B-173088, JUL 27, 1971

B-173088, JUL 27, 1971

BID PROTEST - EVALUATED BID LOWER THAN ESTIMATED COST OF PERFORMANCE DECISION DENYING PROTEST AGAINST ACCEPTANCE OF A LOW BID BY U.S. BUILDING MAINTENANCE UNDER AN IFB ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND, PHIL., PA., FOR MAINTENANCE SERVICE AT THE NAVAL AMMUNITION DEPOT, CRANE, INDIANA. WHILE THE LOW BID AND EVALUATED AMOUNT ARE BELOW THE MINIMUM ESTIMATED COST OF PERFORMANCE, THE FIXED AND ESTIMATED COSTS OF PERFORMANCE, EXCLUSIVE OF OVERHEAD AMOUNT TO LESS THAN THE EVALUATED BID PRICE OF U.S. BUILDING MAINTENANCE. FURTHER, THE FACT THAT THE LOW BIDDER MIGHT INCUR A LOSS IN PERFORMING THE CONTRACT DOES NOT JUSTIFY REJECTING AN OTHERWISE ACCEPTABLE BID.

TO KENTUCKY BUILDING MAINTENANCE, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 27, 1971, AND SUBSEQUENT CORRESPONDENCE CONCERNING YOUR PROTEST UNDER INVITATION FOR BIDS (IFB) N62472-71-B-6308, WHICH WAS ISSUED ON APRIL 20, 1971, BY THE EAST CENTRAL DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, PHILADELPHIA, PENNSYLVANIA, FOR MAINTENANCE SERVICES AT THE NAVAL AMMUNITION DEPOT, CRANE, INDIANA.

AFTER BIDS WERE OPENED ON MAY 20, 1971, THE LOWEST BIDDER, DYNAMIC INTERNATIONAL, INC., ASSERTED A MISTAKE IN BID AND WAS PERMITTED TO WITHDRAW ITS OFFER. THE NEXT LOWEST BID WAS SUBMITTED BY U.S. BUILDING MAINTENANCE IN THE AMOUNT OF $248,907.50, WITH A 4 PERCENT, 20 DAYS, PROMPT PAYMENT DISCOUNT, FOR AN EVALUATED BID PRICE OF $238,951.20. THIS CONNECTION THE NAVY HAS ADVISED THAT BUILDING MAINTENANCE HAS CONFIRMED ITS BID PRICE.

YOU STATE THAT THE LOW BID IS BELOW THE MINIMUM NEEDED TO PAY THE DEPARTMENT OF LABOR SPECIFIED WAGES, PLUS REQUIRED PAYROLL TAXES, SUPPLIES, EQUIPMENT, AND PERFORMANCE BOND, ALL OF WHICH ARE REQUIRED UNDER THE CONTRACT.

THE PROCURING ACTIVITY ESTIMATES THE COST OF PERFORMANCE AT $258,008.96, AS FOLLOWS:

LABOR $2.66 X 2080 $5,532.80 X 34 $188,115.20

SUPERVISION $150.00 PER WK. $150 X 104 15,600.00

EXTRA HOURS 300 $2.66 798.00

VACATION $106.00 X 34 3,617.60

SOCIAL SECURITY 5.2% 10,822.80

SUPPLIES AND EQUIPMENT 15,600.00

OVERHEAD, INSURANCE, BONDS 23,455.36

TOTAL $258,008.96

WHILE IT IS THEREFORE APPARENT THAT THE LOW BID OF $248,907.50, AND THE EVALUATED AMOUNT OF $238,951.20 IS BELOW THE MINIMUM ESTIMATED COST FOR PERFORMANCE OF THE CONTRACT, THE FACT REMAINS THAT THE FIXED AND ESTIMATED COSTS OF PERFORMANCE, EXCLUSIVE OF OVERHEAD, AMOUNT TO LESS THAN THE EVALUATED BID PRICE OF BUILDING MAINTENANCE. IN VIEW THEREOF, WE ARE UNABLE TO CONCLUDE THAT ITS BID PRICE IS INSUFFICIENT TO PERMIT THE BIDDER TO SATISFACTORILY PERFORM THE CONTRACT. IN THIS CONNECTION, WE HAVE HELD THAT THE FACT THAT THE LOW BIDDER MIGHT INCUR A LOSS IN PERFORMING THE CONTRACT AT THE PRICE SHOWN IN ITS BID DOES NOT JUSTIFY REJECTING AN OTHERWISE ACCEPTABLE BID. B-172178, MAY 21, 1971; B 171419, MARCH 15, 1971; 49 COMP. GEN. 311 (1969).

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