Quality Inn & Suites Conference Center, B-283468, October 20, 1999

B-283468 Oct 20, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Agency properly canceled a solicitation for lodging and transportation after bid opening where the bid prices were reasonably determined to be unreasonably high because they were well more than twice the prices paid under the predecessor contract and the independent government estimate. Where the protester's bid price was itself considerably higher than the price purportedly established by the protester as reasonable based upon its own market survey. Found that the bids received were unreasonably high based upon the agency's independent government estimate (IGE). Quality Inn argues that its bid was not unreasonably high. Rather the agency's estimate was unreasonably low. An IFB may be canceled after bid opening if the prices of all otherwise acceptable bids are unreasonable. View Decision Matter of: Quality Inn & Suites Conference Center File: B-283468 Date: October 20, 1999 DIGEST Attorneys DECISION Quality Inn & Suites Conference Center protests the cancellation of invitation for bids (IFB) No. DABT57-99-B-0002, issued by the Department of the Army, for lodging and transportation for the School of Cadet Command, Fort Monroe, Virginia. We deny the protest. The IFB required that the contractor provide accommodations located within 5 miles of Fort Monroe. The solicitation also required that the contractor provide transportation to and from certain local airports, bus and train stations and the accommodations upon the arrival and departure of the students attending the school, as well as daily transportation between the accommodations and Fort Monroe. Agency Report, Tab 3, IFB, section C, Performance Work Statement, at 5-7. The IFB provided for the award of a requirements contract for a base period of 1 year with two 1-year options. Id. at B-1, B-2, F-1, I-7, I-8. The agency received two bids. Holiday Inn Hampton Hotel & Conference Center submitted the low bid of $1,853,100, or $58 per room, and the protester submitted a bid totaling $2,315,497, or $74.55 per room. Contracting Officer's Statement at 2; Agency Report, Tab 4, Abstract of Bids. Quality Inn filed a protest with the contracting agency, challenging the responsiveness of Holiday Inn's low bid. Agency Report, Tab 10. The agency did not answer this protest, but found that the bids received were unreasonably high based upon the agency's independent government estimate (IGE), market research, and the prices paid on the predecessor contract, and therefore cancelled the solicitation. Contracting Officer's Statement at 2-3. This protest followed. Quality Inn argues that its bid was not unreasonably high, but rather the agency's estimate was unreasonably low. The protester also questions the results of the agency's market research, and the validity of using the prices paid on the predecessor contract as an aid in determining the reasonableness of the prices bid in response to this IFB. Protest at 4. Quality Inn also argues, as it did in its agency level protest, that the low bid submitted by Holiday Inn should be rejected as nonresponsive. The protester concludes that it should be awarded the contract at its bid price of $2,315,497 ($74.55 per room). An IFB may be canceled after bid opening if the prices of all otherwise acceptable bids are unreasonable. Federal Acquisition Regulation Sec. 14.404-1(c)(6). The determination that prices are unreasonable is a matter of administrative discretion that we will not disturb unless the determination is unreasonable or there is a showing of fraud or bad faith on the part of contracting officials. Howard W. Pence, Inc., B-277735.2, Nov. 21, 1997, 97-2 CPD Para. 150 at 2. An agency may select whatever price analysis techniques will ensure a fair and reasonable price, including relying on such factors as government estimates, procurement history, current market conditions, and any other relevant factors, including those that have been revealed by the competition itself. Nomura Enter., Inc., B-271215, May 24, 1996, 96-1 CPD Para. 253 at 2. We have found, for example, that the cancellation of an IFB was justified where the low responsive bid exceeded the government estimate by as little as 7.2 percent. Building Maintenance Specialists, Inc., B-186441, Sept. 10, 1976, 76-2 CPD Para. 233 at 4. In finding that the bids submitted were unreasonably high, the agency points out that under the predecessor contract, the price paid per room for the base period was $19.50 (for 10,450 rooms), for the first option period was $21.50 (for 11,000 rooms), and for the second option period was $22.50 (for 11,000 rooms). Agency Report, Tab 7, Determination and Findings for Rejection of Bids, at 2. That is, the prices per room bid by Holiday Inn and the protester are more than twice and three times, respectively, the prices paid during the last option year of the predecessor contract.