National Projects, Inc., B-283887, January 19, 2000

B-283887 Jan 19, 2000 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Determination to cancel invitation for bids after bid opening is unobjectionable where all bids exceeded the funding allocated for the project. Protest that agency conducted flawed discussions by not informing the protester that its prices were too high is denied where the agency was not required to do so and the record shows that the agency's conduct of discussions was consistent with the regulatory requirement for discussions. NPI also argues that the subsequent discussions were flawed. The estimated construction cost for this project was between $25. Were as follows: Base Bid Total Bid (base + options) NPI $33. Which was $32. Which was significantly above the IGE and the available funding level. View Decision Matter of: National Projects, Inc. File: B-283887 Date: January 19, 2000 DIGEST Attorneys DECISION National Projects, Inc. (NPI) protests the cancellation after bid opening of invitation for bids (IFB) No. DACA63-99-B-0030, issued by the U.S. Army Corps of Engineers, Fort Worth District, for construction of a railhead at Fort Hood in Texas. NPI, the low bidder under the IFB, maintains that the agency had no compelling reason to cancel and convert the IFB to a negotiated procurement. NPI also argues that the subsequent discussions were flawed. We deny the protest. As amended, the IFB contemplated the award of a fixed-priced construction contract for a base bid (line item Nos. 0001 through 0010) and nine options (line item Nos. 0011 through 0019, respectively). IFB amend. 0003. The IFB also stated that the agency reserved the right to exercise the options, "either singularly or in any combination for up to 180 calendar days after award of the Base Bid without an increase in the Offeror's Bid Price." IFB at 00010-7. The estimated construction cost for this project was between $25,000,000 and $50,000,000. Id. at 00100-7. At bid opening on September 17, 1999, the agency received five bids. The bid prices and the independent government estimate (IGE) for the required work, including options, were as follows: Base Bid Total Bid (base + options) NPI $33,836,287 $42,108,745 MW Builders 34,777,000 43,788,000 Hensel Phelps 36,818,000 44,318,000 Bidder 4 38,371,154 48,608,095 Bidder 5 42,707,435 51,471,887 IGE 29,085,016 36,132,802 Supplemental Agency Report, exh. 1, Tab 2. The contracting officer reviewed the bids, which included analyzing the line item prices of each bid, and the IGE. This review revealed an extremely wide disparity among various line item prices and the IGE for those line items; each bid far exceeded the funds available for this project, which was $32,300,000. Supplemental Agency Report, exh. 1, Tab 7. NPI, the apparent low bidder, submitted a total bid of $42,108,745, which was significantly above the IGE and the available funding level. The contracting officer asked the Cost Engineering and Specifications Section to review the IGE for reasonableness and accuracy. The Chief of the Section subsequently confirmed the accuracy of the IGE. Supplemental Agency Report, exh. 1, Tab 4. Since all bids significantly exceeded the IGE and the amount of funds available, the contracting officer decided to reject all bids as unreasonably priced in accordance with Federal Acquisition Regulation (FAR) Sec. 14.404-1(c)(6), and to cancel the IFB. In addition, she decided to complete the acquisition by negotiation consistent with FAR Sec. 14.404-1(f). Supplemental Agency Report, exh. 1, Tab 7. The project requirements were revised, and the revised requirements were issued in request for proposals (RFP) No. DACA63-99-R-0038 on September 21. The amended price schedule in the RFP listed items of work identical to the work specified in the IFB, except that line item Nos. 0003 and 0006 were deleted from the base bid requirements and listed in the RFP as options 10 and 11 (line item Nos. 0018 and 0019, respectively). Additionally, line item No. 0010 under the IFB was renumbered in the RFP as line item No. 0008 and broken into six sub-line items. RFP at 00010-3 - 00010-6. As amended, the RFP also listed price as the only evaluation criterion. RFP amend. 0001, at 00100-4. On September 22, bidders were notified of the rejection of all bids, provided an explanation for the determination, notified of the cancellation and conversion, and furnished a copy of the RFP. /1/ Supplemental Agency Report, exh. 1, Tab 8. Price proposals were received from three of the five original bidders by the September 27 due date. MW Builders submitted the lowest priced offer of [DELETED] for the basic work and [DELETED] for the base plus eleven option requirements, which remained significantly above the IGE and available funding. Supplemental Agency Report, exh. 3. The contracting officer decided to conduct discussions since all three offers exceeded the IGE and the available funding.