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.