TITLE:   Mallinckrodt Inc., B-282902, September 10, 1999
BNUMBER:  B-282902
DATE:  September 10, 1999
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Mallinckrodt Inc., B-282902, September 10, 1999

Decision

Matter of: Mallinckrodt Inc.

File: B-282902

Date: September 10, 1999

Bruce Crowe, Esq., for the protester.

Phillipa L. Anderson, Esq., Department of Veterans Affairs, for the agency.

Wm. David Hasfurther, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Award was improper where solicitation overstated estimated quantity of one
item by a factor of five, protester's bid was low based on quantity estimate
in solicitation, and agency made award based on estimate corrected after bid
opening.

DECISION

Mallinckrodt Inc. protests the award made to Nycomed Amersham for
radio-pharmaceutical products under invitation for bids (IFB) No. 614-46-99,
issued by the Department of Veterans Affairs Medical Center, Memphis,
Tennessee. Mallinckrodt contends that the award to Amersham was improper.

We sustain the protest.

The IFB, issued on January 19, 1999, requested the submission of unit and
total prices for an indefinite-quantity contract for a base year and two
1-year options. [1] The solicitation contained a quantity estimate for each
line item. Three firms submitted bids. Agency Report, exh. 4, Abstract of
Offers.

In reviewing the bids, the contracting officer noticed that on item No. 35,
calling for "Ultratag RBC, 5 vial/kit 171 EA," Amersham's unit and total
prices were substantially lower than those submitted by Mallinckrodt and the
third bidder. For the base year, Amersham bid a unit price of $42 and a
total price of $7,182. Mallinckrodt's unit and total prices for the base
year were $150 and $25,650, respectively. Agency Report, exh. 3, Amersham's
and Mallinckrodt's bids, at 10. As a result of this disparity, the
contracting officer contacted the Radiology Service, which had requested the
item be purchased, regarding this requirement. The Radiology Service
confirmed that its estimated need was for 171 vials, not 171 kits. Agency
Report, exh. 1, Contracting Officer's Statement. Apparently viewing the
matter as a possible mistake in the bids, the contracting officer
subsequently requested that each bidder clarify its bid by submitting a
price per vial and a price per kit. As a result, the contracting officer
determined that Mallinckrodt's prices and the third bidder's prices were
based on supplying 171 kits with 5 vials per kit, for a total of 855 vials,
while Amersham's prices were based upon supplying 171 vials. [2] Amersham,
in fact, modified the bid schedule to read "171 (34 kt) vial." Using the
price Mallinckrodt advised it would have submitted per vial for No. 35,
which was $30 (one fifth of its $150 per-kit price), the contracting officer
determined the total price the bidder would have submitted for the item and
adjusted Mallinckrodt's bid. This calculation, which lowered Mallinckrodt's
overall price to account for a reduction in the estimated quantity under
item No. 35 from 855 to 171 vials, reduced that firm's original 3-year total
price of $589,552.42 to $527,445.22. Amersham's total 3-year price of
$500,924.40 was unchanged, since the firm had priced based on the 171-vial
estimate for No. 35 that the agency intended. Award was made to Amersham as
the low bidder, and this protest followed.

Mallinckrodt argues that the IFB clearly called for 171 kits, rather than
171 vials, and that prices should have been evaluated accordingly.
Mallinckrodt points out that, had bid prices been evaluated on the basis of
171 kits, Amersham's total evaluated price would have been higher than
Mallinckrodt's total price. That is, if Amersham's per-vial price of $42 is
multiplied by 855 (171 kits of 5 vials each), its overall price would rise
to $591,212.40. Mallinckrodt concludes that the agency's reduction of its
stated needs for item No. 35 in the IFB was improper, and that on the basis
of the IFB terms, Mallinckrodt was the low bidder and should have received
the award.

We believe that the IFB language, "5 vial/kit 171 EA," is unambiguous in
calling for bidders to submit prices for an estimated 171 kits of 5 vials
each, for a total estimated quantity of 855 vials. Where the IFB asked for
prices per vials, it was equally clear. For instance, item Nos. 23 and 24
requested prices for a "Sodium Phosphate P32, 5mCi vial 12 EA" and "Chromic
Phosphate P32, 15mCi vial 1 EA," respectively. IFB at 7-8. Item No. 35 does
not request a price for a vial, but rather a "5 vial/kit." IFB at 10. As
such, there was no mistake in the protester's bid; it correctly bid to the
solicitation's 855-vial estimate and, if the total prices are calculated
based on that quantity, the protester's bid is low.

Based on the agency report, however, we recognize that the solicitation
substantially overstated the quantity of item No. 35 that the agency
actually expects to order. We have no reason to doubt the agency's statement
that it anticipates ordering approximately 171 vials, not 855 vials (171
kits). While Amersham, the incumbent, apparently detected the agency's
error, its solution--altering the solicitation to reduce the quantity to 171
vials--did not correct the error for other vendors and the firm's unilateral
action thus could not form the basis of award. [3]

We have long held that, where a solicitation's quantity estimates are found
to be erroneous, it is generally improper for the contracting agency to
reevaluate existing bids based on corrected estimates that are substantially
different from those that formed the basis of the bidders' competition. See,
e.g., Edward B. Friel, Inc., B-183381, Sept. 22, 1975, 75-2 CPD para. 164 at 10.
Here, the error in the quantity estimate for item No. 35 is so large that
there is no way to predict the impact that correcting it may have on the
prices bid for that or other items being procured. Accordingly, instead of
making an award in these circumstances, the agency should have resolicited
the procurement on the basis of its best estimate of its actual
requirements. While we recognize the potential adverse impact on the
competitive bidding system of resoliciting after prices have been exposed,
here a compelling reason for doing so exists, since the IFB substantially
overstates the anticipated needs of the government. See Deere & Co.,
B-241413.2, Mar. 1, 1991, 91-1 CPD para. 231 at 2.

We recommend that the agency resolicit on the basis of its corrected
requirements. If, as a result, an offeror other than Amersham is selected,
we recommend that Amersham's contract be terminated. In addition, we
recommend that the protester be reimbursed its costs of filing and pursuing
the protest, including reasonable attorneys' fees. 4 C.F.R. sect. 21.8(d)(1)
(1999). Mallinckrodt's certified claim for such costs, detailing the time
expended and the costs incurred, must be submitted directly to the agency
within 60 days after its receipt of this decision.

The protest is sustained.

Comptroller General
of the United States

Notes

1. We note that the solicitation makes reference to past performance as an
evaluation factor. Because the award decision was apparently based solely on
price and the parties treat the solicitation as an invitation for bids, our
decision follows the parties' practice.

2. The third bid was rejected for reasons not relevant here.

3. We note, moreover, that Amersham's "correction" of the solicitation is
problematic, since it refers to 34 kits, which would equal only 170 (not
171) vials.