TITLE: B-298248; B-298248.2, Triple H Services, August 1, 2006
BNUMBER: B-298248; B-298248.2
DATE: August 1, 2006
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B-298248; B-298248.2, Triple H Services, August 1, 2006

   Decision

   Matter of: Triple H Services

   File: B-298248; B-298248.2

   Date: August 1, 2006

   Pamela Hoyle for the protester.

   William A. Lubick, Esq., U.S. Army Corps of Engineers, for the agency.

   Debra Ransom, B.R. Mowing, Inc., for the intervenor.

   Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest is denied where record fails to support protester's contentions
   that awardee's bid is materially unbalanced or that agency's affirmative
   determination of responsibility for the firm was improper.

   DECISION

   Triple H Services protests the award of a contract to B.R. Mowing, Inc.
   under invitation for bids (IFB) No. W911WN-06-B-0002, issued by the Army
   Corps of Engineers for buildings and grounds maintenance services at
   Berlin Lake, Berlin Center, Ohio. The protester contends that the
   awardee's bid is materially unbalanced and challenges the agency's
   affirmative determination of the awardee's responsibility.

   We deny the protest.

   The IFB, issued on February 19, 2006, contemplated the award of a
   fixed-price requirements contract for building and grounds maintenance
   services, including grass mowing and cleaning services, for a base period
   plus 4 option years; the IFB required that employees be compensated at
   prevailing wage rates during the term of the contract. IFB at 18, 39, 41.
   Five bids were received by the agency. B.R. Mowing, the incumbent
   contractor for the services, submitted the low bid, at $867,243.55; Triple
   H submitted the next low bid, at $1,111,600. Noting that the incumbent's
   bid was also lower than the agency estimate and the firm's prior contract
   price for the work, the agency asked B.R. Mowing to confirm its price.

   B.R. Mowing reported that its bid was accurate and further explained that
   it was able to offer a lower price by performing much of the work itself,
   with only limited subcontracting; the firm also noted its successful
   performance of the same work for the last 5 years to demonstrate its full
   understanding of the requirements and confirmed that it was prepared to
   meet those requirements at the price it bid for the work. In response, the
   agency asked for additional information regarding, for instance, the
   firm's anticipated direct labor and indirect costs. B.R. Mowing submitted
   bid workpapers and an explanatory narrative identifying some wage rates it
   stated were used in calculating the firm's bid; in its narrative, the firm
   further explained that, as the incumbent contractor, it had full knowledge
   of the work, already owned the required equipment, and anticipated
   limiting overall labor costs by doing much of the work itself with family
   members and a current employee.

   The agency reports that it found B.R. Mowing's bid acceptable, since the
   firm twice confirmed the accuracy of its pricing, and also confirmed its
   agreement to the IFB requirement to compensate employees at the prevailing
   wage rates. The agency also considered that the firm's successful
   performance of the same work requirements for the last 5 years showed a
   full understanding of the requirements, and that its favorable preaward
   survey, confirming adequate financial resources and performance
   capability, supported an affirmative determination of B.R. Mowing's
   responsibility. An award was made to the firm; this protest followed.

   Triple H initially contends that the awardee's bid is materially
   unbalanced for significantly understating several line item prices,
   including grass mowing services and certain restroom cleanings. The agency
   responds that Triple H's contention is actually a challenge to an alleged
   below-cost bid and, as such, provides no basis to question the award. We
   agree.

   Unbalanced pricing exists where the price of one or more contract line
   items is significantly overstated, despite an acceptable total evaluated
   price (typically achieved through underpricing of one or more other line
   items). See Federal Acquisition Regulation sect. 15.404-1(g)(1); Ken Leahy
   Constr., Inc., B-290186, June 10, 2002, 2002 CPD para. 93 at 2. The
   protester has made no such showing here; rather, Triple H contends that
   award to B.R. Mowing is improper because the awardee's price is too low.
   With regard to this contention, it is well settled that a bidder may, in
   an exercise of its own business judgment, properly decide to submit a
   price that is extremely low, including below-cost prices. See
   Brewer-Taylor Assocs., B-277845, Oct. 30, 1997, 97-2 CPD para. 124 at 4.
   Moreover, there is no prohibition against a procuring agency's acceptance
   of a below-cost bid for a fixed-price contract; fixed-price contracts
   generally are not subject to adjustment during contract performance, so
   the bidder, not the agency, will bear any resulting financial risk,
   including a low profit margin. See Brewbaker White Sands JV, B-295582.4,
   Oct. 5, 2005, 2005 CPD para. 176 at 6, n. 3. Since the acceptance of a
   below-cost bid is legally unobjectionable, we have no basis to consider
   this aspect of Triple H's protest further.

   Triple H next challenges the agency's affirmative determination of B.R.
   Mowing's responsibility, alleging that the agency failed to consider
   available information that Triple H believes should have led to a negative
   responsibility determination. Specifically, the protester contends that
   the agency should have held against B.R. Mowing the fact that, in its
   response to the agency's post-bid opening inquiry, the firm asserted that
   it would pay certain wage rates which are, according to Triple H, lower
   than the wage rates that will be required during contract performance. The
   protester also alleges that the agency failed to consider that B.R. Mowing
   was recently required to pay back wages to employees under its incumbent
   contract.

   Our Office will not review challenges to an agency's affirmative
   determination of responsibility except for limited circumstances,
   including where evidence raises serious concerns that, in reaching a
   particular determination, the contracting officer unreasonably failed to
   consider available relevant information or otherwise violated statute or
   regulation. Bid Protest Regulations, 4 C.F.R. sect. 21.5(c) (2006). The
   protest here does not meet the standard for invoking our review of the
   agency's responsibility determination.

   First, while the protester alleges that the agency failed to consider the
   awardee's reference to certain allegedly noncompliant wage rates in its
   post-bid opening statements to the agency, a bidder may remain eligible
   for award even if lower wage rates than those required by a prevailing
   wage rate determination are offered by the firm where the firm accepts
   (and is therefore obliged to meet) a requirement to compensate employees
   at prevailing rates, and the firm is otherwise determined to be
   responsible (in this case, on the basis of a positive preaward survey).
   See Stanley Aviation, Inc., B-256650, July 14, 1994, 94-2 CPD para. 23 at
   4-5. Second, while the protester asserts that the agency ignored the fact
   that the awardee recently had to pay back wages under its current
   contract, the record is clear that the agency reasonably considered the
   information. As the agency reports, B.R. Mowing promptly paid the back
   wages it was found to owe under its prior contract, and the matter was
   resolved to the government's satisfaction. The record thus shows that the
   agency gave reasonable consideration to the information the protester
   contends it failed to review; accordingly, the protester has failed to
   present a sufficient basis to question the propriety of the agency's
   affirmative determination of responsibility and award. See Government
   Contracts Consultants, B-294335, Sept. 22, 2004, 2004 CPD para. 202 at 2.

   The protest is denied.

   Gary L. Kepplinger

   General Counsel