B-172178, MAY 21, 1971

B-172178, MAY 21, 1971

BID PROTEST - UNPROFITABLE PRICE DENYING PROTEST OF NASH JANITORIAL SERVICE AGAINST THE AWARD OF A CONTRACT TO KLEEN-RITE JANITORIAL SERVICE, INC., UNDER AN IFB ISSUED BY THE GSA FOR JANITORIAL SERVICES AT BUILDING T-7 IN ARLINGTON, VIRGINIA. EVEN IF IT IS CORRECT THAT KLEEN-RITE WOULD INCUR A LOSS IN PERFORMING THE CONTRACT, ANTICIPATED LOSS IN PERFORMANCE DOES NOT JUSTIFY REJECTING A BID.

TO NASH JANITORIAL SERVICE:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 12, 1971, AND SUBSEQUENT CORRESPONDENCE CONCERNING YOUR PROTEST UNDER INVITATION FOR BIDS (IFB) NO. GS-03B-12943, WHICH WAS ISSUED ON FEBRUARY 22, 1971, FOR JANITORIAL SERVICES AT BUILDING T-7, ARLINGTON, VIRGINIA, FOR A PERIOD OF ONE YEAR BEGINNING ON THE DATE SPECIFIED IN THE NOTICE OF AWARD. BIDS WERE SOLICITED FOR THE REQUIRED CLEANING SERVICES AND FOR UNIT PRICES FOR TWO TYPES OF ADDITIONAL FLOOR SERVICES, WHICH MAY BE REQUESTED, WITH AWARD TO BE MADE IN THE AGGREGATE.

WHEN BIDS WERE OPENED ON MARCH 11, 1971, IT WAS NOTED THAT KLEEN-RITE JANITORIAL SERVICE, INC. (KLEEN-RITE) HAD SUBMITTED THE LOWEST MONTHLY BID FOR THE CLEANING SERVICES IN THE AMOUNT OF $22,640.

YOU STATE THAT KLEEN-RITE'S BID WAS BELOW THE MINIMUM ESSENTIAL COST TO PERFORM THE JOB, AS COMPUTED BY YOUR CONCERN, AND SHOULD NOT BE CONSIDERED FOR AWARD.

IN THIS REGARD GSA HAS FURNISHED US WITH THE FOLLOWING REPORT:

"THE REGISTER OF WAGE DETERMINATIONS AND FRINGE BENEFITS UNDER THE MCNAMARA O'HARA SERVICE CONTRACT ACT CONTAINED ON PAGE 64 OF THE INVITATION ESTABLISHES A MINIMUM HOURLY WAGE RATE OF $1.94, PLUS FRINGE BENEFIT PAYMENTS OF $.06 AN HOUR FOR HEALTH AND WELFARE, AS WELL AS PAID VACATIONS AND HOLIDAYS. PARAGRAPH 13 OF THE INVITATION, MINIMUM MAN-HOUR WORK REQUIREMENTS, FOUND AT PAGE 13-14, REQUIRES 399 MAN-HOURS PER DAY AS A MINIMUM FOR PERFORMANCE OF THE CONTRACT WORK.

"THE MINIMUM COSTS FOR LABOR BASED ON THE MINIMUM OF 399 MAN-HOURS PER DAY AND THE WAGE DETERMINATION OF $1.94 PER HOUR PLUS $.06 AN HOUR FOR HEALTH AND WELFARE, BUT EXCLUDING ANY AMOUNT FOR PAID VACATIONS AND HOLIDAYS WOULD TOTAL APPROXIMATELY $17,290.00 PER MONTH, COMPUTED AS FOLLOWS:

399 HOURS/DAY X $2 HOUR $ 798.00 PER DAY

1 DAY X 5 DAYS/WEEK 3,990.00 PER WEEK

1 WEEK X 52 WEEKS/YEAR 207,480.00 PER YEAR

1 YEAR DIVIDED BY MONTHS/YEAR 17,290.00 PER MONTH

"SUBSEQUENT TO THIS PROTEST THE CONTRACTING OFFICER MADE A VERBAL REQUEST FOR VERIFICATION OF KLEEN-RITE'S BID AND FOLLOWED IT UP WITH A WRITTEN REQUEST *** . KLEEN-RITE HAS CONFIRMED ITS BID PRICE AS BEING CORRECT ***

"IT IS ALSO SIGNIFICANT TO NOTE THAT KLEEN-RITE HAS THE CURRENT CONTRACT FOR JANITORIAL SERVICES AT TEMPO 7 BUILDING AT A MONTHLY PRICE OF $23,290.83, APPROXIMATELY $659.00 MORE THAN ITS BID PRICE ON THE PENDING SOLICITATION. THAT CONTRACT IS FOR THE SAME SERVICES AND HAS THE SAME WAGE DETERMINATION AND MINIMUM MAN-HOUR REQUIREMENTS. THE WORK IS BEING PERFORMED IN A REASONABLY SATISFACTORY MANNER."

IN VIEW OF THE ABOVE FACTS, WE ARE UNABLE TO AGREE THAT KLEEN-RITE'S BID IS UNREALISTIC. HOWEVER, EVEN IF WE ASSUME YOUR STATEMENT IS CORRECT AND THAT KLEEN-RITE WOULD INCUR A LOSS IN PERFORMING THE CONTRACT AT THE PRICE SHOWN IN ITS BID, OUR OFFICE HAS HELD THAT AN ANTICIPATED LOSS IN PERFORMANCE DOES NOT JUSTIFY REJECTING AN OTHERWISE ACCEPTABLE BID. 171419, MARCH 15, 1971; 49 COMP. GEN. 311 (1969).

FOR THE REASONS SET FORTH ABOVE, YOUR PROTEST MUST BE DENIED.