B-159586, SEP. 23, 1966

B-159586: Sep 23, 1966

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THREE BIDS WERE RECEIVED AND OPENED ON MAY 31. THE LOW RESPONSIVE BIDDER WAS GERONIMO SERVICE COMPANY (HEREAFTER GERONIMO). THE INVITATION WAS ACCOMPANIED BY SPECIFICATION NO. 73364/66. AWARD WAS TO BE MADE BASED ON THE AMOUNT BID FOR BID ITEM NO. 1. THAT THE BID FOR BID ITEM NO. 1 IS THE "PRICE FOR THE ENTIRE WORK COMPLETE IN ACCORDANCE WITH DRAWINGS AND SPECIFICATION. SUB-ITEM 1.1 IS DESCRIBED AS "PRICE FOR MOBILIZATION. " AND IS REFERRED TO IN THE SPECIFICATIONS ADDENDUM NO. 1. PAYMENT FOR SUB-ITEM 1.1 WILL BE MADE AS PART OF THE FIRST PARTIAL PAYMENT.'. IT IS STATED AT THE CONCLUSION OF THIS PARAGRAPH: "* * * THIS OPTION. ALLEGEDLY WERE ALREADY MOBILIZED AT THE SITE. GERONIMO'S BID FOR SUB-ITEM 1.1 WAS $5.

B-159586, SEP. 23, 1966

TO ALLIANCE PROPERTIES, INCORPORATED:

WE REFER AGAIN TO YOUR LETTER OF JUNE 28, 1966, IN WHICH YOU REQUEST REVIEW OF A CONTRACT AWARDED TO GERONIMO SERVICE COMPANY BY THE NAVAL AIR STATION, LEMOORE, CALIFORNIA, UNDER INVITATION FOR BIDS NO. NBY 73364.

THE INVITATION, ISSUED ON MAY 5, 1966, COVERED THE FURNISHING OF ALL LABOR MATERIALS, EQUIPMENT, SUPPLIES, TRANSPORTATION AND SUPERVISION NECESSARY TO PERFORM MAINTENANCE, UPKEEP, EMERGENCY AND REPAIR SERVICE FOR 1300 HOUSING UNITS LOCATED AT THE UNITED STATES NAVAL AIR STATION, LEMOORE, CALIFORNIA, FOR A PERIOD OF ONE YEAR. THREE BIDS WERE RECEIVED AND OPENED ON MAY 31, 1966, AND THE LOW RESPONSIVE BIDDER WAS GERONIMO SERVICE COMPANY (HEREAFTER GERONIMO), WITH A BID TOTALLING $217,275. YOUR BID, THE SECOND LOW RESPONSIVE BID, TOTALLED $228,575.

THE INVITATION WAS ACCOMPANIED BY SPECIFICATION NO. 73364/66, AND ADDENDUM NO. 1, ISSUED MAY 26, 1966. AWARD WAS TO BE MADE BASED ON THE AMOUNT BID FOR BID ITEM NO. 1, WHICH CONSISTED OF 45 SUB-ITEMS. SECTION 14 OF THE SPECIFICATIONS PROVIDED, AMONG OTHER THINGS, THAT THE BID FOR BID ITEM NO. 1 IS THE "PRICE FOR THE ENTIRE WORK COMPLETE IN ACCORDANCE WITH DRAWINGS AND SPECIFICATION, (SUMMATION OF SUB-ITEM 1.1 THROUGH 1.45).' SUB-ITEM 1.1 IS DESCRIBED AS "PRICE FOR MOBILIZATION," AND IS REFERRED TO IN THE SPECIFICATIONS ADDENDUM NO. 1, PARAGRAPH 33,"MOBILIZATION. PAYMENT FOR SUB-ITEM 1.1 WILL BE MADE AS PART OF THE FIRST PARTIAL PAYMENT.' FURTHER, PARAGRAPH 1.7.1 OF THE SPECIFICATIONS PROVIDES THE GOVERNMENT WITH AN OPTION TO EXTEND THE TERM OF THE CONTRACT TO JUNE 30, 1968. IT IS STATED AT THE CONCLUSION OF THIS PARAGRAPH:

"* * * THIS OPTION, IF EXERCISED, SHALL BE ON THE PRICE QUOTED FOR BID ITEM NUMBER 1, LESS THE BID PRICE FOR MOBILIZATION AND THE BID PRICE FOR BID SUB-ITEM 1.17 "REPLACEMENT OF SACRIFICIAL ANODES.'"

YOU HAD BEEN PERFORMING SIMILAR MAINTENANCE SERVICES AT THIS HOUSING PROJECT FOR FISCAL YEAR 1966, AND ALLEGEDLY WERE ALREADY MOBILIZED AT THE SITE. NEVERTHELESS, YOU BID $20,000 UNDER SUB-ITEM 1.1 AS YOUR PRICE FOR MOBILIZATION. GERONIMO'S BID FOR SUB-ITEM 1.1 WAS $5,000. YOU NOW CONTEND "THAT THE BIDDING DOCUMENT WAS AMBIGUOUS BECAUSE IT DID NOT ESTABLISH CLEARLY THAT AN INCUMBENT CONTRACTOR WHO WAS ALREADY MOBILIZED WOULD OR WOULD NOT BE PAID A MOBILIZATION FEE UNDER THIS SUB-ITEM.'

SECTION 14 OF THE SPECIFICATIONS ACCOMPANYING THE INVITATION FOR BIDS CLEARLY INDICATES THAT THE PRICE SUBMITTED FOR BID ITEM NO. 1 IS THE PRICE FOR THE ENTIRE WORK. THE BIDDER, WHO SHOULD BE COMPLETELY FAMILIAR WITH THE INVITATION REQUIREMENTS PRIOR TO THE SUBMISSION OF HIS BID, SUBMITS A TOTAL BID (IN YOUR CASE $228,575) UPON WHICH THE AWARD EVALUATION IS MADE. IF YOU DID NOT INTEND TO CHARGE THE GOVERNMENT FOR MOBILIZATION, YOU SHOULD HAVE INSERTED "NO CHARGE" IN THE SPACE SET ASIDE FOR THE PRICE OF SUB-ITEM NO. 1.1 AND REDUCED YOUR TOTAL BID ACCORDINGLY. YOUR INSERTION OF A CHARGE FOR MOBILIZATION EXPENSES APPEARS TO INDICATE ONE OF THE FOLLOWING: YOU ACTUALLY EXPECTED TO INCUR MOBILIZATION EXPENSES, YOU CHOSE TO REDUCE THE PRICES QUOTED FOR OTHER SUB-ITEMS AND CHARGE SUCH REDUCTION TO MOBILIZATION OR YOU DECIDED TO INCLUDE A MOBILIZATION CHARGE WHICH YOU WOULD NOT INCUR BECAUSE OF YOUR COMPETITIVE ADVANTAGE OVER OTHER BIDDERS.

YOU HAVE ALSO CONTENDED THAT SHOULD THE GOVERNMENT EXERCISE ITS OPTION TO EXTEND THE CONTRACT THROUGH FISCAL YEAR 1968, UNDER PARAGRAPH 1.7.1 REFERRED TO ABOVE, THE OVERALL TWO-YEAR COST TO THE GOVERNMENT WOULD BE LESS IF YOU WERE AWARDED THE CONTRACT.

ESSENTIALLY, AN OPTION IS AN OFFER WHICH MAY BE ACCEPTED AT SOME FUTURE TIME. IT DOES NOT BECOME A BINDING CONTRACT UNTIL IT HAS BEEN ACCEPTED BY THE GOVERNMENT WITHIN THE TIME AND UPON THE TERMS AND CONDITIONS PROVIDED IN THE OPTION. THE USE OF AN OPTION IN GOVERNMENT CONTRACTS IS SANCTIONED AND REGULATED BY THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PART 15. EVALUATION OF BIDS WHERE OPTIONS ARE INCLUDED IS MADE ON THE BASIS OF THE SERVICES ORIGINALLY CALLED FOR, EXCLUSIVE OF THE OPTION, UNLESS THE OPTION IS TO BE EXERCISED AT THE TIME OF AWARD. SEE 41 COMP. GEN. 709 (1962).

HERE, NO DECISION WAS MADE BY THE GOVERNMENT AT THE TIME OF THE AWARD OF CONTRACT TO EXERCISE ITS OPTION AND EXTEND THE CONTRACT. INDEED, IF FISCAL YEAR FUNDS ARE TO BE USED, IT COULD NOT HAVE BEEN ACCEPTED. WHETHER OR NOT SUCH DECISION IS MADE WILL DEPEND ON THE CONTRACTING OFFICER'S REVIEW OF LOCAL CONDITIONS AND OTHER RELEVANT FACTORS EXISTING AT THE TIME THE MAINTENANCE IN QUESTION IS NEEDED. THIS IS A DECISION THE GOVERNMENT MUST MAKE BASED ON WHAT IT CONSIDERS ITS BEST INTEREST TO BE, AND IN COMPLIANCE WITH THE RULES SET DOWN IN ASPR 1-1505,"EXERCISE OF OPTIONS.'

IT IS, THEREFORE, OUR DETERMINATION UPON REVIEWING THE AWARD THAT IT WAS CONSISTENT WITH THE REQUIRED INTEGRITY OF THE ADVERTISED BIDDING SYSTEM, AND YOUR PROTEST OF THE AWARD IS DENIED.