B-298835, Tessa Structures, LLC, December 14, 2006
Agency’s rejection of protester’s bid based on determination that protester could not perform in the number of days specified in its bid constituted a finding of nonresponsibility--rather than one of nonresponsiveness, as characterized by the agency--which, because protester was a small business, had to be referred to Small Business Administration for certificate of competency review.
Tessa Structures, LLC protests the award of a contract to Fort Myer Construction Co. under invitation for bids (IFB) No. DTFH71-06-B-00014, issued by the Department of Transportation, Federal Highway Administration (FHWA), for bridge‑related repairs. Tessa maintains that the agency improperly rejected its bid as nonresponsive.
The IFB, issued on
Three bids were received by the July 13 opening date. Tessa’s evaluated price of $2,542,730--based
on a bid of $2,278,730 and a performance period of 120 days--was the lowest,
By letter dated July 21, the agency informed Tessa that it
was “very concerned” with the 120-day performance period it had submitted in
its bid. Protest, exh. 2. The letter noted that the other bidders and
the government estimate used longer performance periods, that the heavy volume
of traffic on the highway would limit daily construction time, and that the
construction limitations contained in the solicitation would be strictly
enforced. The letter requested that
Tessa submit a construction schedule and a written explanation of how it expected
to complete all work within the 120-day time period.
Tessa responded by providing the agency with its
preliminary critical path method (CPM) schedule, as well as a list of some of
the assumptions the firm had made in creating the schedule. One of those assumptions was that the firm
would start performance on August 28, and thus be finished by
By letter dated August 3, the agency informed Tessa that its August 28 start date was contrary to the requirements of the IFB, since the performance period “starts with the [n]otice to [p]roceed,” which could occur as late as 104 days after bid opening, that is, October 24. Protest, exh. 4, at 1. According to the agency, Tessa should have used this date as the start date, not August 28. The letter went on to state that Tessa had not shown how it could complete the work in as few as 68 days--from October 24 to January 1, 2007. It further noted that, as stated in the solicitation, liquidated damages (in the amount of $2,200 a day) would be assessed against Tessa once its performance period passed, and concluded by informing Tessa that either it could withdraw its bid or the agency could find the bid nonresponsive.
Tessa responded on August 9, outlining why it believed it could still perform the work even if it could not start the work until October 24. Protest, exh. 5. Tessa explained that it would use a later completion date (December 29), work 7 days a week, work multiple shifts if necessary, and use tents and heating for various aspects of the painting work if inclement weather were encountered. Tessa further stated that it had funds in its bid amount to account for exposure to possible liquidated damages if they should be assessed.
By letter dated September 6, the agency advised Tessa that it was rejecting its bid as nonresponsive. The letter stated that Tessa had failed to address all of the government’s concerns regarding its 120-day schedule, and that this time period was not realistic given the special weather conditions that were to be taken into consideration. The agency further stated that “an assumption that the work can be performed under liquidated damages is a failure to comply with the requirements of the contract.” Protest, exh. 1. This protest followed.
Tessa asserts that its bid did not take exception to the contract requirements and that the agency therefore improperly rejected its bid as nonresponsive. Tessa maintains that the agency’s determination here constitutes a finding of nonresponsibility, and that the agency was required to allow Tessa, a small business, to challenge this determination through the Small Business Administration’s (SBA) certificate of competency (COC) procedures.
Responsiveness concerns whether a bidder has unequivocally
promised, as shown on the face of its bid, to provide the items or services
called for by the material terms of the IFB.
A bid is nonresponsive where it takes exception, or fails to conform, to
the requirements of the IFB. CardioMetrix,
Tessa’s bid was responsive. The only restriction the solicitation placed
on the schedule was that the specified number of days could not exceed 305
days. Since the IFB thus permitted bids
for any performance period shorter than 305 days, Tessa’s bid of a 120-day
performance period was not inconsistent on its face with any IFB requirement. Tessa’s bid also did not take exception to
performing the work consistent with the limitations contained in the
solicitation, including the weather restrictions and the prohibition on certain
tasks between January 1 and
The agency argues that Tessa’s bid was nonresponsive because its specified 120-day performance period was not based on starting from the notice to proceed, as required by the solicitation. This argument is without merit. The IFB did not specify a particular notice to proceed date, and Tessa’s bid did not specify a particular start date. This being the case, Tessa’s bid could not be read as taking exception to any IFB requirements; Tessa’s bid obligated Tessa to perform the contract in a period of 120 days from the notice to proceed, exactly as called for by the IFB.
In our view, the agency’s decision to reject Tessa’s bid clearly was based on considerations relating to whether Tessa would be able to perform the contract in the 120 days specified in its bid. Since, again, rejection of a bid based on a determination that a bidder will not be able to perform as promised in its bid concerns the bidder’s responsibility, we conclude that Tessa was denied the award here based on a nonresponsibility determination.
The agency cites decisions of our Office as holding that
an agency properly may reject a bid as nonresponsive for specifying an
inadequate number of days to complete construction work. The agency misreads our decisions. In Paulsen Constr. Co., B-231393,
Our Office informed FHWA at an outcome prediction alternative dispute resolution (ADR) conference that Tessa’s protest was likely to be sustained for the reasons explained above. FHWA declined to take corrective action in response to the ADR conference, and instead responded by advancing a new legal argument--that Tessa’s bid is materially unbalanced, and, therefore, is unacceptable, because a number of its contract line item prices significantly exceed the awardee’s.
pricing exists when, despite an acceptable total evaluated price, the price of
one or more contract line items is significantly over- or understated, as
indicated by the application of cost or price analysis techniques. FAR sect. 15.404‑1(g)(1).
The mere allegation that a firm has
submitted high line item prices does not establish unbalanced pricing; the
contracting officer also must consider whether the pricing presents a risk to
the government (in particular, that award to the firm will result in the
government’s paying an unreasonably high price for contract performance); a bid
properly may be rejected where the agency determines that the lack of balance pricing
poses an unacceptable risk to the government.
FAR sect. 15.404‑1(g)(2); FAR sect. 14.404-2(g); Burney &
Burney Constr. Co., Inc., B‑292458.2,
Here, the agency presented no evidence that it has
performed a risk analysis; accordingly, there would be no basis for it, or for our
Office, to conclude that award to Tessa would present an unacceptable risk to
the government. Moreover, Tessa’s was
not the only bid with line item prices that significantly exceeded those of
other bids and the government estimate.
We conclude that the agency’s finding that Tessa could not perform within the number of days specified in its bid constituted a determination of nonresponsibility and that, since Tessa is a small business, the agency improperly denied Tessa the award without referring the matter to SBA. Accordingly, we recommend that the agency now refer its determination to SBA for review under the COC procedures. We also recommend that the protester be reimbursed its costs of filing and pursuing the protest, including reasonable attorneys’ fees. 4 C.F.R. sect. 21.8(d)(1) (2006). The protester should submit its certified claim for such costs, detailing the time expended and costs incurred, directly to the contracting agency within 60 days of receiving this decision. 4 C.F.R. sect. 21.8(f)(1).
The protest is sustained.
Gary L. Kepplinger
 While in response to the agency’s questions after bid opening, Tessa indicated that it assumed work would begin on a specific date when it formulated its schedule, Tessa never conditioned its performance on any particular start date. To the contrary, in responding to the agency’s questions, Tessa accepted that the notice to proceed could be issued as late as 104 days after bid opening, and expressly maintained that it nonetheless could perform the contract in the time remaining before January 1.
 Although this procurement was not set aside for small business concerns and Tessa did not identify itself as a small business in its bid, Tessa states that it is a small business for purposes of this procurement and the agency does not assert otherwise. We note that Tessa is registered in the Central Contractor Registration database as a small business under the North American Industry Classification System code applicable to this procurement.
In response to our request for its views, by letter dated