Glen Mar Construction, Inc.

B-410603 Jan 14, 2015 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Glen Mar Construction, Inc., of Clackamas, Oregon, protests the award of a contract to Facility Defense Consultants, Inc. d/b/a Hanke Constructors, of O'Fallon, Missouri, under invitation for bids (IFB) No. VA260-14-B-0412, which was issued by the Department of Veterans Affairs (VA) for construction of a medical center building. Glen Mar argues the agency's evaluation of the bidders' prices was unreasonable because it resulted in award to other than the lowest-priced bidder. We sustain the protest. We sustain the protest. View Decision 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:      Glen Mar Construction, Inc. File:                B-410603 Date:              January 14, 2015 Joaquin M. Hernandez, Esq., and Jeremy T. Vermilyea, Esq., Schwabe, Williamson & Wyatt, for the protester. Brett Hanke for Hanke Constructors, an intervenor. David G. Fagan, Esq., Department of Veterans Affairs, for the agency. Charles W. Morrow, Esq., and Jonathan L. Kang, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that the agency made award to other than the lowest-priced bidder in a sealed bid procurement is sustained where the agency evaluated the bid prices for the base construction project and nine options--which were styled as options but were analogous to additive construction items to be selected at the time of award, or within 120 days of award--even though the record reflects that the agency knew with reasonable certainty that it lacked sufficient funds to purchase all of the additive option items. DECISION Glen Mar Construction, Inc., of Clackamas, Oregon, protests the award of a contract to Facility Defense Consultants, Inc. d/b/a Hanke Constructors, of O’Fallon, Missouri, under invitation for bids (IFB) No. VA260-14-B-0412, which was issued by the Department of Veterans Affairs (VA) for construction of a medical center building.  Glen Mar argues the agency’s evaluation of the bidders’ prices was unreasonable because it resulted in award to other than the lowest-priced bidder. We sustain the protest. BACKGROUND The IFB was issued on July 21, 2014, as a service-disabled-veteran-owned small business set-aside, and anticipated award of a fixed-priced contract for construction of a primary care building at the VA Medical Center in Vancouver, Washington.  See IFB at 1, 7 and 30.  The contractor will be required to complete the work within 545 calendar days of receiving the notice to proceed.  Id. at 18.  The IFB, which incorporated Federal Acquisition Regulations (FAR) clause 52.214-19, Contract Award-Sealed Bidding-Construction, provided for award to the lowest-priced responsible bidder.  IFB at 5. As relevant here, the IFB’s price schedule required bidders to submit unit prices for 10 line items, which reflected a base bid for the construction of the clinic, and 9 additive options, which reflected additional construction features related to the clinic project that the agency might elect to procure.[1]  Id.  With respect to the options, the IFB stated “[a]ny one of the . . . options items may be awarded depending on the available funding,” and that “[p]ricing shall reflect the full scope of each optional item and shall represent only that line item in the event it is exercised at [the] time of award.”  Id. The IFB incorporated by reference FAR clause 52.217-5, Evaluation of Options, which states 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 5; FAR clause 52.217-5. As relevant here, FAR § 17.206(b) states as follows:  (b)  The contracting officer need not evaluate offers for any option quantities when it is determined that evaluation would not be in the best interests of the Government and this determination is approved at a level above the contracting officer.  An example of a circumstance that may support a determination not to evaluate offers for option quantities is when there is reasonable certainty that funds will be unavailable to permit exercise of the option. FAR § 17.206(b). The IFB also included FAR clause 52.217-7, which, as tailored in the solicitation, stated as follows:  The Government may require the delivery of the numbered line item, identified in the Schedule as an option item, in the quantity and at the price stated in the Schedule.  The Contracting Officer may exercise the option by written notice to the Contractor within 120 calendar days.  Delivery of added items shall continue at ...