BNUMBER:  B-280772.2; B-280772.3 
DATE:  December 4, 1998
TITLE: Massaro Company; Poerio Inc., B-280772.2; B-280772.3,
December 4, 1998
**********************************************************************

Matter of:Massaro Company; Poerio Inc.

File:     B-280772.2; B-280772.3

Date:December 4, 1998

Joseph A. Massaro, Jr., Esq., for Massaro Company; and Keith L. Baker, 
Esq., and Jeffrey E. Weinstein, Esq., Eckert Seamans Cherin & Mellott, 
for Poerio Inc., the protesters.
Kenneth B. MacKenzie, Esq., and Charlma Quarles, Esq., Department of 
Veterans Affairs, for the agency.
Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency did not have a compelling reason to cancel solicitation after 
bid opening based upon allegedly ambiguous pricing requirements, where 
the solicitation, when read as a whole, is susceptible to only one 
reasonable interpretation regarding how bidders were to structure 
their bids.

DECISION

Massaro Company and Poerio Inc. protest the cancellation after bid 
opening of invitation for bids (IFB) No. 9810 A/E, issued by the 
Department of Veterans Affairs (VA) for the environmental improvement 
of three inpatient units at the VA Medical Center, Pittsburgh, 
Pennsylvania.  The protesters contend that, contrary to the agency's 
stated reason for canceling the IFB, the solicitation's pricing terms 
were not ambiguous; the protesters seek reinstatement of the canceled 
IFB.

We sustain Poerio's protest and deny Massaro's protest for lack of 
prejudice.

The IFB, issued on June 1, 1998, required bidders to provide prices 
("figures") for two bid items (items I and II, described below) and 
three alternates (described as minor additions or deletions to the 
IFB's performance requirements); a unit price for mine grouting also 
was required.  The IFB provided, at  sec.  01010,  para.  1.2.A., the following 
descriptions:

     STATEMENT OF BID ITEM(S)

     ITEM I, GENERAL CONSTRUCTION:  Work includes general new 
     construction, alterations, walks, grading, paving, drainage, 
     mechanical and electrical work, elevators, necessary removal of 
     existing structures and construction and certain other items.

     ITEM II, ASBESTOS ABATEMENT:  Work includes abatement of asbestos 
     in the area of the work as well as in other selected areas, 
     including the work described in ALTERNATE 2 below.[[1]]

Amendment No. 2 to the IFB, issued on July 1, included the following 
clarification:

     Although the VA has asked for the price of the Asbestos Abatement 
     work to be listed separately (ITEM II - ASBESTOS ABATEMENT . . . 
     ) on the bid form, all asbestos abatement work is included in a 
     single prime contract that will be the responsibility of the 
     General Contractor.

Nine bids were received at bid opening on July 15.  Poerio's total bid 
of $11,401,500 ($10,687,000 for bid item I, plus $714,500 for bid item 
II) was the apparent low bid received.  Massaro's total bid, 
calculated by the agency to be $11,586,000 ($10,886,000 for bid item 
I, plus $700,000 for bid item II), was the apparent second low bid 
received.

After bid opening, the president of Massaro notified the contracting 
officer that the firm's item I (general construction) price 
represented Massaro's total bid price, since it included Massaro's 
item II (asbestos abatement) price.  Massaro explained to the 
contracting officer that, prior to bid opening, the firm was unclear 
about how to price items I and II--i.e., whether the item I and II 
prices were to represent different portions of the overall work, so 
that the bidder's total price for all work under the solicitation was 
the sum of the prices bid for items I and II; or whether the price for 
item I should represent the bid for all work included under the 
solicitation, with the price provided for item II merely identifying 
the portion of the item I price related to asbestos abatement.  
According to Massaro, it asked an individual at the office of the VA's 
architect for the project for direction.  Massaro states that the 
individual instructed Massaro to structure its bid, as it ultimately 
did, by including the price for the item II work in the firm's item I 
price.  Massaro then listed its break-out price for the asbestos 
abatement work as its item II price.[2]

The contracting officer requested work papers from Massaro to support 
the firm's claim as to its intended total bid price.  Massaro 
submitted undated work papers, allegedly produced by computer on the 
day of bid opening.  After concluding that the work papers 
demonstrated the inclusion of $700,000 for asbestos abatement in a 
total bid price of $10,886,000 (which was the amount of Massaro's item 
I price), the contracting officer determined that Massaro's intended 
total bid was, in fact, $10,886,000, and that it displaced Poerio's 
bid as the apparent low bid for award.

On August 10, Poerio filed a protest with our Office contending that 
the agency improperly allowed Massaro to submit work papers after bid 
opening to support its alleged intended bid.  In response to that 
protest, the VA reported that it was canceling the IFB due to the 
solicitation's ambiguous pricing terms.  The agency reported that, 
although it believed the initial IFB was unambiguous in requiring 
separate prices for the item I and item II work, the IFB's pricing 
requirements were rendered ambiguous upon the issuance of amendment 
No. 2.  (That amendment, as quoted above, stated that although 
separate prices were requested for each of the two items, "all 
asbestos abatement work is included in a single prime contract that 
will be the responsibility of the General Contractor.")  On September 
16, in light of the cancellation of the solicitation, we dismissed the 
Poerio protest as academic.

Massaro and Poerio, on September 14 and September 21, respectively, 
filed the current protests against the agency's cancellation of the 
IFB.  Both protesters contend that the IFB is not ambiguous; each 
protester contends that it should receive the award under the 
reinstated IFB.

An agency generally may cancel an IFB after bid opening and expose 
prices only if there is a compelling reason to do so.  Federal 
Acquisition Regulation  sec.  14.404-1(a)(1); Shetland Properties of Cook 
County Ltd. Partnership, B-225790.2, July 1, 1987, 87-2 CPD  para.  2 at 2.  
Whether cancellation is warranted on the basis of ambiguous or 
inadequate specifications is a decision of the contracting agency, 
whose determination will not be disturbed by our Office unless it is 
shown to be arbitrary, capricious, or not supported by substantial 
evidence.  Canadian Commercial Corp./Ballard Battery Sys. Corp., 
B-255642, Mar. 18, 1994, 94-1 CPD  para.  202 at 4; City Wide Press, Inc., 
B-231469, Aug. 10, 1988, 88-2 CPD  para.  127 at 2-3.  A term in a 
solicitation is ambiguous if it is susceptible to more than one 
reasonable interpretation when read in the context of the solicitation 
as a whole.  TUMI Int'l, Inc., B-235348, Aug. 24, 1989, 89-2 CPD  para.  174 
at 2; Energy Maintenance Corp., B-223328, Aug. 27, 1986, 86-2 CPD  para.  
234 at 4.

Both protesters contend that the IFB was not ambiguous--each 
protester, however, has a very different interpretation of the pricing 
requirements at issue.  Poerio contends that, since the bid schedule 
set out two separate and distinctly described work requirements, as 
two separate bid items for which bidders were required to provide 
separate prices, Massaro's interpretation that the IFB required a 
total bid price for item I and a break-out price for item II is 
unreasonable.  We agree.

Here, the solicitation, when read as a whole, allows only one 
reasonable interpretation for the prices required from the bidders.  
First, the cover page of the solicitation (Standard Form 1442) 
identifies two separate bid items for the acquisition, "general 
construction" and "asbestos abatement."  Each of the two bid items is 
identified on that page as a free-standing item for acquisition by the 
agency--specifically, there is no indication that one of the two 
identified bid items is encompassed by the other.  Second, the IFB's 
performance requirements, set out in  sec.  01010 (quoted above), expressly 
define "general construction" and "asbestos abatement" as distinct, 
separable work efforts; again, each bid item description follows the 
separate title and item number associated with each of the two 
separate work categories.  The stated item I (general construction) 
description simply does not encompass the separately stated item II 
specialized work requirements in the area of asbestos abatement.  
Third, the bid schedule itself clearly separates the two bid items:  
there is one space for the bidder's price for the general construction 
work, and a separate space for the price for the asbestos abatement 
work.  Finally, amendment No. 2 reiterated that "separate" prices were 
required for these two distinct components of the total work required 
by the IFB.  Contrary to Massaro's and the agency's contentions, the 
fact that bidders were advised by amendment No. 2 that one prime 
contract would be awarded, to include both the item I and item II work 
requirements, simply does not provide any reasonable basis for a 
bidder to conclude that its item II price should be included in its 
item I price.

In short, throughout the IFB, and on the bid schedule itself, two 
distinct work efforts were identified, each requiring its own separate 
pricing information.  The IFB, as issued and as amended, never 
indicated that a bidder's asbestos abatement (item II) price was to be 
expressed as a break-out price that was included in its item I price.  
Massaro's interpretation of the IFB's required pricing structure 
simply is not reasonable.[3]

The agency canceled the IFB only after it determined that both 
Poerio's and Massaro's varying interpretations of the IFB's pricing 
terms were reasonable.  Since we have determined that Massaro's 
interpretation was not reasonable, and that the IFB was not ambiguous, 
we conclude that the VA did not have a compelling reason to cancel the 
IFB after bids had been exposed.  TUMI Int'l, Inc., supra, at 5.  
While both protesters challenge the cancellation, which we agree was 
improper, only Poerio was prejudiced by the improper cancellation 
since its bid was properly found low, and there was no basis to accept 
Massaro's claim that it intended to bid a total of only $10,886,000.  
Since Massaro's bid was not low, it was not prejudiced by the improper 
cancellation; given the lack of prejudice, we deny Massaro's protest.  
McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD  para.  54 at 3; see 
Statistica, Inc. v. Christopher, 103 F.3d 1577, 1581 (Fed. Cir. 1996).

In sum, we sustain Poerio's protest and recommend that the IFB be 
reinstated and award made to Poerio, if otherwise appropriate, as the 
firm that submitted the lowest bid.  We also recommend that Poerio be 
reimbursed the reasonable costs of filing and pursuing its protest 
against the improper cancellation of the solicitation, including 
attorneys' fees.  4 C.F.R.  sec.  21.8(d)(1) (1998).  Poerio should submit 
its claim for costs, detailing and certifying the time expended and 
costs incurred, with the contracting agency within 60 days after 
receipt of this decision.  4 C.F.R.  sec.  21.8(f)(1).

Poerio's protest is sustained; Massaro's protest is denied.

Comptroller General
of the United States

1. The "work described" in alternate No. 2 refers to the abatement of 
asbestos floor tile located at the third floor.  Alternate No. 2 
prices were bid as a "deduct" of total bid prices, since this 
alternate is described as a deletion of work from the overall 
performance requirements.

2. The record shows that the individual identified by Massaro as the 
source of that instruction was not one of the two individuals (one of 
whom was the contracting officer) identified in the IFB as authorized 
contacts for information about the solicitation.

3. Massaro's essential concern appears to be that the firm was 
instructed, by an individual in the office of the architect for this 
VA project, to set out its bid pricing structure as it did--with 
Massaro's item I price representing a total bid amount, and its item 
II price merely representing a break-out portion of that item I 
amount.  Massaro, however, unreasonably followed this oral instruction 
at its own risk.  The alleged oral advice here--besides representing a 
wholly unreasonable reading of the solicitation requirements--was 
unauthorized and nonbinding.  As Massaro knew from the terms of the 
IFB, any bidder desiring an explanation or interpretation of the IFB 
terms was required to submit a request in writing to the appropriate 
individuals identified in the IFB, allowing sufficient time for a 
reply to reach all prospective bidders before submitting their bids; 
bidders were expressly instructed that oral explanations or 
instructions before award would not be binding.  IFB  sec.  00100,  para.  5.