Alice Roofing & Sheet Metal Works, Inc., B-283153, October 13, 1999

B-283153 Oct 13, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protest that agency improperly exercised option is denied where agency reasonably determined that exercising the option was the most advantageous means of satisfying the agency's needs. Alice Roofing claims the agency improperly determined that exercise of the option was the most advantageous method of satisfying its needs. Was awarded under request for proposals (RFP) No. The minimum amount of work to be ordered under the contract was $500. 000 and the estimated project amount was between $10. The protester argues that the decision to exercise the second option was improper because (1) the quantities ordered under American Roofing's contract are substantially below the estimated quantities in the original RFP. View Decision Matter of: Alice Roofing & Sheet Metal Works, Inc. File: B-283153 Date: October 13, 1999 DIGEST Attorneys DECISION Alice Roofing & Sheet Metal Works, Inc. protests the Department of the Air Force's decision to exercise the second option under American Roofing & Metal Co., Inc.'s contract No. F41691-97-D-0015, for roofing repair and replacement at Randolph Air Force Base (AFB), San Antonio, Texas. Alice Roofing claims the agency improperly determined that exercise of the option was the most advantageous method of satisfying its needs. We deny the protest. American Roofing's contract--fixed-price, indefinite-delivery, indefinite-quantity for a base year, with two 1-year options--was awarded under request for proposals (RFP) No. F41691-97-R-0007. Contracting Officer's Statement at 1; RFP at 1. The minimum amount of work to be ordered under the contract was $500,000 and the estimated project amount was between $10,000,000 and $25,000,000. RFP at 1-2. On June 23, 1998, the agency exercised the first option under the contract, Agency Report at 2, and on June 21, 1999, the agency exercised the second option, the subject of the current protest. Agency Dismissal Request at 2. The protester argues that the decision to exercise the second option was improper because (1) the quantities ordered under American Roofing's contract are substantially below the estimated quantities in the original RFP, such that different prices could be anticipated under a new solicitation stating accurate quantities; /1/ and (2) the agency did not conduct an adequate market survey or otherwise test the market to determine whether exercising the option was the most advantageous means of meeting the requirement. Protest at 1. These arguments are without merit. First, while the agency does not dispute that the quantities ordered under American Roofing's contract were well below the estimated quantities, we fail to see--and the protester does not explain--how that fact should have suggested to the agency that more advantageous prices could be expected from a new solicitation. Rather, it would be more reasonable for the agency to expect that prices for substantially reduced quantities in a new solicitation would be higher than American Roofing's option prices. See Valentec Wells, Inc., B-239498, Aug. 29, 1990, 90-2 CPD Para. 176 at 2-4. The protester recognizes this relationship. See Additional Comments, Sept. 24, 1999, at 3. Thus, to the extent it is relevant here, this consideration actually would tend to support the agency's determination that a solicitation likely would not result in lower prices. /2/ Turning to the second allegation, before an option can be exercised, an agency must make a determination that exercise of the option is the most advantageous method of fulfilling its needs, price and other factors considered. Federal Acquisition Regulation (FAR) Sec. 17.207(c)(3). This determination must be based on one of the following findings: (1) a new solicitation fails to produce a better price; (2) an informal market survey or price analysis indicates that the option price is lower; or (3) the time between contract award and option exercise is short enough and the market stable enough that the option price is the most advantageous. FAR Sec. 17.207(d). "Other factors" to be considered include the need for continuity of operations and the cost of disruption of operations. FAR Sec. 17.207(e). The contracting officer is accorded broad discretion in making this determination, and we thus will not question such a determination unless it is shown to be unreasonable or contrary to applicable regulations. Person-Sys. Integration, Ltd., B-246142, B-246142.2, Feb. 19, 1992, 92-1 CPD Para. 204 at 2. The agency reports that the contracting officer based her decision to exercise the option on an "informal analysis of prices or an examination of the market." Agency Report at 3; FAR Sec. 17.207(d). Specifically, the contracting officer considered the following: (1) American Roofing's second year option was the low price received during the original competition, Agency Report, encl.