B-164518, JULY 24, 1968, 48 COMP. GEN. 34

B-164518: Jul 24, 1968

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THE STATUTORY COST LIMITATION CERTIFICATE REQUIRED BY PARAGRAPH 18 110 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION IN CONNECTION WITH CONSTRUCTION CONTRACTS IS REGARDED AS BEING INTENDED TO PREVENT THE DELIBERATE UNDERSTATEMENT OF ESTIMATED COSTS SO AS TO STAY WITHIN THE STATUTORY LIMITATION. IS CONSIDERED A REQUIREMENT THAT IS IN ACCORD WITH PARAGRAPH 2-201 (C) OF THE REGULATION. BIDS - EVALUATION - COST LIMITATIONS WHETHER THE OVERSTATEMENT OF COSTS ON PROPOSED CONSTRUCTION CONTRACTS WHICH ARE SUBJECT TO STATUTORY LIMITATIONS AND TO THE CERTIFICATION OF THE ACCURACY OF COST APPORTIONMENT STATEMENTS PRESCRIBED BY PARAGRAPH 18-110 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION WOULD IN NO CASE BE GROUNDS FOR FINDING A BID NONRESPONSIVE CANNOT BE ANSWERED WITHOUT QUALIFICATION.

B-164518, JULY 24, 1968, 48 COMP. GEN. 34

PUBLIC BUILDINGS - CONSTRUCTION - COST LIMITATIONS - CERTIFICATION, COMPLIANCE, ETC. THE STATUTORY COST LIMITATION CERTIFICATE REQUIRED BY PARAGRAPH 18 110 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION IN CONNECTION WITH CONSTRUCTION CONTRACTS IS REGARDED AS BEING INTENDED TO PREVENT THE DELIBERATE UNDERSTATEMENT OF ESTIMATED COSTS SO AS TO STAY WITHIN THE STATUTORY LIMITATION, AND IS CONSIDERED A REQUIREMENT THAT IS IN ACCORD WITH PARAGRAPH 2-201 (C) OF THE REGULATION, WHICH PROVIDES FOR THE REJECTION OF BIDS MATERIALLY UNBALANCED "FOR THE PURPOSE OF BRINGING AFFECTED ITEMS WITHIN COST LIMITATIONS.' BIDS - EVALUATION - COST LIMITATIONS WHETHER THE OVERSTATEMENT OF COSTS ON PROPOSED CONSTRUCTION CONTRACTS WHICH ARE SUBJECT TO STATUTORY LIMITATIONS AND TO THE CERTIFICATION OF THE ACCURACY OF COST APPORTIONMENT STATEMENTS PRESCRIBED BY PARAGRAPH 18-110 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION WOULD IN NO CASE BE GROUNDS FOR FINDING A BID NONRESPONSIVE CANNOT BE ANSWERED WITHOUT QUALIFICATION. HOWEVER, SUCH CASES ARE NOT ANTICIPATED IN VIEW OF THE FACT THAT PROBLEMS INVOLVING PARAGRAPH 18 110 HAVE CONCERNED UNDERSTATEMENTS OF ESTIMATED COSTS BY BIDDERS ATTEMPTING TO STAY WITHIN THE STATUTORY LIMITATIONS, AND BECAUSE PARAGRAPH 2-201 (C) (I) OF THE REGULATION PROVIDES FOR THE REJECTION OF BIDS MATERIALLY UNBALANCED FOR THE PURPOSE OF BRINGING AFFECTED ITEMS WITHIN COST LIMITATIONS OR BIDS WHICH EXCEED COST LIMITATIONS, UNLESS THE LIMITATIONS HAD BEEN WAIVED PRIOR TO AWARD. BIDS - UNBALANCED - TO MEET COST LIMITATIONS WHERE THE GOVERNMENT ESTIMATE ON CONSTRUCTION CONTRACTS SHOWS THAT COSTS WILL NOT EXCEED THE STATUTORY COST LIMITATIONS PRESCRIBED IN PARAGRAPH 18- 110 OF THE ARMED SERVICES PROCUREMENT REGULATION, AND THE BIDDER'S CERTIFIED COST APPORTIONMENT IS ALSO WITHIN THE LIMITATION, THE FACT THAT THE BID WAS UNBALANCED WOULD NOT ORDINARILY JUSTIFY REJECTION OF THE BID AS NONRESPONSIVE. BIDS - UNSIGNED - COST CERTIFICATIONS WHERE A GOVERNMENT ESTIMATE ON CONSTRUCTION PROJECTS SHOWS THAT COSTS SUBJECT TO THE STATUTORY COST LIMITATIONS OF PARAGRAPH 18-110 OF THE ARMED SERVICES PROCUREMENT REGULATION WILL NOT EXCEED THE LIMITATION, THE FAILURE TO SIGN THE CERTIFICATION REQUIRED BY SUBSECTION (B) IS NOT GROUNDS FOR FINDING A BID NONRESPONSIVE, AND THE USUAL PRINCIPLES REGARDING THE ACCEPTABILITY OF UNSIGNED BIDS WOULD GOVERN IN VIEW OF THE FACT THAT PURSUANT TO PARAGRAPH 2-201 (C) (I), A BIDDER BY HIS SIGNATURE CERTIFIES TO THE CORRECTNESS OF HIS ESTIMATED COST APPORTIONMENT AND TO THE ENTIRE BID AND, THEREFORE, THE FAILURE TO CERTIFY THE COST APPORTIONMENT SHOULD NOT ARISE AS A DISTINCT ISSUE. BIDS - UNBALANCED - TO MEET COST LIMITATIONS IN CONNECTION WITH CONSTRUCTION PROJECTS, THE FACT THAT THE ACCURACY OF A BIDDER'S APPORTIONMENT BETWEEN STATUTORILY LIMITED COSTS AND THOSE NOT SO LIMITED CAN AFFECT THE RESPONSIVENESS OF A BID, PARAGRAPH 2-201 (C) (I) OF THE ARMED SERVICES PROCUREMENT REGULATION PROPERLY PROVIDES THAT ,MATERIALLY UNBALANCED" OR GROSSLY INACCURATE COST APPORTIONMENT CAN BE CAUSE FOR THE REJECTION OF A BID. CONTRACTS - SPECIFICATIONS - DEVIATIONS - INFORMAL V SUBSTANTIVE - COST INFORMATION THE REFUSAL TO SUBMIT A CERTIFIED COST APPORTIONMENT THAT SATISFIES THE STATUTORY LIMITS PRESCRIBED FOR CONSTRUCTION CONTRACTS PURSUANT TO PARAGRAPH 18-110 OF THE ARMED SERVICES PROCUREMENT REGULATION, OR THE SUBMISSION OF GROSSLY ERRONEOUS COST APPORTIONMENT DATA TO CIRCUMVENT THE STATUTORY COST LIMITATIONS IS REGARDED AS A MATERIAL DISCREPANCY WHICH RENDERS A BID NONRESPONSIVE, NOTWITHSTANDING THE APPORTIONMENT CERTIFICATE IS CONSIDERED ONLY ONE TOOL IN AN ARRAY OF AIDS, SUCH AS PRIOR COST EXPERIENCE. GOVERNMENT ENGINEERING ESTIMATES, COMPETING BIDDERS' COSTS APPORTIONMENT, AND THE LIKE, WHICH ARE AVAILABLE TO DETERMINE WHETHER THE STATUTORY COST LIMITATIONS HAVE BEEN MET BY THE BIDDER. BIDS - EVALUATION - COST LIMITATIONS ALTHOUGH THE EVALUATION OF MATERIALLY UNBALANCED BIDS ON CONSTRUCTION PROJECTS IS A MATTER OF BID RESPONSIVENESS, THE MATERIALITY WOULD TO A GREAT EXTENT BE DETERMINED BY WHETHER THE ACTUAL PRICE OFFERED BY THE BIDDER EXCEEDED THE STATUTORY LIMITATION IMPOSED BY PARAGRAPH 18-110 OF THE ARMED SERVICES PROCUREMENT REGULATION, AS THERE IS NO AUTHORIZATION FOR CONSTRUCTION WHICH EXCEEDS THE STATUTORY LIMITS. IN THE ABSENCE OF AN APPROPRIATE WAIVER PURSUANT TO PARAGRAPH 2-201 (C) (I) OF THE REGULATION, A BID THAT ON THE BASIS OF FULL EVALUATION HAS BEEN DETERMINED TO HAVE EXCEEDED THE STATUTORY LIMITATION IS FOR REJECTION WITHOUT REGARD TO RESPONSIVENESS, WHETHER OR NOT THE PROBLEM OF A MATERIALLY UNBALANCED BID IS INVOLVED.

TO THE SECRETARY OF THE ARMY, JULY 24, 1968:

REFERENCE IS MADE TO THE JUNE 4, 1968, LETTER FROM THE DIRECTOR OF PROCUREMENT POLICY AND REVIEW, OFFICE OF THE ASSISTANT SECRETARY, (I AND- L) (PP), DEPARTMENT OF THE ARMY, PRESENTING A NUMBER OF QUESTIONS REGARDING THE EFFECT OF A BIDDER'S CERTIFICATION AS REQUIRED BY PARAGRAPH 18-110, ARMED SERVICES PROCUREMENT REGULATION (ASPR), OF HIS COST APPORTIONMENT BETWEEN ITEMS SUBJECT TO A STATUTORY COST LIMITATION AND THOSE ITEMS WITHOUT SUCH LIMITATION.

AS PRESENTLY FORMULATED, THE SUBJECT REGULATION PROVIDES: 18-110 STATUTORY COST LIMITATIONS.

(A) CONTRACTS FOR CONSTRUCTION SHALL NOT BE AWARDED AT A PRICE IN EXCESS OF STATUTORY COST LIMITATIONS UNLESS THE LIMITATIONS FOR THE PARTICULAR CONTRACT CAN BE AND HAVE BEEN WAIVED AND SHALL NOT BE AWARDED AT A PRICE, WHICH, WITH ALLOWANCES FOR GOVERNMENT IMPOSED CONTINGENCIES AND OVERHEAD, EXCEEDS THE STATUTORY AUTHORIZATION FOR THE PROJECT.

(B) INVITATIONS FOR BIDS AND REQUESTS FOR PROPOSALS CONTAINING ONE OR MORE ITEMS SUBJECT TO STATUTORY COST LIMITATIONS SHALL STATE IN A SEPARATE SCHEDULE THE APPLICABLE COST LIMITATION FOR EACH ITEM SUBJECT TO A SPECIFIC STATUTORY COST LIMITATION. INVITATIONS FOR BIDS AND REQUESTS FOR PROPOSALS SHALL STATE SPECIFICALLY THAT A BID OR PROPOSAL WHICH DOES NOT CONTAIN PRICES FOR THE INDIVIDUAL SCHEDULES WILL BE CONSIDERED NONRESPONSIVE. BIDS OR PROPOSALS SHALL CONTAIN A CERTIFICATION THAT EACH SUCH PRICE INCLUDES AN APPROXIMATE APPORTIONMENT OF ALL ESTIMATED APPLICABLE COSTS, DIRECT AND INDIRECT, AS WELL AS OVERHEAD AND PROFIT. THE INVITATION FOR BIDS REQUIRING SUCH CERTIFICATION SHALL DIRECT THE ATTENTION OF BIDDERS TO THE FOLLOWING STATEMENT TO BE INCLUDED IN THE INVITATION FOR BIDS. BIDS MUST SET FORTH FULL, ACCURATE, AND COMPLETE INFORMATION AS REQUIRED BY THIS INVITATION FOR BIDS (INCLUDING ATTACHMENTS). THE PENALTY FOR MAKING FALSE STATEMENTS IN BIDS IS PRESCRIBED IN 18 U.S.C. 1001 (SEE 2-405 AND 2-406.)

PROCUREMENT OF CONSTRUCTION AND CONTRACTING FOR ARCHITECT-ENGINEER

SERVICES

(C) A BID OR PROPOSAL CONTAINING PRICES WITHIN STATUTORY COST LIMITATIONS ONLY BECAUSE SUCH BID OR PROPOSAL IS MATERIALLY UNBALANCED SHALL BE REJECTED. AN UNBALANCED BID OR PROPOSAL IS ONE WHICH IS BASED ON PRICES SIGNIFICANTLY LESS THAN COST FOR SOME WORK, AND PRICES WHICH ARE OVERSTATED FOR OTHER WORK. A BID OR PROPOSAL CONTAINING PRICES THAT EXCEED APPLICABLE STATUTORY COST LIMITATIONS SHALL BE REJECTED, UNLESS FOR CONSTRUCTION OF COLD STORAGE OR REGULAR (GENERAL PURPOSES) WAREHOUSING, BARRACKS FOR ENLISTED PERSONNEL OR BACHELOR OFFICER'S QUARTERS, AND THE DETERMINATION OF THE ASSISTANT SECRETARY OF DEFENSE (INSTALLATIONS AND LOGISTICS) HAS BEEN OBTAINED THAT THE LIMITATIONS ON CONSTRUCTION COSTS IN THE ANNUAL MILITARY CONSTRUCTION ACT SHALL NOT APPLY AS IMPRACTICABLE. ADDITION, WHERE APPROPRIATE PROVISION IS MADE IN THE INVITATION FOR BIDS OR REQUESTS FOR PROPOSALS, SEPARATE AWARD MAY BE MADE ON INDIVIDUAL ITEMS WHOSE PRICE IS WITHIN OR NOT SUBJECT TO ANY APPLICABLE COST LIMITATION, AND THOSE ITEMS WHOSE PRICE IS IN EXCESS OF THE LIMITATIONS SHALL BE REJECTED. SUCH A PROVISION FOR SEPARATE AWARD SHALL NOT BE MADE UNLESS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT.

IN ADDITION ASPR 2-201 (C) (I) PROVIDES FOR THE INSERTION OF A RELATED CLAUSE IN THE FOLLOWING WORDS:

(1) EXCEPT WHEN THE ASSISTANT SECRETARY OF DEFENSE (INSTALLATIONS AND LOGISTICS) HAS GRANTED A WAIVER (SEE 18-110) PRIOR TO SOLICITATION, IF THE INVITATION CONTAINS ONE OR MORE ITEMS SUBJECT TO STATUTORY COST LIMITATION, A PROVISION SUBSTANTIALLY AS FOLLOWS:

COST LIMITATION. A BID WHICH DOES NOT CONTAIN SEPARATE BID PRICES FOR THE ITEMS IDENTIFIED AS SUBJECT TO A COST LIMITATION MAY BE CONSIDERED NONRESPONSIVE. A BIDDER BY SIGNING HIS BID CERTIFIES THAT EACH PRICE BID ON ITEMS SUBJECT TO A COST LIMITATION INCLUDES AN APPROPRIATE APPORTIONMENT OF ALL APPLICABLE ESTIMATED COSTS, DIRECT AND INDIRECT, AS WELL AS OVERHEAD AND PROFIT. BIDS MAY BE REJECTED WHICH (I) HAVE BEEN MATERIALLY UNBALANCED FOR THE PURPOSE OF BRINGING AFFECTED ITEMS WITHIN COST LIMITATIONS, OR (II) EXCEED THE COST LIMITATIONS UNLESS SUCH LIMITATIONS HAVE BEEN WAIVED BY THE ASSISTANT SECRETARY OF DEFENSE (INSTALLATIONS AND LOGISTICS) PRIOR TO AWARD.

YOUR LETTER EXPRESSES CONCERN THAT THE DECISIONS OF THIS OFFICE, SUCH AS 46 COMP. GEN. 298 AND B-158595, MAY 26, 1966, MAY BE AT VARIANCE WITH ASPR 18-110. IN PARTICULAR, YOU ASK THE QUESTIONS WHICH ARE QUOTED AND DISCUSSED BELOW IN THE ORDER PRESENTED:

A. DOES YOUR OFFICE REGARD THE CERTIFICATION REQUIRED BY ASPR 18 110 (B) AS HAVING THE SOLE PURPOSE OF GUARDING AGAINST UNDERSTATEMENT OF COSTS SUBJECT TO A STATUTORY LIMITATION IN ORDER TO COME WITHIN THAT LIMITATION?

WE BELIEVE THE CERTIFICATION REQUIRED BY ASPR 18-110 (B) IS INTENDED TO PREVENT DELIBERATE UNDERSTATEMENT OF ESTIMATED COSTS SO AS TO STAY WITHIN THE STATUTORY LIMITATION, AND WE SO STATED ON PAGES 8 AND 9 OF OUR DECISION B-159813, OCTOBER 13, 1966, 46 COMP. GEN. 298 WHEN WE SAID: WHILE IT COULD BE THAT BIDDERS MIGHT UNBALANCE BIDS WITH A VIEW TOWARD OVERLOADING COSTS OF OTHER WORK SO THAT THE COSTS ON THE WORK GOVERNED BY A GIVEN DOLLAR LIMITATION WILL COME WITHIN THE LIMITATION, NO USEFUL PURPOSE WOULD APPEAR TO BE SERVED FOR A BIDDER, WHO REASONABLY CAN BE EXPECTED TO BE BIDDING WITH THE VIEW OF BEING SUCCESSFUL IN OBTAINING AN AWARD OF A CONTRACT, TO DELIBERATELY OVERLOAD THE COSTS FOR THAT PART OF THE WORK WITHIN THE LIMITATION AND AT THE SAME TIME STATE A REDICULOUSLY LOW COST FOR OTHER WORK. IT IS THE KIND OF UNBALANCING FIRST MENTIONED WHICH ARMED SERVICES PROCUREMENT REGULATION (ASPR) GUARDS AGAINST IN SECTION 18-110 (C).

IT IS OUR OPINION THAT THIS STATEMENT ACCORDS WITH ASPR 2-201 (C) (I), WHICH PROVIDES FOR THE REJECTION OF BIDS OF MATERIALLY UNBALANCED "FOR THE PURPOSE OF BRINGING AFFECTED ITEMS WITHIN COST LIMITATIONS.'

B. IF THE ANSWER TO A. IS AFFIRMATIVE, DOES IT FOLLOW THAT THE OVERSTATEMENT OF COSTS SUBJECT TO A STATUTORY LIMITATION AND CERTIFICATION OF THE ACCURACY OF SUCH STATEMENT WOULD IN NO CASE BE GROUNDS FOR FINDING A BID NONRESPONSIVE?

SINCE EVERY POSSIBLE CIRCUMSTANCE CANNOT BE ANTICIPATED, WE CANNOT UNQUALIFIEDLY ANSWER THE QUESTION IN THE AFFIRMATIVE. NEVERTHELESS, BECAUSE THE PROBLEMS TO DATE INVOLVING ASPR 18-110 HAVE CONCERNED THE ALLEGED UNDERSTATEMENT OF ESTIMATED COSTS BY BIDDERS ATTEMPTING TO STAY WITHIN THE STATUTORY LIMITATIONS, AND BECAUSE OF THE PRESENT WORDING OF ASPR 2-201 (C) (I), WE DO NOT ANTICIPATE CASES UNDER ASPR 18-110 INVOLVING OVERSTATED ESTIMATES OF COSTS SUBJECT TO STATUTORY LIMITATIONS.

C. IF AN INDEPENDENT GOVERNMENT ESTIMATE SHOWS THAT COSTS SUBJECT TO STATUTORY LIMITATION WILL NOT EXCEED THE LIMITATION, IS THE FACT THAT A BIDDER UNDERSTATED THESE COSTS AND CERTIFIED THE ACCURACY OF SUCH STATEMENT GROUNDS FOR FINDING THE BID NONRESPONSIVE? REGARDLESS OF THE BIDDER'S INTENT?

OUR CONCLUSIONS REGARDING A BIDDER'S UNDERSTATEMENT OF ESTIMATED COSTS OF STATUTORILY LIMITED ITEMS DEPEND UPON MANY FACTORS, INCLUDING, WHEN KNOWN, THE BIDDER'S INTENTION. SEE B-162173, SEPTEMBER 29, 1967, TO THE SECRETARY OF THE NAVY, WHERE WE QUESTIONED THE PROPRIETY OF ALLOWING THE REBALANCING OF AN UNBALANCED BID, WHICH WAS LOW IN THE OVERALL, IN ORDER TO COME WITHIN THE STATUTORY LIMITATIONS. ON THE OTHER HAND, WHERE THE GOVERNMENT'S OWN ESTIMATES SHOW THAT THE COSTS SUBJECT THERETO WILL NOT EXCEED THE STATUTORY LIMITATION AND THE BIDDER'S CERTIFIED COST APPORTIONMENT IS ALSO WITHIN THE LIMITATION, THE FACT THAT THE BID WAS UNBALANCED WOULD NOT ORDINARILY JUSTIFY REJECTION OF THE BID AS NOT RESPONSIVE.

D. IF AN INDEPENDENT GOVERNMENT ESTIMATE SHOWS THAT COSTS SUBJECT TO STATUTORY LIMITATION WILL NOT EXCEED THE LIMITATION, IS THE FAILURE OF A BIDDER TO SIGN THE CERTIFICATION REQUIRED BY ASPR 18-110 (B) GROUNDS FOR FINDING THE BID NONRESPONSIVE?

AS WE UNDERSTAND THE PRESENT FORMULATION OF SOLICITATIONS PURSUANT TO ASPR 2-201 (C) (I), A BIDDER CERTIFIES AS TO THE CORRECTNESS OF HIS ESTIMATED COST APPORTIONMENT BY HIS SIGNATURE TO THE ENTIRE BID. WHERE THIS IS THE CASE THE FAILURE TO CERTIFY COST APPORTIONMENT SHOULD NOT ARISE AS A DISTINCT ISSUE. ACCORDINGLY, THE USUAL PRINCIPLES REGARDING THE ACCEPTABILITY OF UNSIGNED BIDS WOULD GOVERN.

E. IS THE ACCURACY OF A BIDDER'S APPORTIONMENT BETWEEN STATUTORILY LIMITED COSTS AND THOSE NOT SO LIMITED A FACTOR WHICH CANNOT BE MADE TO AFFECT THE RESPONSIVENESS OF HIS BID, REGARDLESS OF WHAT THE IFB STATES ON THIS MATTER? IS THE BIDDER'S CERTIFICATION OF HIS APPORTIONMENT ALSO A FACTOR WHICH CANNOT AFFECT RESPONSIVENESS?

IT IS OUR OPINION THAT THE ACCURACY OF A BIDDER'S APPORTIONMENT BETWEEN STATUTORILY LIMITED COSTS AND THOSE NOT SO LIMITED CAN AFFECT THE RESPONSIVENESS OF A BID. SEE B-162173, SUPRA. ASPR 2-201 (C) (I) PROVIDES THAT "MATERIALLY UNBALANCED," OR GROSSLY INACCURATE, COST APPORTIONMENT CAN BE CAUSE FOR THE REJECTION OF A BID. WE ARE IN AGREEMENT WITH THIS PROVISION OF THE REGULATION.

AS DISCUSSED IN RESPONSE TO QUESTION "D," IT APPEARS UNLIKELY THAT THE FAILURE TO CERTIFY A COST APPORTIONMENT WILL BECOME AN ISSUE FOR FUTURE PROCUREMENTS.

F. CAN IT BE SAID THAT THE ACCURACY OF THE CERTIFICATE REQUIRED BY ASPR 18-110 HAS NO EFFECT ON RESPONSIVENESS AND CAN ONLY AFFECT THE ACCEPTABILITY OF THE BID FROM THE STANDPOINT OF NONRESPONSIBILITY DUE TO LACK OF BUSINESS INTEGRITY?

IT IS IMPORTANT TO NOTE THAT THE STATUTES ESTABLISHING COST LIMITATIONS FOR MILITARY BARRACKS AND HOUSING UNITS ARE DIRECTED TOWARD THE APPROPRIATE GOVERNMENTAL DEPARTMENTS RATHER THAN TO THE PRIVATE CONTRACTORS WHO BUILD THE UNITS. FOR THIS REASON, THE BIDDER'S COST APPORTIONMENT CERTIFICATION SHOULD BE CONSIDERED AS ONE TOOL IN AN ARRAY OF AIDS, SUCH AS PRIOR COST EXPERIENCE, GOVERNMENT ENGINEERING ESTIMATES, COMPETING BIDDERS' COST APPORTIONMENTS AND THE LIKE, AVAILABLE TO DETERMINE WHETHER THE STATUTORY COST LIMITATIONS HAVE BEEN MET. THIS IS NOT TO SAY THAT THE SUBMISSION OF A COST APPORTIONMENT CERTIFICATE IS A MEANINGLESS ACT, FOR DESPITE THE EXISTENCE OF A DEGREE OF LATITUDE INHERENT IN GOOD FAITH COST APPORTIONMENT, BIDDERS ARE REQUIRED TO FURNISH THE GOVERNMENT A REASONABLE GUIDE TO THEIR ESTIMATE COSTS SO THAT THE GOVERNMENT WILL BE ABLE TO ASCERTAIN WHETHER THE PROJECTED COSTS WILL STAY WITHIN THE LIMITS PRESCRIBED BY CONGRESS. THEREFORE, THE REFUSAL TO SUBMIT A CERTIFIED COST APPORTIONMENT SATISFYING THE STATUTORY LIMITS, OR THE SUBMISSION OF GROSSLY ERRONEOUS COST APPORTIONMENT DATA FOR THE APPARENT PURPOSE OF CIRCUMVENTING SUCH LIMITS, IS TO BE REGARDED AS A MATERIAL DISCREPANCY RENDERING THE BID NONRESPONSIVE.

G. IF A BID IS REJECTED UNDER ASPR 18-110 (C) BECAUSE IT IS "MATERIALLY UNBALANCED," IS IT A PROPER INTERPRETATION OF THAT SECTION TO SAY THAT SUCH A BID IS NOT NONRESPONSIVE, BUT IS REJECTED BECAUSE THE BIDDER'S ACTUAL COST COULD EXCEED THE STATUTORY LIMIT?

AS STATED IN OUR RESPONSE TO QUESTION "F," WE BELIEVE THAT THE EVALUATION OF MATERIALLY UNBALANCED BIDS IS A MATTER OF BID RESPONSIVENESS. HOWEVER, THE MATERIALITY WOULD TO A GREAT EXTENT BE DETERMINED BY WHETHER THE ACTUAL PRICE WOULD EXCEED THE STATUTORY LIMIT. THERE WOULD, OF COURSE, BE NO AUTHORIZATION FOR CONSTRUCTION WHICH EXCEEDS THE STATUTORY LIMITS. THE ABSENCE OF AN APPROPRIATE WAIVER, IF ON THE BASIS OF A FULL EVALUATION IT IS DETERMINED THAT A BID WILL EXCEED THE STATUTORY COST LIMITATION, THEN IT MUST, FOR THAT REASON, BE REJECTED, WITHOUT REGARD TO ITS RESPONSIVENESS OTHERWISE. THIS IS TRUE WHENEVER IT IS DETERMINED THAT THE STATUTORY LIMITS WILL BE EXCEEDED, EVEN THOUGH THE PROBLEM OF A MATERIALLY UNBALANCED BID MAY NOT BE PRESENT.