B-171814, FEB 12, 1971

B-171814: Feb 12, 1971

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AN AWARD TO THE LOW BIDDER WITHIN THE FUND LIMITATION RATHER THAN TO THE LOW BIDDER ON THE BASIS OF TOTAL BID INCLUDING ALL OPTIONS WAS PROPER SINCE IT IS THE AMOUNT OF FUNDS AVAILABLE THAT CONTROLS THE SELECTION AND SUCH SELECTION IS NOT SUBJECT TO OBJECTION AS BEING A MANIPULATION OF OPTIONS. SECRETARY: REFERENCE IS MADE TO A LETTER DATED JANUARY 29. THE WORK TO BE PERFORMED WAS DIVIDED INTO FIVE GROUPS OF ITEMS. THE FIRST WAS A BASIC GROUP AND THE OTHER FOUR WERE OPTIONAL ADDITIVE GROUPS. PROSPECTIVE BIDDERS WERE ADVISED IN THE INVITATION THAT "AWARD MADE WILL BE TO ONE BIDDER" AND THAT "AWARD OF OPTIONS WILL BE MADE IN NUMERICAL ORDER TO THE EXTENT THAT FUNDS ARE AVAILABLE.". FOUR BIDS WERE OPENED ON DECEMBER 18.

B-171814, FEB 12, 1971

BID PROTEST - BASE BID AND OPTIONS - FUND LIMITATION DENIAL OF PROTEST OF DAVID R. WILKINS, LOW BIDDER ON TOTAL BID AND OPTIONS, AGAINST AWARD TO JOHNSON STRUCTURES, INC., LOW BIDDER ON BASE BID AND TWO OPTIONS WITHIN FUND LIMITATION FOR CONSTRUCTION OF AN IRRIGATION AND DRAINAGE SYSTEM AT SIX RIVERS NATIONAL FOREST, EUREKA, CALIFORNIA. UNDER AN INVITATION WHICH PERMITTED THE GOVERNMENT TO ACCEPT ANY ITEM OR COMBINATION OF ITEMS IN NUMERICAL ORDER WITHIN THE LIMITS OF FUNDS AVAILABLE, AN AWARD TO THE LOW BIDDER WITHIN THE FUND LIMITATION RATHER THAN TO THE LOW BIDDER ON THE BASIS OF TOTAL BID INCLUDING ALL OPTIONS WAS PROPER SINCE IT IS THE AMOUNT OF FUNDS AVAILABLE THAT CONTROLS THE SELECTION AND SUCH SELECTION IS NOT SUBJECT TO OBJECTION AS BEING A MANIPULATION OF OPTIONS.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 29, 1971, FILE REFERENCE 6320 CONTRACTING, WITH ENCLOSURE, FORWARDING THE PROTEST OF MR. DAVID R. WILKINS, EUREKA, CALIFORNIA, AGAINST THE PROPOSED AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. R5-71-134, ISSUED BY THE U.S. FOREST SERVICE, BRANCH OF ADMINISTRATIVE SERVICES, SAN FRANCISCO, CALIFORNIA.

THE INVITATION REQUESTED BIDS FOR CONSTRUCTION OF AN IRRIGATION AND DRAINAGE SYSTEM AT THE HUMBOLDT NURSERY, SIX RIVERS NATIONAL FOREST, EUREKA, CALIFORNIA. THE WORK TO BE PERFORMED WAS DIVIDED INTO FIVE GROUPS OF ITEMS. THE FIRST WAS A BASIC GROUP AND THE OTHER FOUR WERE OPTIONAL ADDITIVE GROUPS. THE BASE GROUP COVERED THE CONSTRUCTION OF A COMPLETE DRAINAGE SYSTEM FOR THE ENTIRE PROJECT, BLOCKS 1 THROUGH 8. OPTION 1 COVERED THE IRRIGATION SYSTEM FOR BLOCKS 1 THROUGH 5 AND OPTIONS 2,3, AND 4 COVERED THE IRRIGATION SYSTEM FOR BLOCKS 6, 7, AND 8, RESPECTIVELY. PROSPECTIVE BIDDERS WERE ADVISED IN THE INVITATION THAT "AWARD MADE WILL BE TO ONE BIDDER" AND THAT "AWARD OF OPTIONS WILL BE MADE IN NUMERICAL ORDER TO THE EXTENT THAT FUNDS ARE AVAILABLE."

FOUR BIDS WERE OPENED ON DECEMBER 18, 1970. THE BIDS RECEIVED WERE AS FOLLOWS:

DAVID R. JOHNSON HUMBOLDT PIALORSI

WILKINS STRUCTURES CONSTRUCTION CONSTRUCTION

BASE BID $ 71,900.00 $ 68,687.00 $ 69,928.50 $ 79,369.50

OPTION 1 5,546.00 6,214.00 6,461.30 4,786.00

SUBTOTAL 77,446.00 74,901.00 76,089.80 84,155.50

OPTION 2 6,367.00 7,018.56 7,223.28 5,364.50

SUBTOTAL 83,813.00 81,919.56 83,313.08 89,520.00

OPTION 3 9,481.00 10,332.16 10,040.33 7,868.50

SUBTOTAL 93,294.00 92,251.72 93,353.41 97,388.50

OPTION 4 8,952.00 10,057.16 10,093.13 7,553.50

TOTAL BID

INCLUDING

OPTIONS $102,246.00 $102,308.88 $103,446.54 $104,942.00

THE AMOUNT OF FUNDS AVAILABLE FOR THE PROCUREMENT IS $89,000. THE CONTRACTING OFFICER PROPOSES TO AWARD A CONTRACT ON THE BASIC GROUP PLUS OPTIONS 1 AND 2 TO JOHNSON STRUCTURES, INC., AS THE LOWEST BIDDER WITHIN THE FUND LIMITATION.

DAVID R. WILKINS, THROUGH HIS ATTORNEY, HAS PROTESTED AGAINST THE PROPOSED AWARD ON THE GROUNDS THAT HE IS ENTITLED TO THE AWARD BECAUSE THE INVITATION CONTEMPLATED THAT THE CONTRACT WOULD BE MADE FOR THE BASE ITEM PLUS ALL THE OPTIONS AND HIS TOTAL BID IN THE AMOUNT OF $102,246 WAS THE LOWEST RECEIVED ON THAT BASIS. HOWEVER, THAT CONTENTION OVERLOOKS THE FACT THAT SECTION 10(C) OF THE INSTRUCTIONS TO BIDDERS (CONSTRUCTION CONTRACT), STANDARD FORM 22, PROVIDED THAT THE GOVERNMENT MAY ACCEPT ANY ITEM OR COMBINATION OF ITEMS OF A BID, UNLESS PRECLUDED BY THE INVITATION FOR BIDS; THAT THE INVITATION WAS SPECIFIC THAT THE AWARD WOULD INCLUDE OPTIONS IN NUMERICAL ORDER WITHIN THE LIMITS OF AVAILABLE FUNDS; AND THAT THERE IS ONLY $89,000 AVAILABLE FOR THE CONSTRUCTION. THUS, THE BIDDERS WERE SERVED NOTICE IN THE INVITATION THAT THE AWARD WOULD NOT INCLUDE ALL THE OPTIONS IF SUFFICIENT FUNDS WERE NOT AVAILABLE FOR THE PROJECT.

FURTHER, THE FOREGOING PROCEDURE HAS BEEN PROTESTED ON BEHALF OF MR. WILKINS ON THE BASIS THAT IT PERMITS MANIPULATION OF THE AWARD BY INCLUDING OR DELETING VARIOUS OPTIONS. HOWEVER, THE INVITATION IS SPECIFIC AS TO THE ORDER OF OPTIONS UP TO THE LIMIT OF AVAILABLE FUNDS. THEREFORE, IT IS THE AMOUNT OF FUNDS AVAILABLE THAT IS CONTROLLING THE SELECTION OF THE SUCCESSFUL BIDDER AND NOT THE MANIPULATION OF OPTIONS.

IN ANY EVENT, EVEN IN A SITUATION WHEN AN ORDER OF PRECEDENCE IN THE SELECTION OF ADDITIVES WAS NOT PROVIDED IN THE INVITATION, OUR OFFICE STATED:

" *** SUCH AN ELECTION BY THE CONTRACTING AGENCY IS NOT IMPROPER. REQUIREMENTS THAT CONTRACTS FOR PUBLIC WORK BE LET TO THE LOWEST BIDDER ARE NOT VIOLATED WHEN SPECIFICATIONS ARE DRAWN FOR DIFFERENT WORK, BIDS ARE SOUGHT ON DIFFERENT BASES, AND A CHOICE IS NOT MADE BY THE CONTRACTING OFFICIALS UNTIL AFTER ALL THE BIDS ARE OPENED. 43 AM. JUR., PUBLIC WORKS AND CONTRACTS, SEC 37; 10 MCQUILLIN, MUNICIPAL CORPORATIONS, SEC 29.55 (3RD ED.); COHEN, PUBLIC CONSTRUCTION CONTRACTS AND THE LAW, SEC 2.14." -148333, APRIL 9, 1962. SEE ALSO 45 COMP. GEN. 651 (1966); B-157227, AUGUST 18, 1965; AND B-170168, SEPTEMBER 10, 1970.

FURTHER, IN THAT REGARD, IN DECISION B-146343, NOVEMBER 1, 1961, WE STATED:

"YOUR ATTORNEY CONTENDS THAT IT IS IMPROPER FOR THE GOVERNMENT TO RESERVE UNTIL AFTER BID OPENING THE RIGHT TO CHOOSE THE PARTICULAR COMBINATION OF ITEMS ON WHICH BIDS WILL BE EVALUATED, CLAIMING THAT THE CONTRACTING OFFICER MIGHT THEREBY, THROUGH A CAREFUL SELECTION OF ITEMS, CHOOSE ANY CONTRACTOR OTHER THAN THE ONE WHO HAD SUBMITTED THE LOWEST AGGREGATE BID FOR ALL ITEMS. YOU ARE UNDOUBTEDLY AWARE THAT IT IS NOT AT ALL UNUSUAL TO SOLICIT BIDS FOR CERTAIN MINIMUM WORK, PLUS OPTIONAL ADDITIONAL WORK. THE PURPOSE OF ADVERTISING ON THIS BASIS ORDINARILY IS TO ENABLE AWARD TO BE MADE IN ACCORDANCE WITH THE FUNDS AVAILABLE AND THE BEST BARGAIN OFFERED BY BIDDERS. THE NET RESULT THEREOF IS TO REQUIRE BIDDERS TO QUOTE PRICES ON VARIOUS COMBINATIONS OF ITEMS, SUBJECT TO THE GOVERNMENT'S RIGHT TO CHOOSE ANY PARTICULAR COMBINATION IT WISHES AS THE BASIS OF AWARD.

" *** EACH BIDDER IS COMPETING AGAINST EACH OTHER BIDDER ON EACH POSSIBLE COMBINATION OF ITEMS, AND THE COMPARATIVE DESIRABILITY OF DIFFERENT ITEMS MAY WELL DEPEND ON THE PRICES QUOTED THEREFOR. IT IS OBVIOUS THAT AWARD COULD NOT BE MADE ON ANY COMBINATION OF ITEMS TO A BIDDER WHOSE AGGREGATE PRICE FOR THOSE ITEMS WAS NOT LOW, MERELY BECAUSE HE HAPPENED TO HAVE OFFERED AN OFFSETTING LOWER PRICE FOR WORK WHICH IS NOT TO BE PERFORMED.

THE PROPOSED CONTRACT AWARD TO JOHNSON STRUCTURES IS CONSISTENT WITH THE PROVISIONS OF THE INVITATION. THEREFORE, OUR OFFICE HAS NO LEGAL OBJECTION TO THE AWARD AND THE PROTEST IS ACCORDINGLY DENIED.