BNUMBER:  B-279633             
DATE:  June 3, 1998
TITLE: Neals Janitorial Service, B-279633, June 3, 1998
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Matter of:Neals Janitorial Service

File:B-279633            
        
Date:June 3, 1998

Ralph B. Neal for the protester.
Thomas W. Berndt, Esq., and Bernard J. Roan, 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

1.  An agency may disclose bid prices to competitors after the prices 
have been announced at a public bid opening.

2.  Agency's determination that slightly unbalanced prices for 
separately priced, indefinite-quantity line items do not present a 
risk that the government will pay unreasonably high prices for 
contract performance is reasonable, where the evaluated price of the 
items is based on estimated quantities and there is no evidence that 
the estimates are inaccurate.

DECISION

Neals Janitorial Service protests an award to South Bay Maintenance 
Company, Inc., under request for offers (RFO) No. 2-36308(MXD), issued 
by the National Aeronautics and Space Administration (NASA), Ames 
Research Center for janitorial, refuse collection, grounds 
maintenance, and pest control services at Ames Research Center 
(including Moffet Federal Airfield), Moffet Field, California, and at 
Onizuka Air Station Annexes I, II and III (adjacent to Ames).

We deny the protest in part and dismiss it in part.

The services to be performed at Ames were previously solicited under 
invitation for bids (IFB) No. IFB2-36271(JMS).  NASA canceled the IFB 
after bid opening after determining that the statement of work did not 
provide adequate information to permit all bidders to determine 
workload requirements, and thus the IFB did not allow for competition 
on a common basis.  Neals, which had submitted the second low bid on 
that solicitation, protested the cancellation.  Our decision, Neals 
Janitorial Serv., B-276625, July 3, 1997, 97-2 CPD  para.  6, denied the 
protest, finding that the agency had a compelling reason to cancel the 
IFB.

On December 18, 1997, NASA issued the RFO for the services at Ames, 
and for additional services at Onizuka.  The RFO, issued under NASA's 
Mid-Range Procurement Procedures (NFS 1871) as a total set-aside for 
section 8(a) qualified small business concerns, contemplated the award 
of a fixed-price, indefinite- quantity contract for 1 year with 4 
option years.  The RFO stated that the procurement was an acquisition 
of a commercial item under Part 12 of the Federal Acquisition 
Regulation (FAR), and that the FAR Part 15 rewrite (FAC 97-02) was 
also applicable.[1]

Section RFO.4 of the solicitation stated that offers would be 
evaluated for price, past performance and technical capability in 
meeting the requirements.  The solicitation stated at section RFO.6 
that award would:

     be based on the lowest priced, technically acceptable offer 
     responsive to the requirements of the solicitation submitted by a 
     responsible offeror as determined in accordance with the minimum 
     requirements set forth in the solicitation.

NASA received three offers by the due date of February 4, 1998.  South 
Bay submitted the lowest total price of $15,681,893 ($12,864,335 for 
the services at Ames and $2,817,558 for the services at Onizuka).  The 
protester's slightly higher-priced offer was the next lowest.

The source selection decision, dated March 10, stated:

     All offers received in response to the [RFO] have been evaluated 
     in accordance with [applicable procedures and terms of the RFO]. 
     . . . Based on this evaluation, the offer from [South Bay] has 
     been determined to be the lowest priced technically acceptable 
     offer.

By letter of March 12, NASA notified Neals that South Bay's offer had 
been selected for award.  By letter of the same date, Neals protested 
to NASA.  Neals also requested and received a debriefing, which NASA 
conducted on March 17.  On March 26, Neals protested to our Office 
(and subsequently withdrew its agency-level protest).

Neals protests that the integrity of NASA's procurement process has 
been compromised by the disclosure of the bid prices from the canceled 
IFB.  This disclosure allegedly provided South Bay an improper 
opportunity to lower its offer based on the disclosed bid prices, and 
allegedly constitutes an improper release of information from a 
protective order issued by our Office in connection with the protest 
of the canceled IFB.  These contentions are without merit. 

The nature of an unclassified IFB, as was the canceled IFB, is that 
bids submitted in response to the IFB are publicly opened at the time 
stated in the IFB, and the bid prices are generally announced and 
available for examination by interested persons.  FAR  sec.  14.402-1.  The 
bid prices are recorded on an Abstract of Offers form (Standard Form 
1409), which is also made available for public inspection.  FAR  sec.  
14.403(b).  Since bid opening for the IFB occurred prior to 
cancellation, NASA properly complied with the mandates of the FAR for 
conducting a public bid opening, recording the bid prices on a bid 
abstract, and making that information available to the public.  
Moreover, since the bid prices were public information at the time of 
bid opening, they were not subject to the protective order issued by 
our Office in connection with the protest of the IFB cancellation.  

Although the integrity of the competitive bid process generally 
dictates that an award must be made after bids have been exposed, 
cancellation and recompetition is permitted even after such disclosure 
where a compelling reason to do so exists.  FAR  sec.  14.404-1; Neals 
Janitorial Serv., supra, at 4.  As explained in our prior decision, 
such a compelling reason existed for the cancellation of the IFB 
because the bids submitted demonstrated that, due to an inadequate 
statement of specifications, bidders did not prepare their bids on a 
common basis, nor in a manner that would meet the agency's actual 
minimum needs.  Neals Janitorial Serv., supra, at 4-6.  Under such 
circumstances, no improper auction is created by a resolicitation 
after the cancellation of an IFB.  See Atkinson Dredging Co., Inc., 
B-250965, B-250967, Feb. 17, 1993, 93-1 CPD  para.  153 at 4.

Neals next alleges that South Bay's line item prices on the RFO are 
unbalanced, such that South Bay's offer should be rejected.  

FAR  sec.  15.404-1(g)(1) (FAC 97-02) provides that unbalanced pricing may 
increase performance risk and could result in payment of unreasonably 
high prices; unbalanced prices arise where the prices of one or more 
contract line items are significantly over- or understated as 
indicated by the application of cost or price analysis techniques.[2]  
FAR  sec.  15.404-1(g)(2) requires that all offers with separately priced 
line items or sub-line items be analyzed, using cost or price analysis 
techniques, to determine if the prices are unbalanced, and if an offer 
is found to be unbalanced, the contracting officer must (i) consider 
the risks to the government associated with the unbalanced pricing in 
determining the competitive range and in making the source selection 
decision, and (ii) consider whether award of the contract will result 
in paying unreasonably high prices for contract performance.  An offer 
may be rejected if the contracting officer determines that the lack of 
balance poses an unacceptable risk to the government.  FAR  sec.  
15.404-1(g)(3).

Here, the agency conducted a price analysis of the offers and, 
although it found some evidence of slightly unbalanced sub-line item 
prices, the agency determined that such prices did not pose an 
unacceptable price risk and did not indicate that the government would 
be paying unreasonably high prices for contract performance.[3] 

When there is concern about potential risk arising from unbalanced 
pricing of indefinite-quantity work, a key factor is the accuracy of 
the government's estimates of the anticipated quantities of the 
various tasks to be performed--if the estimates are reasonably 
accurate, then evidence of mathematical unbalancing generally does not 
present a risk that the government will pay unreasonably high prices 
for contract performance.  See Allstate Van & Storage, Inc., B-247463, 
May 22, 1992, 92-1  para.  465 at 5; G.C. Ferguson 4-T Constr., B-247014, 
Apr. 22, 1992, 92-1 CPD  para.  381 at 7.  Here, Neals does not allege, and 
the record does not reflect, that the estimated quantities in the 
solicitation are not reasonably accurate.  Therefore, we have no basis 
to question the reasonableness of NASA's conclusion that whatever 
limited unbalancing existed in sub-line item pricing did not pose an 
unacceptable price risk.

Neals also alleges that the terms of the solicitation unfairly favored 
South Bay.  This allegation is untimely filed under our Bid Protest 
Regulations, which requires that a protest based upon alleged 
improprieties in a solicitation that are apparent prior to the closing 
time for receipt of initial proposals be filed before that time, 4 
C.F.R.  sec.  21.2(a)(1) (1998), and will not be considered.

Finally, Neals states in its comments on the agency report submitted 
on May 7, that it learned at the debriefing that its offer for the 
Onizuka portion of the contract was the lowest price for that work, 
and thus alleges that Neals should receive a contract for the Onizuka 
work requirements.  Our Bid Protest Regulations require that a protest 
not based upon alleged improprieties in a solicitation must be filed 
no later than 10 days after the protester knew or should have known of 
the basis for protest.  4 C.F.R.  sec.  21.2(a)(2).  Here, NASA conducted 
the debriefing of Neals on March 17.  Neals thus knew that it had 
offered the lowest price for the Onizuka portion of the contract at 
the time it first protested to our Office on March 26, but failed to 
raise this as a protest issue.  We thus dismiss this allegation as 
untimely since it was first raised nearly 2 months after the 
debriefing.  See Swafford Indus., B-238055, Mar. 12, 1990, 90-1 CPD  para.  
268 at 2.

The protest is denied in part and dismissed in part.

Comptroller General
of the United States

1. For solicitations issued between October 10 through December 31, 
1997, agencies had the option to invoke the FAR Part 15 rewrite, as 
NASA did here.

2. FAR  sec.  15.404-1(g)(1) also states that the risks of unbalanced 
pricing are greatest when:  (i) start-up, mobilization, or first 
article production or testing are separate line items; (ii) base and 
option year requirements are separate line items; or (iii) the 
evaluated price is the aggregate of estimated quantities to be ordered 
under separate line items of an indefinite-delivery contract.   

3. To the extent Neals alleges that South Bay's prices for the Ames 
and Onizuka portions of the contract may have been unbalanced, there 
is no evidence to support such an allegation.  South Bay's prices for 
each portion is close to the government estimate and to the 
protester's prices for the same work.