Kruger Construction, Inc., B-286960, March 15, 2001

B-286960 Mar 15, 2001 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Except where it was not in the best interests of the government. Option items Nos. 4 and 5 were as follows: Option Item No. 4. Bidders were instructed to bid on all line items. /1/ The IFB included the standard Evaluation of Options clause. Which provides: Except when it is determined in accordance with FAR 17.206(b) not to be in the Government's best interests. The Government will evaluate offers for award purposes by adding the total price for all options to the total price for the basic requirement. Evaluation of options will not obligate the Government to exercise the option(s). Which provides that for evaluation purposes the agency would add 10 percent to the price of bids from other than SDB concerns (and other bid categories that are not relevant to this case). View Decision Matter of: Kruger Construction, Inc. File: B-286960 Date: March 15, 2001 DIGEST Attorneys DECISION Kruger Construction, Inc. protests the intended award of a contract to Danco Contractors, Inc. under invitation for bids (IFB) No. 8273-3K15-00, issued by the Agricultural Research Service, Department of Agriculture, for construction services at the Plum Island Animal Disease Center, Greenport, New York. Kruger argues that it offered the lowest evaluated price for the actual work to be performed, after proper application of the evaluation preference for small disadvantaged business (SDB) concerns. We sustain the protest. The IFB provided for the award of a contract for one basic item--the construction of a new power plant at the Plum Island Animal Disease Center--with five option items covering additional services. Option items Nos. 4 and 5 were as follows: Option Item No. 4-- Hazardous material abatement and demolition of Building 103. Option Item No. 5-- Same as Option Item No. 4 above except include crushing building rubble (concrete and CMU) and stockpiling on the island in lieu of removal from the island. IFB Sec. B.2. Bidders were instructed to bid on all line items. /1/ The IFB included the standard Evaluation of Options clause, Federal Acquisition Regulation (FAR) Sec. 52.217-5, which provides: Except when it is determined in accordance with FAR 17.206(b) not to be in the Government's best interests, the Government will evaluate offers for award purposes by adding the total price for all options to the total price for the basic requirement. Evaluation of options will not obligate the Government to exercise the option(s). IFB Sec. M.2. The IFB also included a Notice of Price Evaluation Adjustment for SDB Concerns, FAR Sec. 52.219-23, which provides that for evaluation purposes the agency would add 10 percent to the price of bids from other than SDB concerns (and other bid categories that are not relevant to this case). IFB Sec. I.11. The IFB also incorporated by reference the Contract Award--Sealed Bidding--Construction clause of FAR Sec. 52.214-19, which provides that the agency will award a contract to the conforming bid found to be most advantageous to the government, considering only price and price-related factors specified in the IFB. IFB Sec. L.1. At bid opening, Agriculture received nine bids, including those of Kruger (an SDB concern) and Danco Contractors (not an SDB concern), which were the apparent two lowest-priced bids. As verified, Danco's and Kruger's bids were as set forth in the table on the following page: /2/ Danco Kruger Base item $10,942,000 $11,263,503 Option item No. 1 883,960 1,185,305 Option item No. 2 31,310 69,000 Option item No. 3 86,690 126,620 Option item No. 4 580,630 939,148 Option item No. 5 535,630 919,148 TOTAL $13,060,220 $14,502,724 Legal Memorandum at 4. To account for Kruger's SDB preference, Agriculture added 10 percent ($1,306,022) to Danco's total bid price indicated above (which included both its option item Nos. 4 and 5 prices) to calculate an evaluated price of $14,366,242. Because Danco's evaluated total bid price was still lower than Kruger's $14,502,724 bid price, the agency determined that Danco should receive award of the contract. This protest followed. Contract award has not been made pending our decision in this matter. The crux of Kruger's protest is that Agriculture erred in adding the firms' prices for all option line items to the basic line item prices to determine the total evaluated bid price, because, as the agency acknowledges, Agriculture cannot exercise both option item Nos. 4 and 5, inasmuch as they are alternate options. Protest at 4-5; Legal Memorandum at 2. Kruger states that under any reasonable evaluation that considered the firms' prices to perform the work for either option item No. 4 or option item No. 5, Kruger's evaluated bid price would be lower than Danco's evaluated price (after adjustment for Kruger's SDB evaluation preference).