TITLE:  Dynamic Corporation, B-296366, June 29, 2005
BNUMBER:  B-296366
DATE:  June 29, 2005
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   Decision

   Matter of: Dynamic Corporation

   File: B-296366

   Date: June 29, 2005

   Robert A. Klimek, Jr., Esq., Klimek, Kolodney & Casale, PC, for the
protester.

   Stephen L. Schwartz, Esq., General Services Administration, for the
agency.

   Kenneth Kilgour, Esq., and Christine Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Compelling reason to cancel invitation for bids (IFB) exists where IFB
contained pricing specifications that were ambiguous and that led to total
prices from bidders that lacked a common basis for comparison.

   DECISION

   Dynamic Corporation protests that the General Services Administration
(GSA) improperly canceled invitation for bids (IFB) No. GS-11P-05-MKC0016,
to provide  construction services at Federal Office Building Number 8 in
Washington, D.C.

   We deny the protest.

   GSA issued the IFB on January 18, 2005 for construction services for the
specified building.  As the first phase of modernization of the building
for use as office space, the IFB calls for demolition and removal of
equipment and structures not intended to be reused.  A major component of
the demolition will be the abatement and in-place management of hazardous
materials associated with the structural components of the building.  IFB
Section 02000, paragraph 1.0.  The IFB called for a lump sum bid for all
the work to be performed, including clean-up of hazardous materials.  The
bidder's price for the hazardous materials services was to be included in
the lump sum bid; bidders were advised to base their prices for these
services on the estimated quantities in the IFB, as verified by the
bidders using the drawings and specifications provided, and by conducting
building inspections.

   In addition to the lump sum bid, bidders were to provide unit prices for
the hazardous materials services; these prices were to be used to adjust
the lump sum

   price (either up or down), if the actual amount of hazardous materials
encountered during performance was either 20 percent higher or 20 percent
lower than the IFB estimates.  The unit prices were to be included in the
evaluation of bids.   IFB

   Section  00120, Part 3 ("The low bidder for purposes of award is the
responsible bidder offering the lowest price for the base bid (consisting
of the lump sum bid and any associated unit price bids extended by the
applicable number of units shown on the bid form).").

   The unit prices for the hazardous materials services were to be entered on
an attachment to the IFB.  The attachment listed 19 categories of
materials (e.g., pipe insulation, sprayed-on fireproofing, vinyl floor
tile).  For six of the categories, the form included spaces for bidders to
enter three unit prices per category, under the headings "Type 1," "Type
2," and "Type 3."  For seven categories, the form included spaces for two
unit prices per category, under the headings "Type 1" and "Type 2."  For
the remaining six categories of materials, the table included space for
only one unit price per material.  The form also listed an estimated
quantity for each material; for those materials for which more than one
unit price was contemplated, the form repeated the estimated quantity
under each of the two or three "types" specified.  An example of one entry
on the attachment is as follows:

   +------------------------------------------------------------------------+
|Code|Material  |Identify Types of Material or |Est.    |Unit|Unit |Total|
|    |          |Removal Method Having         |        |    |Price|Cost |
|    |          |Different Unit Costs          |Quantity|    |     |     |
|----+----------+------------------------------+--------+----+-----+-----|
|PI  |Pipe      |Type 1.                       |2560    |LF  |$    |$    |
|    |Insulation|------------------------------+--------+----+-----+-----|
|    |          |Type 2.                       |2560    |LF  |$    |$    |
|    |          |------------------------------+--------+----+-----+-----|
|    |          |Type 3.                       |2560    |LF  |$    |$    |
+------------------------------------------------------------------------+

   Amendment No. 3, issued February 25, incorporated bidder questions and
agency responses into the IFB.  Question and response 13a stated:

   [Question]  What is meant by Type 1, Type 2, and Type 3 in the Asbestos
Unit Rate Bid Form [the attachment]?  Does it relate to pipe size or
thickness, asbestos type or abatement method?  Without an explanation, the
line items are subject to interpretations, which may be different between
contractors?

   [Response]  The type 1, 2, and 3 designations are intended to provide the
contractor the flexibility to bid different unit rates if he chooses to. 
If the contractor deems it applicable, he can present different rates
based on pipe size, thickness, composition, location, accessibility, or
any other factor that the contractor feels is relevant.

   At bid opening on March 2, GSA received eight bids, and Dynamic was the
low bidder.

   After reviewing the bids, the contracting officer decided that it was
appropriate to cancel the IFB for three reasons.  First, it was not clear
whether bidders were obligated to enter bids for all the unit price items
in the attachment.  As quoted above, the agency, in response to a bidder's
question on this issue, stated that bidders could offer different unit
prices if they deemed them "applicable."  In contrast, Section 10 of the
SF stated that bidders were to "furnish all labor, material, equipment and
supervision for the demolition, abatement and chilled water by-pass" for
the building.  (Emphasis added.)  In fact, three of the eight bidders,
including the protestor, did not enter unit prices for all the types of
materials specified.  The contracting officer determined that the price
evaluation method called for by the IFB, which added all of the unit
prices to arrive at a grand total, did not adequately account for those
bids which did not include unit prices for all material types, and
therefore provided those bidders a possible price advantage. 

   Second, the estimated quantity of work for some types of abatement
services was substantially overstated due to the way in which the
attachment was laid out.  For example, the estimated quantity of work for
each of the three types of pipe insulation abatement was given as 100, for
a total of 300 for all three types, although the actual estimated quantity
was 100 for the three types combined.  Similar overstatements occurred
throughout the attachment.  Although each of the bidders was using the
same incorrect information, the contracting officer reasoned that the
overstated quantities may have produced inaccurate pricing, because
bidders' unit pricing would presumably be lower for larger quantities of
work.

   Finally, the attachment was intended to request pricing information for
abatement  services at various locations within the building, and the form
contained blank spaces for three types of removal which were up to the
bidder to define.  For example, as set out above, under the category "pipe
insulation," the attachment asked bidders to "identify [three] types of
material or removal method[s] having different unit costs."  Some bidders
responded by bidding on different diameter pipes, while others selected
different asbestos containment methods.  Even bidders who chose to bid on
three different pipe diameters did not all choose the same ones. 
Consequently, the individual unit prices varied significantly among the
bidders.  For instance, the average low bid for the three types under pipe
insulation was $3.10, and the average high bid was $16.83, a difference of
over 400 percent.  See Protest, Exhibit B.  Because GSA had not defined
the unit items, but rather left their definition to bidders' discretion,
the contracting officer determined that the unit prices provided by each
bidder could not reasonably be compared to one another.

   For these three reasons, the contracting officer concluded that the IFB
contained inadequate or ambiguous pricing specifications which prevented
bidders from preparing their bids on a common basis.  The contracting
officer thus concluded that the agency had a compelling reason to cancel
the IFB under Federal Acquisition Regulation (FAR) Section
14.404-1(c)(1).  This protest followed.

   Because of the potential adverse impact on the competitive bidding system
of cancellation after bid prices have been exposed, a contracting officer
must have a compelling reason to cancel an IFB after bid opening.  FAR
Section 14.404-1(a)(1).  The contracting officer has the discretion to
determine whether the necessary circumstances exist for canceling a
solicitation, and we will review the decision to ensure that it was
reasonable.  Phil Howry Co., B-245892, Feb. 3, 1992, 92-1 CPD paragraph
137 at 2.  In this regard, the FAR specifically states that an IFB may be
canceled where the agency determines that the IFB contains inadequate or
ambiguous specifications.  FAR Section 14.404-1(c)(1).  Specifications
must be sufficiently definite and free from ambiguity so as to permit
competition on an equal basis.  Hebco, Inc.,

   B-228394, Dec. 8, 1987, 87-2 CPD paragraph 565 at 2.  Ambiguity exists if
a solicitation requirement is subject to more than one reasonable
interpretation when read in the context of the solicitation as a whole.
    United States Elevator Corp., B-225625, Apr.13, 1987, 87-1 CPD paragraph
401 at 4.

   We find that the GSA properly canceled the IFB here because it contained
numerous ambiguities, as a result of which bidders did not prepare their
bids based on a common understanding of the agency's requirements, and
prices could not be compared on an equal basis.  The ambiguities misled
bidders as to the requirement to enter prices for all the unit price items
listed, producing lower total bids for the three bidders who did not bid
on each of the unit prices.  Further, even if every bidder had entered
prices for each unit price item, because, in completing the attachment,
the IFB left to the bidders' discretion the nature of the work that each
bid, the resulting total price for the unit work provided by each of the
bidders did not afford the agency a basis on which to accurately compare
the bid prices.  In addition, as explained above, the way in which the
estimated quantities were listed in the attachment was misleading and
resulted in a substantial overstatement of the estimates, which in turn
likely materially affected the bidders' prices.  The record thus shows
that the lack of clarity in the attachment resulted in bidders competing
on an unequal basis, such that any award based on this IFB would be
prejudicial to the remaining bidders and the government.  This provides
the agency with a compelling reason to cancel the IFB.  Neals Janitorial
Serv., B-276625, July 3, 1997, 97-2 CPD paragraph 6 at 5.

   Dynamic makes a series of other allegations, the thrust of which is that
the contracting official acted in bad faith in canceling the IFB. 
Government officials are presumed to act in good faith, and a protester's
claim that contracting officials were motivated by bias or bad faith must
be supported by convincing proof; our Office will not attribute unfair or
prejudicial motives to procurement officials on the basis of inference or
supposition.  Shinwha Elecs., B-290603 et al., Sept. 3, 2002, 2002 CPD
paragraph 154 at 5 n.6.  The protestor offers no evidence to refute the
record that the IFB cancellation was a result of reasonable concerns that
the ambiguous pricing specifications had yielded total bid prices that 
could not be compared against each other.

   The protest is denied.

   Anthony H. Gamboa
General Counsel