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.