Nomura Enterprise, Inc.

B-271215 May 24, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights No basis exist to object to the agency's price reasonableness determination of the awardee's bid merely because the price was higher than the protester's intended bid. Bid is not materially unbalanced where there is no evidence that the awardee's bid will not result in the lowest ultimate cost to the government. Alleged oral advice from government official that varies the terms of an unambiguous solicitation is not binding on the agency and may not reasonably be relied upon by potential bidders. That I-NET's bid was mathematically and materially unbalanced. Bidders were required to submit individual line item pricing for eight specified tasks. Unit prices per 100 pages were solicited and estimated units of production were designated. View Decision Matter of: Nomura Enterprise, Inc. File: B-271215 Date: May 24, 1996 No basis exist to object to the agency's price reasonableness determination of the awardee's bid merely because the price was higher than the protester's intended bid. Bid is not materially unbalanced where there is no evidence that the awardee's bid will not result in the lowest ultimate cost to the government. Alleged oral advice from government official that varies the terms of an unambiguous solicitation is not binding on the agency and may not reasonably be relied upon by potential bidders. Attorneys DECISION Nomura Enterprise, Inc. protests the award of a contract to I-NET, Inc. under invitation for bids (IFB) No. A-899-S, issued by the Government Printing Office (GPO), for electronic conversion and Standard Generalized Markup Language (SGML) tagging of technical publications. Nomura contends that the agency made award to I-NET at an unreasonably high price, that I-NET's bid was mathematically and materially unbalanced, and that an IFB amendment and oral advice rendered the specifications ambiguous or defective, which caused Nomura to submit a bid containing a mistake. We deny the protest. The GPO issued the IFB to obtain a contractor to convert paper-based technical publications to electronic text and graphic files with embedded SGML tags for the Department of the Army, Aviation and Troop Command (ATCOM). The IFB contemplated the award of a fixed price requirements contract for a 6-month base period with 2 option years. Bidders were required to submit individual line item pricing for eight specified tasks. For each task line item, unit prices per 100 pages were solicited and estimated units of production were designated, e.g., the estimated units of production for the first line item were 165 (i.e., 16,500 pages). The IFB informed bidders that the low bid would be determined by applying the unit prices offered to the designated units of production stated in the IFB and totaling these line item prices. Amendment No. 1 to the IFB revised the estimated units of production. GPO received seven bids by the August 14 bid opening. The bids ranged from Nomura's low bid of $173,346 to $1,020,925. I-NET submitted the second low bid of $373,163.82. Because Nomura's bid, particularly for the first line item, was very low when compared to the other bids, the agency requested Nomura to verify its bid. Nomura verified its bid on August 22 and the agency awarded Nomura the contract on October 1. On October 15, Nomura advised the agency of a substantial difference between its asserted intended bid price ($277,545) and the government's calculation ($173,346) of its price. Thus, Nomura requested the agency to either reform the contract or rescind it. GPO subsequently determined that Nomura's bid indeed reflected a mistake, but that Nomura had not established its intended bid by clear and convincing evidence. Therefore, on February 6, the agency rescinded the award to Nomura and made award to I-NET. Nomura filed this protest on February 23. [1] Nomura first challenges the award to I-NET on the basis that the price was unreasonably high because I-NET's bid was 35 percent higher than Nomura's alleged intended bid. An agency's determination of price reasonableness is a matter of administrative discretion involving the exercise of business judgment, which our Office will not question unless that determination is clearly unreasonable or there is a showing of fraud or bad faith on the part of the contracting official. See Satin Am. Corp., B-261068, Aug. 16, 1995, 95-2 CPD para. 70; Porter-Cable Corp., B-227401, June 19, 1987, 87-1 CPD para. 618. An agency may select whatever price analysis techniques will ensure a fair and reasonable price, including relying on such factors as government estimates, past procurement history, current market conditions, or any other relevant factors including those which have been revealed by the competition itself. Satin Am. Corp., supra; Porter-Cable Corp., supra.