B-171419, MAR 15, 1971

B-171419, MAR 15, 1971

BID PROTEST - BID RESPONSIVENESS - MINIMUM ESSENTIAL COST DENIAL OF PROTEST OF SPRINGFIELD WHITE CASTLE COMPANY, SECOND LOW BIDDER, AGAINST THE AWARD OF AN ADVERTISED CONTRACT ISSUED BY THE GSA FOR JANITORIAL SERVICES AT THE REGIONAL OFFICE BUILDING, HOUSING & URBAN DEVELOPMENT BUILDING AND SOUTHWEST BUS TERMINAL, WASHINGTON, D.C., TO RICE CLEANING SERVICES, LOW BIDDER. PROTESTANT'S CLAIM THAT RICE'S BID OF $48,103 IS AN AMOUNT BELOW THE MINIMUM ESSENTIAL COST TO PERFORM THE JOB IS COUNTERED BY THE GOVERNMENT ESTIMATE (EXCLUDING AMOUNT FOR VACATIONS & HOLIDAYS) OF $38,306.07, LEAVING A SUFFICIENT BALANCE FOR OTHER EMPLOYEE BENEFITS (WELFARE, HEALTH, ETC.) TO SUPPORT THE LOW BID AS A FEASIBLE CONTRACT ESTIMATE.

TO RHYNE & RHYNE:

WE REFER TO YOUR LETTERS OF DECEMBER 1 AND 14, 1970, AND FEBRUARY 23, 1971, RELATING TO A PROTEST ON BEHALF OF SPRINGFIELD WHITE CASTLE COMPANY AGAINST AWARD OF A CONTRACT TO RICE CLEANING SERVICES UNDER IFB NO. GS-03B -12872.

THE INVITATION WAS ISSUED BY THE GENERAL SERVICES ADMINISTRATION ON OCTOBER 28, 1970, FOR JANITORIAL SERVICES AT THE REGIONAL OFFICE BUILDING, HOUSING AND URBAN DEVELOPMENT BUILDING AND SOUTHWEST BUS TERMINAL, WASHINGTON, D.C. TEN BIDS WERE RECEIVED AND OPENED ON NOVEMBER 16, 1970, AS FOLLOWS:

AGGREGATE MONTHLY PRICE

RICE CLEANING SERVICE $48,103.00

SPRINGFIELD WHITE CASTLE 52,329.59

NASH JANITORIAL SERVICE 53,510.00

DYNAMIC INTERNATIONAL 53,855.66

APPROVED MAINTENANCE 55,289.94

ROSETA JANITORIAL 58,994.50

OFFICE CLEANERS 60,584.00

SPRINGFIELD BUILDING MAINTENANCE 61,350.30

KENTUCKY BUILDING MAINTENANCE 62,578.85

U.S. BUILDING MAINTENANCE 70,000.00

YOU ESTIMATE THAT THE MINIMUM ESSENTIAL MONTHLY COSTS TO COMPLY WITH THE INVITATION ARE $48,243.45, BASED ON THE EXPERIENCE OF SPRINGFIELD WHITE CASTLE, AND THAT OTHER NORMAL COSTS SUCH AS EQUIPMENT DEPRECIATION, TELEPHONE SERVICE AND TRANSPORTATION, WHICH ARE NOT INCLUDED IN THE DIRECT COSTS, ARE NONETHELESS PRESENT AND SHOULD BE CONSIDERED. AS A RESULT, YOU CONTEND THAT THE BID OF RICE CLEANING SERVICE IN THE AMOUNT OF $48,103.00 IS AN AMOUNT BELOW THE MINIMUM ESSENTIAL COST TO PERFORM THE JOB AND SHOULD NOT BE CONSIDERED RESPONSIVE TO THE INVITATION.

IN ADDITION, YOU CONTEND THAT THE COST EVALUATION SHEETS OF THE BID OF RICE CLEANING SERVICE ARE AN INTEGRAL AND ESSENTIAL PART OF THE BID AND SINCE THEY SHOW AMOUNTS LESS THAN THE MINIMUMS REQUIRED BY THE INVITATION FOR WAGES, WITHOUT REGARD TO FRINGE BENEFITS AND TAXES, THE BID IS THEREFORE NOT RESPONSIVE TO THE INVITATION.

THE ADMINISTRATIVE REPORT OF JANUARY 21, 1971, A COPY OF WHICH WAS FURNISHED TO YOU, SET FORTH GSA'S COMPUTATION OF THE MINIMUM COSTS REQUIRED BY THE INVITATION FOR LABOR, EXCLUDING ANY AMOUNT FOR PAID VACATIONS AND HOLIDAYS, ON THE BASIS OF 884 MANHOURS PER DAY, IN THE AMOUNT OF $38,306.67 PER MONTH. DEDUCTING THIS AMOUNT FROM THE RICE BID OF $48,103.00 LEAVES A BALANCE OF $9,796.33. GSA CONSIDERED THIS BALANCE TO BE SUFFICIENT TO INCLUDE OTHER COSTS, SUCH AS EMPLOYEE BENEFITS OTHER THAN WAGES AND HEALTH AND WELFARE BENEFITS, SUPPLIES, TAXES, OVERHEAD AND PRESUMABLY FOR PROFIT.

RICE MADE NO ALLEGATION OF MISTAKE, AND GSA ADVISES IT HAS NO REASON TO BELIEVE THE BID PRICE WAS IMPROVIDENTLY LOW, SO GSA HAS MADE NO REQUEST FOR VERIFICATION OF RICE'S BID PRIOR TO RECEIPT OF YOUR PROTEST. HOWEVER, AFTER THE PROTEST, IN RESPONSE TO A VERBAL REQUEST FOR VERIFICATION, RICE CONFIRMED ITS BID PRICE BY LETTER OF JANUARY 11, 1971, WITHOUT ANY ALLEGATION OF ERROR.

THE ADMINISTRATIVE REPORT STATES THAT THE EXPERIENCE OF SPRINGFIELD WHITE CASTLE WAS NOT NECESSARILY THE SAME AS THE EXPERIENCE OF RICE MAY BE, AND GSA DID NOT CONSIDER SPRINGFIELD'S EXPERIENCE TO PROVIDE ANY BASIS FOR DETERMINING THAT RICE'S BID IS NONRESPONSIVE.

WITH REFERENCE TO YOUR ALLEGATION THAT THE COST EVALUATION SHEETS ARE AN INTEGRAL AND ESSENTIAL PART OF THE BID, THE ADMINISTRATIVE REPORT STATES THAT THE INVITATION DID NOT PROVIDE THAT THE COST EVALUATION SHEETS WOULD AFFECT THE EVALUATION OF BIDS, BUT PROVIDES INSTEAD THAT "THE LOW AGGREGATE BID SHALL DETERMINE THE LOW BIDDER." THE PURPOSE OF THE BREAKDOWN ON THE COST EVALUATION SHEETS IS STATED TO BE FOR THE CONVENIENCE OF THE CONTRACTING OFFICER. IN GSA'S OPINION, THE TERMS AND CONDITIONS OF THE INVITATION REQUIRE PAYMENT OF THE MINIMUM AMOUNTS REFERRED TO THEREIN EVEN THOUGH THE COST ESTIMATES IN THE BREAKDOWN MAY VARY FROM THE REQUIRED MINIMUMS.

YOUR LETTER OF FEBRUARY 23, 1971, COMMENTING ON THE ADMINISTRATIVE REPORT, REPEATS YOUR ASSERTION THAT RICE'S BID OF $48,103.00 IS ON ITS FACE NOT RESPONSIVE TO THE INVITATION SINCE IT IS LESS THAN THE MINIMUM ESSENTIAL DIRECT MONTHLY COST OF $48,243.45, AS COMPUTED BY SPRINGFIELD WHITE CASTLE.

YOU SUBMIT THAT THE ABSENCE OF ALLEGATION OF MISTAKE BY RICE IS IRRELEVANT. SINCE YOUR OPINION IS THAT THE APPARENT LOW BID OF RICE WAS SUBJECT TO SOME ERROR, YOU CONTEND THAT RICE WAS ALLOWED TO ELECT, AFTER BID OPENING, WHETHER TO STAND ON THE BID OR WITHDRAW IT ON THE GROUND OF MISTAKE, IN VIOLATION OF THE RIGHTS OF OTHER BIDDERS AND CONTRARY TO COMPETITIVE BIDDING PROCEDURE.

YOU TAKE ISSUED WITH THE GSA COMPUTATION OF $38,306.67 AS A MINIMUM COST FOR LABOR FOR THE REASONS (A) THAT IT DOES NOT INCLUDE PAID VACATIONS, PAID HOLIDAYS AND SICK PAY, (B) THAT IT USES 884 MANHOURS PER DAY RATHER THAN THE TOTAL OF 886 AS SET FORTH IN PARAGRAPHS 14, 15 AND 16 OF THE INVITATION AND (C) THAT IT FAILS TO REFLECT ANY PAY DIFFERENTIAL FOR SUPERVISORY TIME.

IN SUMMARY, YOU SUBMIT THAT THE LABOR COSTS SHOULD BE $44,249.79, SUPPLY COSTS $3,793.93 AND BOND COSTS $199.73, FOR A TOTAL DIRECT COST OF $48,243.45, WHICH DOES NOT REFLECT INDIRECT COSTS SUCH AS EQUIPMENT DEPRECIATION, TELEPHONE SERVICE AND TRANSPORTATION. YOU CONTEND THAT RICE'S BID INDICATES DISREGARD OF THESE MINIMUM COSTS AND SHOULD BE CONSIDERED NONRESPONSIVE OR ERRONEOUS AND SHOULD NOT BE GIVEN FURTHER CONSIDERATION.

THE CASES YOU CITE IN SUPPORT OF YOUR CONTENTION THAT RICE HAD AN OPTION TO STAND ON ITS BID OR TO WITHDRAW IT ON THE GROUND OF MISTAKE, DEALT WITH ENTIRELY DIFFERENT FACT SITUATIONS AND DO NOT APPEAR TO HAVE ANY APPLICATION TO THE FACTS OF RECORD HERE. IN 37 COMP. GEN. 579 (1958), THE BIDDER MADE AN ORAL ALLEGATION OF ERROR AT BID OPENING BUT LATER DECLINED TO SUBMIT PROOF OF THE ERROR WHICH WOULD HAVE ELIMINATED HIS BID FROM CONSIDERATION AS LOW BID. IN 35 COMP. GEN. 33 (1955), THE CONTRACTING OFFICER FOUND CERTAIN UNIT BID PRICES TO BE RIDICULOUSLY LOW IN THAT THE REASONABLE PRICE RANGE FOR THE WORK WAS $30 TO $60 WHILE THE BIDDER BID $.30 AND $.40 ALTHOUGH HIS EXTENDED PRICE INDICATED THAT $30 AND $40 WERE INTENDED. IN THE PRESENT CASE, RICE MADE NO ALLEGATION OF ERROR AND THE CONTRACTING OFFICER MADE NO FINDING OF ERROR AND DID NOT CONSIDER RICE'S BID TO BE IMPROVIDENTLY LOW. ADDITIONALLY, THERE ARE NO APPARENT MATHEMATICAL ERRORS IN RICE'S BID AND NO DISCREPANCY BETWEEN THE TOTALS SHOWN ON THE COST EVALUATION SHEETS AND THE AGGREGATE MONTHLY AMOUNT SET FORTH ON PAGE 1 OF RICE'S BID. IN THESE CIRCUMSTANCES, AND IN VIEW OF ITS JANUARY 11, 1971, CONFIRMATION OF ITS BID PRICE, IT IS OUR OPINION THAT RICE IS BOUND BY THE TERMS OF ITS BID TO PERFORM THE REQUIRED SERVICES AT THE AGGREGATE MONTHLY PRICE STATED, AND HAS NO OPTION TO WITHDRAW ITS BID ON THE BASIS OF ERROR.

WE HAVE NO REASON TO DISAGREE WITH THE STATEMENT IN THE ADMINISTRATIVE REPORT THAT THE COST EVALUATION SHEETS ARE FOR THE CONVENIENCE OF THE CONTRACTING OFFICER, SINCE THE INVITATION DID NOT PROVIDE THAT SUCH SHEETS WOULD BE USED IN EVALUATION OF THE BIDS. THE STATEMENT IN THE INVITATION THAT "THE LOW AGGREGATE BID SHALL DETERMINE THE LOW BIDDER" WOULD APPEAR TO PRECLUDE THE CONTRACTING OFFICER FROM USING THE BREAKDOWNS IN THE COST EVALUATION SHEETS FOR ANYTHING OTHER THAN INFORMATIONAL PURPOSES. THESE CIRCUMSTANCES, WE DO NOT REGARD THE COST EVALUATION SHEETS AS AN INTEGRAL AND ESSENTIAL PART OF A BID UNDER THIS INVITATION AND WE DO NOT BELIEVE THAT THE BREAKDOWN OF COST ESTIMATES HAS ANY EFFECT ON THE RESPONSIVENESS OF SUCH BID. SEE 46 COMP. GEN. 293, 306 (1966).

WITH REGARD TO YOUR CONTENTION THAT GSA'S COMPUTATION OF $38,306.67 FOR MINIMUM LABOR COSTS IS NOT ACCURATE, WE AGREE WITH YOUR OBSERVATION THAT THE COMPUTATION DID NOT INCLUDE VACATIONS, HOLIDAYS, SICK LEAVE OR A PAY DIFFERENTIAL FOR SUPERVISION TIME, AND IT SHOULD HAVE USED 886 MANHOURS PER DAY RATHER THAN 884. HOWEVER, A FINDING OF INACCURACY IN GSA'S COMPUTATION DOES NOT DISPOSE OF THE ISSUE RAISED BY YOUR ASSERTION THAT RICE'S BID IS LESS THAN THE MINIMUM COSTS COMPUTED BY SPRINGFIELD WHITE CASTLE. EVEN IF WE ASSUME YOUR COMPUTATION IS CORRECT, WE HAVE HELD THAT AN ANTICIPATED LOSS IN PERFORMANCE DOES NOT IN ITSELF JUSTIFY REJECTING AN OTHERWISE ACCEPTABLE BID. 49 COMP. GEN. 311, 315 (1969). WE SEE NO COMPELLING REASON FOR CONCLUDING OTHERWISE IN THE INSTANT CASE.

FOR THE REASONS STATED, YOUR PROTEST AGAINST FURTHER CONSIDERATION OF RICE'S BID MUST BE DENIED.