Building Construction Enterprises, Inc., B-294784, December 20, 2004

B-294784 Dec 20, 2004 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Building Construction Enterprises, Inc (BCE) protests the award of a contract to David Boland, Inc. by the U.S. Army Corps of Engineers under invitations for bids (IFB) No. W912DQ-04-B-0011 for the construction of the Combined Arms Collective Training Facility at Fort Riley, Kansas. BCE contends that the Corps should not have evaluated bidders' option prices. We deny the protest. View Decision B-294784, Building Construction Enterprises, Inc., December 20, 2004 Decision Matter of: Building Construction Enterprises, Inc. File: B-294784 Date: December 20, 2004 Kendall Schoonover for the protester. Denis L. Durkin, Esq., and Edgar Stanton, Esq., Baker & Hostetler, for David Boland, Inc., the intervenor. Capt. Joseph V. Fratarcangeli, and Roger Christopher Paden, Esq., Department of the Army, for the agency. Katherine I. Riback, Esq., and Guy R. Pietrovito, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Agency properly awarded contract based on evaluation of base and optional items, where invitation for bids informed bidders that option items would be evaluated and there was not reasonable certainty that the funds would be unavailable to permit the exercise of the options. DECISION Building Construction Enterprises, Inc (BCE) protests the award of a contract to David Boland, Inc. by the U.S. Army Corps of Engineers under invitations for bids (IFB) No. W912DQ-04-B-0011 for the construction of the Combined Arms Collective Training Facility at Fort Riley, Kansas. BCE contends that the Corps should not have evaluated bidders' option prices. We deny the protest. The IFB sought bids for the construction of a combined arms collective training facility, an urban assault course, an offensive defensive building, live fire shoot house, a breach facility, and airfield buildings. The IFB included five option items, including Option 2 for bituminous paving for a landing zone and concrete runaround and Option 3 for concrete paving of the same landing zone and concrete runarounds. Bidders were informed that Options 2 and 3 were mutually exclusive and that only one of these two options would be exercised. IFB amend. 1, at 4. The IFB also included the standard "Evaluation of Options" clause, Federal Acquisition Regulation (FAR) 52.217-5, which provides as follows: 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 at 12. The IFB also included a Notice of Price Evaluation Preference for Historically Underutilized Business Zone (HUBZone) Small Business Concerns, FAR 52.219-4, which provides that for evaluation purposes the agency would add 10 percent to the price of all bids, except bids from HUBZone small business concerns and otherwise successful bids from small business concerns. IFB at 12-13. At bid opening, the agency received five bids, including those of BCE (a large business), David Boland, Inc. (a HUBZone small business concern), and MW Builders (a large business). After applying the HUBZone price evaluation preference the agency determined that David Boland had submitted the low bid with an evaluated price of25,117,000, that MW Builders had submitted the second low bid with an evaluated price of $25,528,800, and that BCE's bid, with an evaluated price of $26,110,795, was third low. Contracting Officer's Statement at 3. The agency awarded the contract to David Boland, and this protest followed. BCE argues, citing FAR 17.206(b), [1] that the contracting officer should not have evaluated bidders' option pricing, because he could not confirm that "funds are currently available or will be available for any or all of the options." Comments at 2. Where, as here, the IFB includes a provision requiring the evaluation of options, such options must be evaluated "[e]xcept when it is determined in accordance with FAR 17.206(b) not to be in the government's best interest." FAR 52.217-5; Contractors NW, Inc. , B-293050, Dec. 19, 2003, 2003 CPD 232 at 4. The only example presented in FAR 17.206(b) of a circumstance that would permit the agency to not evaluate option prices, where a solicitation provides for such an evaluation, is where there is reasonable certainty that funds will not be available to permit the exercise of the option. Here, the contracting officer states that he intended to exercise options at the time of contract award if bid prices were low enough to permit him to do so.