TITLE: B-298454, Staab Construction Corp., September 26, 2006
BNUMBER: B-298454
DATE: September 26, 2006
******************************************************
B-298454, Staab Construction Corp., September 26, 2006
Decision
Matter of: Staab Construction Corp.
File: B-298454
Date: September 26, 2006
Carl A. Sinderbrand, Esq., Axley Brynelson, LLP, for the protester.
Mark G. Garrett, Esq., Department of Agriculture, for the agency.
Nora K. Doolin, Esq., and James Spangenberg, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
An agency is not required to award items for which prices were solicited
under an invitation for bids (IFB), where there was no language in the IFB
that required the award of all bid items and there was only sufficient
funding to award one item.
DECISION
Staab Construction Corporation protests the U.S. Department of
Agriculture's (USDA) proposed award to Miron Construction, Co. of only one
of the two base bid items requested under IFB No. 05-3K15-06, for the
construction of a New Nutrient Management Research Laboratory (NMRL) and
an Animal Holding Facility (AHF).
We deny the protest.
The IFB's bid schedule contained six item numbers. Item No. 1 was a base
bid item for the construction of the NMRL and Item No. 2 was a base bid
item for the construction of the AHF. The other four bid items were
additive items: Item Nos. 3, 5 and 6 were additive items for the AHF
construction and Item No. 4 was an additive item for the NMRL
construction. The IFB did not request a total aggregate bid price. The IFB
stated the estimated cost of construction for the project as $15,000,000
to $17,000,000.
The IFB required bidders to provide a "lump sum" bid for each of the bid
items, including the additives. The IFB incorporated the clause at Federal
Acquisition Regulation (FAR) sect. 52.214-19, which states in pertinent
part, "The Government may accept any item or combination of items, unless
doing so is precluded by a restrictive limitation in the solicitation or
the bid." The IFB also incorporated the clause set forth in Agricultural
Acquisition Regulation (AGAR) sect. 452.236-70, which states in pertinent
part:
The low bidder for purposes of award shall be the conforming responsible
bidder offering the low aggregate amount for the first or base bid item,
plus or minus (in the order priority listed in the schedule) those
additive or deductive bid items providing the most features of the work
within the funds determined by the Government to be available before
bids are opened.
* * * * *
In any case all bids shall be evaluated on the basis of the same
additive or deductive bid items, determined as above provided. The
listed order of priority need be followed only for determining the low
bidder. After determination of the low bidder as stated, award in the
best interest of the Government may be made on the selected first or
base bid item and any combination of additive or deductive items for
which funds are determined to be available at the time of the award,
provided that award on such combination of bid items does not exceed the
amount offered by any other conforming responsible bidder for the same
combination of bid items.
The IFB was amended seven times. The first amendment to the solicitation
followed a pre-bid conference and site visit and incorporated the meeting
notes from the pre-bid conference. Item 21 of the meeting notes stated,
"USDA's intent is to award both base bids." IFB amend. 1, attach. 2, at 3.
None of the other amendments are relevant to this protest.
On June 20, the five bidders' sealed bids were opened. We summarize the
bids received as follows:
+-----------------------------------------------------------------------------+
| | Miron | Odyssey | Staab | Oscar J. | TCI |
| | |International| | Boldt |Architects |
| | | | |Construction| E C Inc. |
|--------------+-----------+-------------+-----------+------------+-----------|
|Item No. 01 |$8,577,180 |$9,609,362 |$8,604,000 |$8,980,000 |$8,912,000 |
|(NMRL) |* | | | | |
|--------------+-----------+-------------+-----------+------------+-----------|
|Item No. 01 + |$9,137,843 |$10,002,362 |$9,204,000 |$9,340,000 |$9,650,000 |
|04 o |* | | | | |
|--------------+-----------+-------------+-----------+------------+-----------|
|Item No. 02 |$8,818,262 |$8,025,000 * |$8,494,000 |$8,480,000 |$9,539,000 |
|(AHF) | | | | | |
|--------------+-----------+-------------+-----------+------------+-----------|
|Item No. 02 + |$9,453,918 |$8,335,000 * |$8,954,000 |$8,780,000 |$10,069,598|
|03 o | | | | | |
|--------------+-----------+-------------+-----------+------------+-----------|
|Item No. 02 + |$10,346,218|$9,327,806 * |$9,827,000 |$9,680,000 |$11,045,766|
|03 + 05 o | | | | | |
|--------------+-----------+-------------+-----------+------------+-----------|
|Item No. 02 + |$11,120,618|$9,874,225 * |$10,352,000|$10,740,000 |$11,922,761|
|03 + 05 + 06 o| | | | | |
|--------------+-----------+-------------+-----------+------------+-----------|
|Item No. 01 + |$17,395,442|$17,634,362 |$17,098,000|$17,460,000 |$18,451,000|
|02 | | |* | | |
|--------------+-----------+-------------+-----------+------------+-----------|
|Item No. 01 + |$11,440,199|$11,851,587 |$11,062,000|$11,600,000 |$12,033,761|
|03 + 04 + 05 | | |* | | |
|+06~ | | | | | |
|--------------+-----------+-------------+-----------+------------+-----------|
|All Item Nos. |$20,258,461|$19,876,587 |$19,556,000|$20,080,000 |$21,572,761|
|01 through 06 | | |* | | |
+-----------------------------------------------------------------------------+
+------------------------------------------------+
+ Item No. 04 is an additive item for the NMRL |
|construction; Item Nos. 03, 05 and 06 are |
|additives for the AHF construction. |
|~ symbolCalculation is to illustrate |
|protester's argument; an award could not be made|
|based on this combination. |
|* Indicates low bidder on that item or |
|combination of items. |
+------------------------------------------------+
Based upon the USDA's allocation of the funds appropriated that were
available for these projects, the total amounts budgeted were $9,014,000
for the NMRL construction and $6,000,000 for the AHF construction. Agency
Report Tab 13, Fact Sheet, at 282. These budget numbers were calculated
prior to bid opening and were indicated to be the upper limits for the
awards of the items covering each of these two construction projects
(including applicable additives). Id. While four of the five bids for base
bid Item No. 1 were within the funding limit, all of the bids submitted
for base bid Item No. 2 exceeded the budgeted amount. Consequently, the
USDA awarded only base bid Item No. 1 to the low bidder for that item,
Miron. This protest followed.
Staab contends that the IFB contemplated that both base bid items would be
awarded and the USDA should either award both base bid items to Staab as
the low aggregate bidder for those items or cancel the IFB. We disagree.
The IFB incorporated FAR sect. 52.214-19, which vested the USDA with the
discretion to make an award of less than all of the items, unless the
solicitation contained express language precluding such an award. Fire
Sec. Sys., Inc., B-284147, Feb. 23, 2000, 2000 CPD para. 31 at 3. Because
no "all or none" or similar language precluding an award of less than both
base bid items was contained in the IFB or any bid, the agency had the
discretion to make award of only Item No. 1. Id. The agency's discretion
to award less than all of the items for which prices were solicited, based
upon the funds determined available as of the award, was also recognized
in AGAR sect. 452.236-70, which was also incorporated in the IFB.
Staab nevertheless references the language at item 21 in Amendment No. 1,
which stated the agency's "intent" to award both bid items, and contends
that this requires the agency to either award both items or cancel the
IFB. This stated intent is insufficient to override the specific
reservation to award less than the total line items contained in FAR sect.
52.214-19. Rather, the agency's expression of a plan or intention merely
signifies the agency's expectations and does not create a legal
obligation. See Fire Sec. Sys. Inc., supra; Global Readiness Enters.,
B-284714, May 30, 2000, 2000 CPD para. 97 at 5.
As indicated above, the record confirms that the USDA only had sufficient
funds budgeted to award item No. 1 and consistent with AGAR sect.
452.236-70 determined that Miron was the low bidder and should receive the
award for that item.
Staab asserts that the agency's low bid determination was inconsistent
with AGAR sect. 452.236-70, contending that the clause required that all
additive items (even those only applicable to Item No. 2) be considered in
addition to base bid Item No. 1 to determine the low bidder, and that
since the USDA had $15,014,000 ($6,000,000 + $9,014,000) in funding
available for an award under this IFB, Staab should have been determined
the low bidder when its Item No. 1 price is added to all of the additives'
prices. To be reasonable, an interpretation of a solicitation must be
consistent with the solicitation when read as a whole and in a reasonable
manner. Southwest Educ. Dev. Lab., B-298259, July 10, 2006, 2006 CPD para.
105 at 4. Considering the fact that Item Nos. 3, 5, and 6 are additives to
base bid Item No. 2 and cannot possibly be built without the AHF facility
being built, Staab's proffered interpretation of this clause makes no
sense. Moreover, contrary to Staab's hypothesis, the record shows that
only $9,014,000 is available for award of base bid Item No. 1 and the
applicable additives.
The protest is denied.
Gary L. Kepplinger
General Counsel