Grunley Schlosser Joint Venture

B-274012 Oct 24, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Low bid under an invitation for bids calling for a base bid and two options is not materially unbalanced where there is no basis to conclude that the bid contains significantly overstated prices for the base bid such that it could be considered mathematically unbalanced. Base bid which is less than. Than the government's estimate or the protester's next low bid is not so front-loaded as to be tantamount to an improper advance payment that would require rejection of the bid. Grunley Schlosser argues that Morse Diesel's bid should have been rejected as unbalanced. The renovation is to proceed in several phases while the buildings remain partially occupied. Bidders were required to provide a total price for a base bid. View Decision Matter of: Grunley Schlosser Joint Venture File: B-274012 Date: October 24, 1996 Low bid under an invitation for bids calling for a base bid and two options is not materially unbalanced where there is no basis to conclude that the bid contains significantly overstated prices for the base bid such that it could be considered mathematically unbalanced. Base bid which is less than, two times greater, than the government's estimate or the protester's next low bid is not so front-loaded as to be tantamount to an improper advance payment that would require rejection of the bid. Attorneys DECISION Grunley Schlosser Joint Venture protests the award of a contract to Morse Diesel International, Inc. under invitation for bids (IFB) No. GS-11P-96- MKC-0015, issued by the General Services Administration (GSA) for modernization of the Interstate Commerce Commission (ICC)/U.S. Customs Service (USCS) buildings complex in Washington, D.C. Grunley Schlosser argues that Morse Diesel's bid should have been rejected as unbalanced. We deny the protest. The IFB, issued May 16, 1996, contemplated the award of a firm, fixed- price contract for the modernization of the ICC building, the USCS building and a connecting wing building. The renovation is to proceed in several phases while the buildings remain partially occupied. Bidders were required to provide a total price for a base bid, option 1 and option 2. The base bid includes the replacement of the mechanical and electrical systems in the connecting wing building and associated work in the ICC building; option 1 includes ICC building modernization, with unit prices for tenant fit-out and phased occupancy of the finished buildings; and, option 2 includes the USCS and connecting wing buildings modernization, with unit prices for tenant fit-out, and phased occupancy of the finished buildings. Unit prices were also solicited for specific line items under options 1 and 2 and for prices for separate options A through L which include additional associated work for the base bid and options 1 and 2. The contract was to be awarded to the bidder who submitted the lowest total bid, computed by adding the base bid, option 1 with associated unit prices, option 2 with associated unit prices and options A through L. At bid opening on August 7, four bids were received, ranging from Morse Diesel's low bid of $118,900,000 to a high bid of $142,170,128; Grunley Schlosser's bid of $128,409,024 was second low. The government prepared two estimates for the work: a July 23, 1996 estimate which projected a total project cost of $110,098,469, including an estimated base cost of $5,922,558; an August 27 estimate which projected a total project cost of $117,948,337, including an estimated base cost of $13,799,576. The adjusted estimate was primarily based on a comparison to costs at another comparable project and was increased to reflect the more realistic cost of a phased and difficult project and to reflect cost escalation. The adjusted estimate also included three addenda not included in the July 23 estimate. The four bids received were as follows: Morse Grunley Clark Blake Diesel Schlosser Construction Construction Base $ 21,000,000 $ 13,185,000 $ 16,895,000 $ 48,160,000 Option 1 $ 40,000,000 $ 52,052,450 $ 55,000,000 $ 36,607,556 Unit prices Option 1 $ 1,264,131 $ 1,369,550 $ 1,570,145 $ 1,470,444 Option 2 $ 51,900,000 $ 56,463,000 $ 60,000,000 $ 50,397,000 Unit prices Option 2 $ 1,712,391 $ 1,843,024 $ 2,089,940 $ 1,950,128 Options A to L $ 3,023,478 $ 3,496,000 $ 3,887,000 $ 3,575,000 Total $118,900,000 $128,409,024 $139,442,085 $142,170,128 Grunley Schlosser contends that the award to Morse Diesel is improper because Morse Diesel's bid is unbalanced. Specifically, the protester asserts that Morse Diesel's price for the base bid is excessive, and would give Morse Diesel an illegal advance payment [1] or a monetary windfall if the options are not exercised.