Contractors Northwest, Inc., B-293050, December 19, 2003

B-293050 Dec 19, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Work was apportioned among contract line item numbers (CLIN) for "base items" (CLINs 001 through 005) and "optional items" (CLINs 006 through 0016). Bidders were instructed to "quote on all items in this [IFB]" and were advised that the evaluation of bids would be based "upon the total price quoted for all items.". The IFB also contained two clauses concerning the evaluation of optional items that are pertinent here: 52.217-4 EVALUATION OF OPTIONS EXERCISED AT TIME OF CONTRACT AWARD (JUN 1988) Except when it is determined in accordance with [Federal Acquisition Regulation (FAR)] [Sec.] 17.206(b) not to be in the Government's best interests. The Government will evaluate the total price for the basic requirement together with any option(s) exercised at the time of award. 52.217-5 EVALUATON OF OPTIONS (JUL 1990) (a) Except when it is determined in accordance with FAR [Sec.] 17.206(b) not to be in the Government's best interests. View Decision Contractors Northwest, Inc., B-293050, December 19, 2003 DIGEST Attorneys DECISION Contractors Northwest, Inc. (CNI) protests the award of a contract to Ohno Construction Co. by the Army Corps of Engineers under invitation for bids (IFB) No. DACW67-03-B-0011 for the construction and modernization of the Riley Creek Campground in Idaho. We deny the protest. The IFB, issued on June 6, 2003, anticipated award of a fixed-price contract for labor, materials, and equipment to renovate campsites and related facilities. Work was apportioned among contract line item numbers (CLIN) for "base items" (CLINs 001 through 005) and "optional items" (CLINs 006 through 0016). Bidders were instructed to "quote on all items in this [IFB]" and were advised that the evaluation of bids would be based "upon the total price quoted for all items." The IFB also stated that award would be made on an "all or none" basis. IFB Sec. 00100 at 16. However, the IFB also provided that optional items could be exercised "at any time, or not at all, but no later than 180 calendar days after receipt by the Contractor of notice to proceed." IFB, Special Clause 1.1(a). The IFB also contained two clauses concerning the evaluation of optional items that are pertinent here: 52.217-4 EVALUATION OF OPTIONS EXERCISED AT TIME OF CONTRACT AWARD (JUN 1988) Except when it is determined in accordance with [Federal Acquisition Regulation (FAR)] [Sec.] 17.206(b) not to be in the Government's best interests, the Government will evaluate the total price for the basic requirement together with any option(s) exercised at the time of award. 52.217-5 EVALUATON OF OPTIONS (JUL 1990) (a) 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). IFB Sec. 00100 at 16. In advance of issuing the IFB the contracting officer did not make a written determination that it was reasonably likely that options would be exercised. The agency anticipated that the cost of the project would be approximately $3.1 million. At a pre-bid site visit, however, CNI and other bidders were informed that the total funding available for the project was approximately $2.4 million. The agency concedes that it did not have sufficient funds in the current fiscal year to cover the entire project, but asserts that this is why it included some work as optional items in the IFB; it had requested additional funds from Congress and anticipated receiving funds sufficient to cover these optional items within 180 days of contract award. CNI and Ohno submitted bids in response to the IFB. Bids were opened on July 17 and revealed the following prices: . CNI Ohno Base $2,077,375 $2,139,790 Options $1,562,626 $1,263,550 Total $3,640,001 $3,403,340 Contracting Officer's Statement Para. 9. One day after bid opening (on July 18), a Senate staff person notified the agency that "it looks as if we succeeded in securing" an additional $2.2 million for the project. AR, Tab 7, E-mail from Senate to agency (July 18, 2003). This amount, together with the funds already programmed for the project (which were now $1.6 million due to reductions for costs incurred to support the project), exceeded the total anticipated cost to the government. As a result, the contracting officer asserts that she had "every reason to believe that all options will be exercised within 180 day[s]," as contemplated under the IFB. Agency Report (AR), Tab 15, Memorandum for Record (Sept. 8, 2003). The agency thus considered all base and optional items in determining the low bidder. On August 6, award was made to Ohno for the base items.