TNT Industrial Contractors, Inc., B-288331, September 25, 2001

B-288331 Sep 25, 2001 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Agency properly did not consider "deductive items" as part of the total price where funds were available for the entire project. Therefore it should have received the award. The IFB was issued on April 10. Two of the optional CLINs are uncontroversial in this protest: CLIN 0002 covered landscaping extension work and CLIN 0005 covered steel panel fencing work. The remaining two CLINs are at issue here: CLIN 0003 covered the cost of paving the project. " CLIN 0003 and CLIN 0004 were intended to be exercised to scale back the project in the event that funds were not available for the project. /2/ The IFB included the standard Evaluation of Options clause. Which provides: Except when it is determined in accordance with FAR Sec. 17.206(b) not to be in the Government's best interests. View Decision TNT Industrial Contractors, Inc., B-288331, September 25, 2001 DIGEST Attorneys DECISION TNT Industrial Contractors, Inc. protests the intended award of a construction contract to All Cities Enterprises by the Army Corps of Engineers under invitation for bids (IFB) No. DACA05-01-B-0001 for a water treatment plant at Beale Air Force Base in California. TNT contends that the agency failed to evaluate all the line items listed on the IFB pricing schedule as contemplated by the solicitation, and that TNT submitted the lowest aggregate bid, and therefore it should have received the award. We deny the protest. The IFB was issued on April 10, 2001 as a competitive set-aside for eligible firms under the Small Business Administration's (SBA) section 8(a) program. /1/ As amended, the IFB required bidders to complete a pricing schedule by entering lump-sum prices for the basic requirements and for each of the four option items of work, at contract line item numbers (CLIN) 0001, 0002, 0003, 0004, and 0005, respectively. CLIN 0001, the base bid, covered the construction of a new water treatment plant. Two of the optional CLINs are uncontroversial in this protest: CLIN 0002 covered landscaping extension work and CLIN 0005 covered steel panel fencing work. The remaining two CLINs are at issue here: CLIN 0003 covered the cost of paving the project, while CLIN 0004 covered the cost of a new storage tank, rather than salvaging one from the existing facility. Referred to in the record as "deductive options," CLIN 0003 and CLIN 0004 were intended to be exercised to scale back the project in the event that funds were not available for the project. /2/ 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 Sec. 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). /3/ IFB at 15-16. The IFB also included the Contract Award--Sealed Bidding-Construction clause of FAR Sec. 52.214-19, which provides that the agency will award a contract for any line item or combination of line items to the conforming bid found to be the most advantageous to the government, considering only price and price-related factors specified in the IFB. IFB at 15. By bid opening, the Corps had received ten bids, including those of TNT and All Cities, which were the apparent two lowest-priced bids. The breakdown of these bids is as follows: TNT All Cities Base Bid (CLIN 0001) $3,553,636 $3,482,600 CLIN 0002 20,000 69,100 CLIN 0003(deductive) -28,500 33,200 CLIN 0004 (deductive) -42,000 0 CLIN 0005 9,000 9,000 Agency Report (AR), Tab 3. Funding in the amount of $3,800,000 was available for the entire project. Following bid opening, the contracting officer determined that because sufficient funds were available for the complete water treatment facility, in accordance with FAR Sec. 17.206(b), it was in the government's best interests to exclude deductive options 0003 and 0004 to determine the low bidder. In this determination, the contracting officer stated: The option items CLIN 0003 and 0004 are deductive options. If funds were not available for the full basic requirement of the complete water treatment plant, the paving and automatic salt feed system could be replaced by less costly options of no paving and use of the salvaged water storage tank for the demolished plant. After opening of the bids I have determined that funds are available to award the full project to include paving of all surfaces and use of the newly designed automatic salt feed water storage tank as part of the water treatment plant.