B-298609, Miramar Construction, Inc., October 31, 2006

B-298609 Oct 31, 2006 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Miramar Construction, Inc. protests the proposed award of a contract to ERS-JV under invitation for bids (IFB) No. W912PL-06-B-0008, issued by the U.S. Army Corps of Engineers, Los Angeles District, for the removal and replacement of sewer lagoons in wastewater treatment facilities at the Yuma Proving Ground in Arizona. Miramar primarily argues that the Army improperly permitted ERS-JV to make an upward correction to its apparent low bid. We sustain the protest. View Decision B-298609, Miramar Construction, Inc., October 31, 2006 DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: Miramar Construction, Inc. File: B-298609 Date: October 31, 2006 Alan Dickson, Esq., Paul C. Burkholder, Esq., and Tammy Hopkins, Esq., Epstein Becker & Green, for the protester. Kerry S. Curtis, Esq., U.S. Army Corps of Engineers, for the agency. Tania Calhoun, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Contracting agency's determination to permit bidder to upwardly correct its apparent low bid lacks a reasonable basis where bidder's explanation for alleged mistake is illogical and raises questions as to whether a mistake occurred, and where agency's determination fails to address these questions and relies on mischaracterizations of the bidder's explanation. DECISION Miramar Construction, Inc. protests the proposed award of a contract to ERS-JV under invitation for bids (IFB) No. W912PL-06-B-0008, issued by the U.S. Army Corps of Engineers, Los Angeles District, for the removal and replacement of sewer lagoons in wastewater treatment facilities at the Yuma Proving Ground in Arizona. Miramar primarily argues that the Army improperly permitted ERS-JV to make an upward correction to its apparent low bid. We sustain the protest. The Army issued the solicitation on May 15, 2006 as a competitive section 8(a) procurement.[1] Bidders were required to provide a separate lump sum price for each of two items, a base requirement to construct and repair existing sewer lagoons at one location, and an option requirement to perform similar work at another location. Award of a fixed-price contract was to be made to the responsible bidder that submitted the lowest responsive bid for the total of both items in the bid schedule. IFB sect. 00010, para. 16. Four firms submitted bids by the June 21 extended closing date. The following table shows the prices submitted and the independent government estimate (IGE): Base Item Option Item Total Bid Firm A $7,696,000 $4,519,000 $12,215,000 Firm B 5,987,980 4,010,337 9,998,317 Miramar 6,391,000 2,976,000 9,367,000 ERS-JV 4,122,900 2,758,900 6,881,800 IGE 7,824,480 2,786,580 10,611,060 ERS-JV's apparent low bid was 26.5 percent below Miramar's apparent second-low bid, and 35.1 percent below the IGE. In light of this pricing disparity, the contract specialist contacted ERS-JV's director and asked him to review the bid and confirm the price for both line items. The contract specialist states that ERS-JV's director told him he thought the firm had made an error but that he would review the bid more thoroughly and get back to the agency. Contract Specialist's (CS) Declaration at 2; Contracting Officer's (CO) Declaration at 2. The next day, ERS-JV's director asked the contracting officer how to request withdrawal of the bid because it had made a –significant mistake in the calculations.— CO Declaration at 2. The contracting officer states that she and the director reviewed the requirements in the Federal Acquisition Regulation (FAR) and Engineer FAR Supplement (EFARS) for requesting bid withdrawal, and that she faxed the director relevant pages from the FAR. Id. Later that same day, ERS-JV's director faxed the contracting officer a letter requesting withdrawal of the bid because he had discovered –arithmetic errors— that materially affected the price. Letter from ERS-JV to CO, June 22, 2006. Attached to the letter were two undated hard copies of electronic spreadsheets and an affidavit from the director in which he claimed responsibility for the –computation of the erroneous amount— in the original bid. Affidavit of ERS-JV's Director, June 22, 2006, para. 4. The first spreadsheet was captioned –original,— and reflected a total bid of $6,881,800. In his affidavit, the director stated that this spreadsheet was used to compute the offered bid, was prepared before bid opening, and had not been altered since then. The second spreadsheet was captioned –extended,— and reflected a total bid of $8,313,086.