BNUMBER:  B-281242             
DATE:  January 12, 1999
TITLE: Ranco Construction, Inc., B-281242, January 12, 1999
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Matter of:Ranco Construction, Inc.

File:B-281242            
        
Date:January 12, 1999

Edward J. Hoffman, Esq., and John W. Fowler, Jr., Esq., Blank, Rome, 
Comisky & McCauley, for the protester. 
Michele Gregos for Ascend Construction Management, Inc., and 
DilipVerghese for D&K Construction Company, Inc., for Ascend 
Construction Management, Inc./D&K Construction Company, Inc., a Joint 
Venture, the intervenor. 
Joseph J. Cox, Esq., U.S. Army Corps of Engineers, for the agency. 
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that bid is so front-loaded that it is unbalanced is denied 
where record shows that the differences between the awardee's prices 
for the challenged line items and the other bidders' prices, as well 
as the government estimate, were not so great as to require a finding 
that the awardee's pricing was unbalanced.

DECISION

Ranco Construction Company, Inc. protests the award of a contract to 
Ascend Construction Management, Inc./D&K Construction Company, Inc, a 
Joint Venture, under invitation for bids (IFB) No. DACA51-98-B-0046, 
issued by the U.S. Army Corps of Engineers for various construction 
requirements at McGuire Air Force Base.  Ranco contends that Ascend's 
bid was unbalanced and cannot properly form the basis for the awarded 
contract.

We deny the protest.

The IFB sought fixed-price bids for the demolition of certain 
preexisting structures, site preparation work, and construction of new 
structures for a large fire station and a radar and approach control 
(RAPCON) building.  The requirements were divided among 10 contract 
line items (CLIN) for each of which bidders were required to submit 
lump-sum prices.  Ranco's protest relates only to CLIN Nos. 0003 and 
0007; CLIN No. 0003 covers all work associated with construction of 
the RAPCON facility and CLIN 0007 covers demolition of a pumphouse and 
removal of several underground storage tanks.

The agency received five bids.  After bid opening, the apparent low 
bidder asserted that it had made a mistake in calculating its bid; the 
agency denied that firm's request for upward adjustment of its price 
but permitted the firm to withdraw its bid.  Ascend was the apparent 
second-low bidder and Ranco was third-low.  The agency made award to 
Ascend on September 30, 1998.

Ranco asserts that Ascend's bid should be rejected as unbalanced, 
specifically, because Ascend's prices for CLIN Nos. 0003 and 0007 are 
so inflated that they essentially will result in an advance payment.  
In support of its position, Ranco notes that Ascend's price for CLIN 
No. 0003 is approximately 25 percent higher than the next-low bid and 
almost twice the government estimate.  As for CLIN 0007, Ranco notes 
that Ascend's bid is almost twice the next-low bid and more than twice 
the government estimate.  Ranco concludes that this alleged 
unbalancing will result in a prohibited advance payment to Ascend 
because the work for these two CLINS must be performed early in the 
contract.[1]

The current regulatory language governing unbalanced pricing in offers
provides that unbalanced pricing exists when, despite an acceptable 
total evaluated price, the price of one or more contract line items is 
significantly over- or understated.[2]  FAR  sec.  15.404-1(g) (FAC 97-02).  
The current regulation requires that offers with separately priced 
line items be analyzed to determine if the prices are unbalanced, and 
indicates that cost or price analysis techniques are to be used in 
this analysis.  Id.  Such techniques include, for example, comparison 
of proposed prices with other prices received in response to the 
solicitation, as well as comparison to an independent government 
estimate.  FAR  sec.  15.404-1(b).

Here, we see nothing improper in the agency's decision to accept the 
bid, since the agency had a reasonable basis for concluding that 
Ascend's pricing, including the pricing for CLIN Nos. 0003 and 0007, 
was not unbalanced.  First, while Ascend's price for CLIN No. 0003 was 
the highest received, it was nonetheless broadly in line with the 
other bidders' prices.  Aside from Ascend's bid and the bid withdrawn 
due to a mistake, the bids ranged from Ranco's $1,500,000 to 
$1,733,300.  Ascend's bid of $2,000,000 was only a third higher than 
Ranco's.  Ascend's CLIN No. 0003 price also was less than twice the 
government's estimate of $1,060,800.  Again, while Ascend's price for 
CLIN No. 0007 ($240,000) was the highest submitted, it was only 
slightly more than twice the government's estimate ($107,000) and less 
than twice Ranco's bid of $126,000.  Moreover, while the protester 
alleges that the work covered by the two challenged line items will be 
performed earlier than other work, the agency and awardee dispute 
this, maintaining instead that much of the work is to be performed 
concurrently; we see nothing in the record to support the protester's 
position that the CLINs at issue will necessarily be performed first.  
Accordingly, we conclude that nothing in the relatively small price 
differences between bids required the agency to find that Ascend's bid 
was unbalanced.  

The protest is denied.

Comptroller General
of the United States

1. In its comments responding to the agency's report, Ranco alleged 
for the first time that Ascend's bid was nonresponsive for several 
additional reasons.  By notice dated November 16, 1998, we advised the 
parties that we considered these contentions untimely, and therefore 
not for consideration, because Ranco had failed to diligently pursue 
information as to Ascend's bid following the bid opening.  Thomas May 
Constr. Co., B-255683, Mar. 23, 1994, 94-1 CPD  para.  210; see also        
Bio-Nomic Servs., Inc., B-278341, Dec. 24, 1997, 97-2 CPD  para.  173 at 3.  
Ranco challenges our conclusion, arguing that, because it originally 
was only the third-low bidder, it had no reason to review the two 
lower bids at the time of bid opening.  This argument is without 
merit.  In Thomas May Constr. Co., we held that a bidder which fails 
to obtain bid information at the time of bid opening has not proceeded 
diligently, and that a protest based on information received pursuant 
to a Freedom of Information Act request filed more than 2 weeks after 
bid opening therefore is untimely.  A bidder's ranking among the 
competing bidders has no bearing on the obligation to proceed 
diligently, and since all bidders have access to the bids at a public 
bid opening, we see no reason why the principle in Thomas May Constr. 
Co. should not apply to Ranco.    

2. The term "advance payment" is no longer used in discussing 
unbalanced pricing in the revised Part 15 of the Federal Acquisition 
Regulation (FAR), which applies to solicitations issued after January 
1, 1998, such as the subject IFB.