EDL Construction, Inc., B-281499, February 12, 1999

B-281499 Feb 12, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Determination to cancel invitation for bids after bid opening is unobjectionable where the agency could not find reasonable the sole bid submitted because it was significantly higher than the government estimate. 334 was the only one received by the agency. /1/ After bid opening. 334 was $142. The agency determined that the scope of the work had changed since the IFB was issued. The PERC project is a system to pump treated effluent back to Mexico in the event of a failure of the South Bay Ocean Outfall. The Commission determined that the changed requirements are material and will have a significant cost impact. The Commission canceled the IFB on the basis that only one bid was received and the contracting officer could not determine the reasonableness of the bid price and. View Decision Matter of: EDL Construction, Inc. File: B-281499 Date: February 12, 1999 DIGEST Attorneys DECISION EDL Construction, Inc. protests the cancellation after bid opening of invitation for bids (IFB) No. 98-04, issued by the United States Section of the International Boundary and Water Commission (Commission), for various improvements at the South Bay International Wastewater Treatment Plant (SBIWTP) in San Diego County, California. The Commission rejected EDL's bid, the only one submitted, and plans to resolicit the requirement under a revised solicitation. We deny the protest. The IFB, issued as a total small business set-aside on June 8, 1998, contemplated the award of a fixed-price contract for various improvement projects at the SBIWTP, including: installation of a 30-inch emergency sewer connection replacement, demolition of existing piping and isolation valve, and grading improvements; installation of an 18-inch gravity sewer pipe; installation of access ladders and platforms for five influent pumps; repair of existing security gate no. 5; and installation of gate control improvements at gate nos. 2, 3 and 4. The IFB requested a single price for all of the work. At bid opening on August 20, EDL's bid of $974,334 was the only one received by the agency. /1/ After bid opening, the agency contacted the other bidders on the bidder's mailing list to determine why they had not submitted bids. Some firms had been unable or unwilling to bid, others cited repeated delays in the procurement process. The agency also conducted a price analysis to determine the price reasonableness of EDL's bid. The agency reviewed its independent government estimate (IGE) of $832,200 and, after finding its estimate reasonable and fair, noted that EDL's price of $974,334 was $142,134 or 17 percent higher than the government estimate. Based on the significant difference between EDL's bid and the government's estimate, the contracting officer concluded that she could not find EDL's price reasonable. Additionally, the agency determined that the scope of the work had changed since the IFB was issued. In particular, the agency no longer requires the repair of gate no. 5, but instead requires a wider entrance road on the south side of the grit bin storage area, and construction of the Primary Effluent Return Connection (PERC) Project. The PERC project is a system to pump treated effluent back to Mexico in the event of a failure of the South Bay Ocean Outfall. The Commission determined that the changed requirements are material and will have a significant cost impact. By revising the specifications, the agency also anticipates cost savings in certain contract administration services. On October 21, pursuant to FAR Sec. 14.404-1(c)(6), the Commission canceled the IFB on the basis that only one bid was received and the contracting officer could not determine the reasonableness of the bid price and, pursuant to FAR Sec. 14.404-1(c)(2), because the specifications required revision. The agency determined to cancel and resolicit the requirement, so notified the protester on November 5, and this protest to our Office followed. In its protest, EDL challenges, in essence, the validity of the Commission's position that the needs have changed in a manner which requires revising the IFB specifications, and the propriety of the agency's conclusion that the protester's bid price cannot be determined reasonable. Specifically, EDL asserts that the PERC project "was not needed to complete this project as defined in the [Commerce Business Daily] or [a] project requirement at time of BID." Comments at 3. EDL also questions the Commission's failure to examine EDL's worksheets and argues that its bid was only 14.6 percent higher than the IGE. EDL argues that the agency improperly failed to promptly notify the protester of the cancellation and argues that the agency led the protester to believe that, because only one bid had been received, the agency would convert the IFB to a negotiated procurement and conduct discussions with EDL.