TITLE: B-298454, Staab Construction Corp., September 26, 2006
BNUMBER: B-298454
DATE: September 26, 2006
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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