South Atlantic Construction Company, LLC, B-286592.2, April 13, 2001

B-286592.2 Apr 13, 2001 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Protest that agency was required to reject bid for failure to satisfy bid guarantee requirement is denied where the amount of the contested bid guarantee was greater than the difference between that firm's bid and next low bid and agency properly decided to waive the requirement. Agency conclusion that award to bidder that proposed relatively high prices for 3 items and relatively low prices for 3 other items listed among 166 items in a solicitation for roofing repair work did not represent an unacceptable risk to the government is unobjectionable where the reasonableness of the estimated quantities to be ordered under the contract is not in question. The awardee's price is lower for the base year. View Decision Matter of: South Atlantic Construction Company, LLC File: B-286592.2 Date: April 13, 2001 DIGEST Attorneys DECISION South Atlantic Construction Company, LLC protests an award by the Army Materiel Command to Phoenix Contracting Services, Inc. under invitation for bids (IFB) No. DAAD05-00-B-7005 for roofing replacement and repairs. South Atlantic asserts that Phoenix's bid should have been rejected as nonresponsive, alleging that Phoenix submitted a defective bid bond and that its pricing was unbalanced. We deny the protest. The IFB, issued as a small business set aside, contemplated the award of a fixed-price requirements contract for roof repairs or replacement for any of the 2,272 buildings located at Aberdeen Proving Ground, Maryland during a 1-year base period with 4 option years. The work that might be required included replacement of existing roofs, either with the existing type of roof or a new type, as well as replacement of shingles or other types of repair work. The IFB included a government estimate of the quantities for the various types of work that would be needed. The IFB required bidders to provide unit prices for 166 separate contract line item numbers (CLIN) for each year, resulting in a total of 830 CLINs for the potential 5-year life of the contract. Each CLIN contained estimated quantities. Bidders were to insert a unit price for each CLIN, which when multiplied by the estimated quantity, resulted in an extended price for each CLIN. The sum of the extended prices comprised the total bid price. Bidders were instructed to guarantee their bids with a bid bond equaling the lesser of either 20 percent of the bid amount or $3,000,000. The agency received five timely bids, of which two were rejected as nonresponsive for failure to acknowledge amendments. Among the three remaining bids, Phoenix's price of $11,893,133.47 was the apparent low bid, while South Atlantic's $12,185,607.02 bid was the second lowest. While reviewing Phoenix's bid, the contracting officer discovered several mathematical errors and pricing inconsistencies. When these were brought to Phoenix's attention, Phoenix declined to make any changes, verifying its bid as submitted. The contracting officer therefore corrected only certain obvious clerical (multiplication) errors in Phoenix's bid that are not at issue here. After these corrections were made, Phoenix's bid price was increased to $11,972,424.75 but remained low. After South Atlantic challenged Phoenix's bid as unbalanced, /1/ the agency analyzed Phoenix's pricing to determine whether an award to Phoenix would likely result in paying unreasonably high prices. The agency applied Phoenix's unit prices to 15 actual delivery orders that had been placed under the previous contract and compared the resulting prices to the amounts that had been paid to the previous contractor. Although the engineer's report states that there were too many variables involved, and too little data, to produce a clear result, Agency Report, Tab I, Engineering Review of Phoenix's Prices, at 5, the contracting officer noted that the prices bid by Phoenix were in most cases very similar to the amounts actually paid under the previous contract. Agency Report, Tab J, Contracting Officer's Summary of Award, at 3. In addition, each bidder's unit prices were compared with the prices submitted by the other bidders. In comparing the 830 separate unit prices in each bid, the contracting officer noted that each bidder has some unit prices that could be considered unbalanced when viewed in relation to all the other prices bid for that particular item. The contracting officer concluded that Phoenix's pricing did not pose an unacceptable risk to the government and therefore should not be rejected. This protest followed. South Atlantic alleges that the bid bond that was submitted with Phoenix's bid was deficient because it lists "conflicting penal sums." Protest at 2.