from the plain
language of the specifications that the contractor is not required to
obtain the toilets from any particular manufacturer(s) and, therefore,
A.C.E. properly can meet the IFB's requirements by manufacturing the
toilets itself.
Where a dispute exists as to the meaning of the IFB's terms, our
Office resolves the matter by reading the IFB as a whole and in a
manner that gives effect to all of the IFB's provisions. AABLE Tank
Servs., B-274867, Nov. 12, 1996, 96-2 CPD para. 181 at 2. To be
reasonable, an interpretation of IFB language must be consistent with
the IFB when read as a whole. Id. After reviewing the
specifications, we conclude that the agency's interpretation that bids
were not required to be based upon supplying toilets manufactured by
one of the two firms listed in the specifications is reasonable.
The IFB required the contractor to furnish and install two concrete
vault toilets and three concrete flush toilets.[5] The IFB contained
detailed specifications and design drawings for both types of toilets.
The specifications stated that both types of toilets must be
constructed by the same manufacturer. While the specifications listed
two companies as experienced suppliers of precast concrete vault
toilets, we think it is clear that the products of other manufacturers
can also be supplied, especially since the same provision of the
specification that lists the two named manufacturers also states that
precast concrete manufacturers are available in most parts of the
country. Nowhere do the specifications or drawings state that the
only acceptable products are those manufactured by the two listed
firms.
Since A.C.E.'s bid took no exception to the IFB's requirements, the
bid was responsive. The test for responsiveness is whether a bid as
submitted represents an unequivocal offer to provide the requested
supplies or services at a fixed price. Mobility Sys. and Equip. Co.,
B-243332, Apr. 25, 1991, 91-1 CPD para. 412 at 3. Unless something on the
face of the bid either limits, reduces or modifies the obligation of
the prospective contractor to perform in accord with the terms of the
IFB, the bid is responsive. Id. A.C.E.'s bid simply included bid
prices, as required in the bid schedule, for each line item of work
related to design, construction, and installation of the two types of
toilets required under the IFB's statement of work, specifications,
and drawings. Thus, A.C.E.'s bid was an unequivocal offer to perform
the exact work called for in the IFB and, therefore, was acceptable.
Hicklin GM Power Co., B-222538, Aug. 5, 1986, 86-2 CPD para. 153 at 4.
Whether A.C.E. will meet its commitment to fulfill the IFB's
requirements is a matter of contract administration not for review by
our Office. Id.
The protester next contends that the Forest Service should have
rejected A.C.E.'s bid as unbalanced because A.C.E.'s prices for
approximately 20 of the 63 line items of work required for the basic
contract were either overstated or understated when compared to the
agency's estimates of what those work items should cost the
government. As examples, D & L points out that A.C.E.'s line item
price for designing the flush toilets is more than the agency's
estimate, while A.C.E.'s line item prices for constructing flush
toilets and for furnishing/installing the vault toilets are less than
the agency's estimates. D & L also states that A.C.E.'s price for
furnishing/installing the vault toilets is less than the amount quoted
to D & L for precast concrete vault toilets by one of the suppliers
named in the specifications.
The agency responds that, when it examined A.C.E.'s prices, it
observed that some of the line item prices were "on the high side" and
some were "on the low side," but that overall the bid was close to the
government estimate and the next-low bid. The agency also reports
that initially its engineer was concerned about the fact that A.C.E.'s
line item prices for the two types of toilets were significantly less
than the agency's estimates, and that the contracting officer
discussed A.C.E.'s pricing structure with an A.C.E. representative who
indicated that, even though some of A.C.E.'s prices were "tight,"
overall A.C.E. was "comfortable" with its bid and intended to meet the
IFB requirements.[6] The contracting officer states that he checked
with A.C.E.'s references and determined that A.C.E. was a very
reliable contractor with an excellent past performance record. The
contracting officer, therefore, concluded that "there is no reasonable
doubt that award to A.C.E. will result in the lowest overall cost."
Before a bid can be rejected as unbalanced it must be shown to be both
mathematically and materially unbalanced. A bid is mathematically
unbalanced if it is based on nominal prices for some of the items and
overstated prices for other items. Where there is reasonable doubt
that the 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. Nomura Enter., Inc., B-271215, May
24, 1996, 96-1 CPD para. 253 at 3.
The record does not show that A.C.E.'s bid contained nominal prices
for any of the line items, and D & L has provided no evidence that
A.C.E.'s bid will not result in the government obtaining the lowest
ultimate cost. D & L has not challenged the accuracy of the IFB's
estimated quantities or asserted that the agency will deviate from the
quantity estimates in ordering work under the contract. Id. Even if
A.C.E.'s line item prices were somewhat higher or lower than the
agency's estimates, the agency expects A.C.E. to complete the entire
project encompassed by the contract for the basic work and A.C.E.'s
total price for the basic work was the lowest. Even if some of
A.C.E.'s prices were below cost (for example, if A.C.E. decides to
obtain pre-cast concrete vault toilets from one of the named suppliers
and the supplier's price turns out to be more than A.C.E.'s bid
price), that would provide no reason for rejecting A.C.E.'s bid
because there is nothing illegal in accepting a below-cost bid.
Hellenic Technodomiki, S.A., B-265931, Jan. 18, 1996, 96-1 CPD para. 91 at
3-4. We also note that A.C.E.'s total fixed price ($1,066,007) is
only about 0.6 percent more than the agency estimate ($1,059,227) and
is only 2.4 percent less than D & L's price ($1,092,597). A.C.E.'s
overall low price, therefore, provides no reason for questioning the
Forest Service's determinations that A.C.E.'s price was reasonable or
that A.C.E. was responsible. See Milcom Sys. Corp., B-255448.2, May
3, 1994, 94-1 CPD para. 339 at 10-11. As A.C.E.'s bid will result in the
lowest cost to the government, the agency properly accepted the bid.
The protest is denied.
Comptroller General
of the United States
1. All prices have been rounded to the nearest dollar in this
decision.
2. These prices were included in A.C.E.'s original bid. Prior to bid
opening, A.C.E. sent a letter to the agency adding $60,000 to the
original price for additive item 1. This upward revision had no
effect on the amount of the apparent discrepancy between the prices
inserted by A.C.E. for additive item 1 in its bid schedule and the SF
1442.
3. Generally, a bid must be rejected as nonresponsive if it is
ambiguous regarding the price the government must pay upon acceptance
of the bid. Murray Serv. Co. t/a EMD Mechancial Specialists,
B-274866, Dec. 9, 1996, 96-2 CPD para. 220 at 2-3. However, a bid which
is ambiguous as to price need not be rejected if it is low under all
reasonable interpretations. Id. Our review of A.C.E.'s bid reveals
that A.C.E.'s bid would still be low even under the interpretation
that is least favorable to A.C.E.
4. D & L has not challenged the authority of A.C.E.'s president to
bind A.C.E. to the contract awarded.
5. A vault toilet essentially is a large outhouse with no flushing
system or running water.
6. D & L alleges that the contracting officer improperly engaged in
discussions with A.C.E. after the bids were opened. The contracting
officer responds that he did not hold discussions with A.C.E. but
instead communicated with A.C.E. concerning responsibility matters,
concern about possible mistakes in some of A.C.E.'s low line item
prices, and to clarify certain aspects of the bid. As the record
shows that the Forest Service accepted A.C.E.'s bid as submitted by
A.C.E. on the bid opening date and contains no evidence that A.C.E.
was allowed to revise its bid in any manner after bid opening, this
allegation provides no basis for overturning the award.