Aztec Development Co.

B-270275 Feb 21, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Irrespective of whether protester's bid for a fixed-price contract for survey and dredging services may have been mathematically unbalanced. The bid was not materially unbalanced where. Award to the protester would have resulted in the lowest overall cost to the government. Acceptance of the bid would not have led to improper advance payments. Line item No. 0001AA was to "[p]rovide pre-dredge and post-dredge hydrographic surveys". Line item No. 0001AB was to "[p]erform dredging and dispose of dredged material" at an estimated quantity of 10. The contractor was to furnish all labor. The IFB provided that performance of the contract was to be completed within 14 days after the contractor's receipt of the notice to proceed. View Decision Matter of: Aztec Development Co. File: B-270275 Date: February 21, 1996 Irrespective of whether protester's bid for a fixed-price contract for survey and dredging services may have been mathematically unbalanced, the bid was not materially unbalanced where, in view of the short (14-day) contract performance period and the solicitation's payment provisions, award to the protester would have resulted in the lowest overall cost to the government, and acceptance of the bid would not have led to improper advance payments. Attorneys DECISION Aztec Development Co. protests the rejection of its bid as materially unbalanced under invitation for bids (IFB) No. DTCGG1-95-B-3WK331, issued by the Department of Transportation, United States Coast Guard, for survey and dredging services at the entry channel to the United States Coast Guard Station Eatons Neck, Northport, New York. We sustain the protest. The IFB required bidders to submit prices for two line items. Line item No. 0001AA was to "[p]rovide pre-dredge and post-dredge hydrographic surveys"; the bid schedule provided a space for the bidder to enter its lump-sum price for the item. Line item No. 0001AB was to "[p]erform dredging and dispose of dredged material" at an estimated quantity of 10,000 cubic yards; the bid schedule provided spaces for the bidder to enter its unit (cubic yard) price and total (extended) price for the item. The bid schedule also had a space for the bid's total lump-sum price. The contractor was to furnish all labor, material, equipment, supervision, and transportation necessary for the entrance channel dredging. The IFB provided that performance of the contract was to be completed within 14 days after the contractor's receipt of the notice to proceed. The IFB also provided that the government would issue progress payments on a monthly basis, or at more frequent intervals as determined by the contracting officer, to the successful contractor based on the work accomplished within that period. Five bids were received in response to the IFB by bid opening on August 23, 1995. Aztec submitted the apparent low total bid of $112,300, consisting of $69,200 for the required pre/post-dredge hydrographic surveys (line item No. 0001AA) and $4.31 per cubic yard for the required dredging and disposal of dredged materials (line item No. 0001AB). The apparent second low bid (at $122,700, with a bid of $15,700 for line item No. 0001AA and $10.70 per cubic yard for line item No. 0001AB) was rejected as nonresponsive for providing less than the required 90 days for acceptance of the bid. Bristol Construction Corporation submitted the apparent next low bid at $130,000 (with a bid of $10,000 for line item No. 0001AA and $12.00 per cubic yard for line item No. 0001AB). Aztec's bid was rejected as materially unbalanced for grossly overstating its price for line item No. 0001AA (the pre/post-dredge surveys) and offering a nominal price for line item No. 0001AB (dredging and disposal). The agency determined that acceptance of the Aztec bid would be tantamount to allowing an improper advance payment since upon completion of the pre-dredge survey, Aztec could submit an invoice for progress payments amounting, at least, to more than one third (approximately $34,600, or one half of its lump-sum line item 0001AA price) of its total bid price (of $112,300) before it even began dredging. [1] Award was made to Bristol on September 25. This protest followed. Aztec contends that its bid was not unbalanced. Aztec explains that, contrary to "industry practice," the IFB failed to provide a separate line item for a lump-sum price for the "very expensive" mobilization and demobilization costs involved in performing the contract. Aztec states that it chose to include its mobilization/demobilization costs in its lump-sum price for the surveys (line item No. 0001AA), rather than spreading those costs over the course of the contract in the firm's price for the dredging and disposal requirement (line item No. 0001AB). The protester contends that it would have been improper to include its mobilization/demobilization costs in its price for line item No.