B-172716, NOV 18, 1971

B-172716, NOV 18, 1971

BID PROTEST - EVALUATION OF BIDS - ESTIMATED QUANTITIES AFFIRMING PRIOR DECISION DENYING PROTEST AGAINST AWARD OF A CONTRACT TO ANOTHER FIRM. WHILE SUCCESSFUL BIDDER (COHEN) HAS AGREED TO PERFORM ALL NECESSARY WORK AT THE TOTAL BID PRICE AND LIBERTY'S PROPOSAL WOULD INVOLVE EXTRA CHARGES FOR ANY WORK BEYOND THE ESTIMATED QUANTITIES, IT IS APPARENT THAT OVER- RUNS WOULD ONLY INCREASE THE SAVINGS RESULTING TO THE GOVERNMENT FROM ACCEPTANCE OF COHEN'S BID. THIS OF COURSE WOULD NOT BE TRUE SHOULD THERE BE SUBSTANTIAL UNDER RUNS, BUT THIS IS A SINGLE REMOTE POSSIBILITY OUTWEIGHED BY OTHER ADVANTAGES. THE PROTEST IS THEREFORE DENIED.

TO MR ROBERT F. STEEVES:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 18, 1971, REQUESTING RECONSIDERATION OF OUR DECISION OF JUNE 14, 1971, DENYING THE PROTEST OF LIBERTY WRECKING AND BUILDING MATERIALS COMPANY UNDER IFB NO. DC-RLA 1476. YOUR REQUEST RELATES TO THE SECOND AND FOURTH GROUNDS OF THE ORIGINAL PROTEST.

IT IS FIRST SUGGESTED THAT OUR JUNE 14 DECISION DOES NOT PROPERLY ACCOUNT FOR THE SECOND GROUND OF YOUR PROTEST WHICH READS:

"COHEN'S BID IS INCOMPLETE SINCE, WITHOUT UNIT BID PRICES ON THE PART II ITEMS THERE WOULD BE NO BASIS FOR INCREASING OR DECREASING THE CONTRACT PRICE IN THE CASE OF OVER-RUN OR UNDER-RUN ON THE ESTIMATED AMOUNTS OF SUCH ITEMS."

WITH REGARD TO THE POSSIBILITY THAT ACTUAL QUANTITIES UNDER PART II MAY EXCEED THE ESTIMATED QUANTITIES ON WHICH BIDS WERE REQUESTED AND EVALUATED, COHEN HAS AGREED BY ITS BID TO PERFORM ALL NECESSARY WORK AT HIS TOTAL BID PRICE, WHILE LIBERTY'S PROPOSAL WOULD INVOLVE EXTRA CHARGES FOR ANY WORK BEYOND THE ESTIMATED QUANTITIES SHOWN. SINCE COHEN'S TOTAL BID PRICE WAS LOWER THAN THE PRICE BID BY LIBERTY FOR PERFORMING ONLY THE ESTIMATED QUANTITIES, IT IS APPARENT THAT OVER-RUNS IN THE ESTIMATED QUANTITIES WOULD ONLY INCREASE THE SAVINGS RESULTING TO THE GOVERNMENT FROM ACCEPTANCE OF COHEN'S BID.

WE AGREE, HOWEVER, THAT UNDER SOME COMBINATIONS OF WORK UNDERRUNS COULD RESULT IN THE PAYMENT OF A HIGHER PRICE TO COHEN, SINCE COHEN IS ENTITLED TO RECEIVE HIS TOTAL BID PRICE, IRRESPECTIVE OF UNDERRUNS. IN REACHING OUR DECISION OF JUNE 14, HOWEVER, WE RECOGNIZED THAT THIS COULD ALSO OCCUR WHERE BOTH BIDDERS QUOTED UNIT PRICES AND THE ACTUAL QUANTITIES SUBSEQUENTLY FAILED TO MEET THE ESTIMATED QUANTITIES FOR THOSE ITEMS ON WHICH THE SUCCESSFUL BIDDER'S UNIT PRICES WERE LOWER THAN THOSE OF AN UNSUCCESSFUL BIDDER. WE BELIEVE THIS DEMONSTRATES THAT IT IS LITERALLY IMPOSSIBLE TO DEVISE A FORMULA FOR EVALUATING BIDS WHICH WILL GUARANTEE THE LOWEST ULTIMATE COST TO THE GOVERNMENT WHERE UNIT BID PRICES ARE REQUESTED ON ESTIMATED QUANTITIES. IN SUCH PROCUREMENTS WE CAN ONLY EXPECT THE AGENCY TO USE THE BEST ESTIMATES SUGGESTED BY EXPERIENCE, AND HOPE SUCH ESTIMATES PROVE TO BE SUFFICIENTLY REALISTIC SO THAT THE WORK IS IN FACT PERFORMED AT THE LOWEST OBTAINABLE COST TO THE GOVERNMENT.

IN THE PRESENT CASE WE WERE AWARE THAT AN AWARD TO COHEN MIGHT NOT ULTIMATELY RESULT IN THE LOWEST POSSIBLE COST TO THE GOVERNMENT IF SUBSTANTIAL UNDERRUNS OCCURRED IN ONE OR MORE OF THE ESTIMATED CATEGORIES. HOWEVER, WE WERE ALSO AWARE THAT COHEN'S BID WOULD RESULT IN THE LOWEST COST TO THE GOVERNMENT IF THE ESTIMATED QUANTITIES PROVED TO BE CLOSE TO ACTUAL QUANTITIES, OR IF ESTIMATES WERE ON THE LOW SIDE RESULTING IN OVERRUNS, OR IF OVERRUNS AND UNDERRUNS WERE OFFSETTING. THESE LATTER THREE POSSIBILITIES APPEAR TO OUTWEIGH THE SINGLE MORE REMOTE POSSIBILITY OF A SIGNIFICANT UNDERRUN.

WE THEREFORE COULD SEE NO VALID BASIS FOR DEPARTING FROM THE ESTABLISHED RULE THAT BIDS ARE TO BE EVALUATED ON THE BASIS OF SUCH ESTIMATED QUANTITIES AS ARE SET OUT IN THE INVITATION FOR BIDS, AND THAT A CONTRACT SHALL BE AWARDED TO THAT BIDDER WHOSE BID IS LOW WHEN SO EVALUATED.

YOUR REQUEST FOR RECONSIDERATION OF YOUR SECOND GROUND OF PROTEST IS BASED SOLELY ON THE SPECULATIVE PROPOSITION THAT IN THE FINAL ANALYSIS THE COST TO THE GOVERNMENT UNDER THE COHEN BID MIGHT BE GREATER THAN THAT OFFERED BY LIBERTY. SINCE WE CONSIDERED AND REJECTED THIS POSSIBILITY BEFORE RENDERING OUR ORIGINAL DECISION, AND YOU HAVE NOT ADVANCED ANY COMPELLING REASON WHY SUCH REJECTION WAS IN ERROR IN YOUR REQUEST FOR RECONSIDERATION, WE SEE NO BASIS FOR REVERSING THAT PORTION OF OUR ORIGINAL DECISION.

WHILE YOUR REQUEST FOR RECONSIDERATION ALSO CONTENDS THAT AN AWARD TO COHEN WOULD NOT BE IN THE PUBLIC INTEREST, IT IS NOTED THAT IN THE ORIGINAL PROTEST YOU RELATED THIS CONTENTION TO YOUR FIRST AND THIRD GROUNDS OF PROTEST. SUFFICE TO SAY THAT SUPPORT FOR THIS PORTION OF YOUR PROTEST DEPENDS ON A FAVORABLE DECISION ON ONE OR MORE OF THE OTHER GROUNDS, AND SINCE WE HAVE FOUND NO REASON TO MODIFY OUR DECISION AS IT RELATES TO SUCH OTHER GROUNDS, WE SEE NO BASIS FOR CONCLUDING THAT THE AWARD TO COHEN WAS NOT IN THE PUBLIC INTEREST.

ACCORDINGLY, OUR ORIGINAL DECISION DENYING THE PROTEST OF LIBERTY WRECKING AND BUILDING MATERIALS COMPANY MUST BE AFFIRMED.