B-173461, AUG 19, 1971

B-173461: Aug 19, 1971

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THE PREVIOUS CONTRACT WAS EXTENDED FOR ONE YEAR UNDER AN OPTION CLAUSE BY THE CONTRACTING OFFICER. ASPR SECTION 1-1505 AUTHORIZES CONTRACT OPTIONS TO BE EXERCISED UPON A DETERMINATION THAT SUCH ACTION IS MOST ADVANTAGEOUS TO THE GOVERNMENT. IS SUFFICIENT IF THIS DETERMINATION IS MADE IN GOOD FAITH AND IS SUPPORTED BY SUBSTANTIAL EVIDENCE. THESE CRITERIA WERE SATISFIED IN THIS CASE. INCORPORATED: REFERENCE IS MADE TO YOUR PROTEST AGAINST THE FAILURE OF THE NAVAL FACILITIES ENGINEERING COMMAND. THE INVITATION PROVIDED THAT THE GOVERNMENT WOULD HAVE THE OPTION OF EXTENDING THE TERM OF THE CONTRACT AWARDED FOR AN ADDITIONAL PERIOD OF TWELVE MONTHS. THE LOW BID IN RESPONSE TO THE INVITATION WAS SUBMITTED BY CHARLESTON DISPOSAL SERVICE.

B-173461, AUG 19, 1971

BID PROTEST - CONTRACT RENEWAL - OPTION CLAUSE DENIAL OF PROTEST BY WEIR AT YOUR SERVICE, INCORPORATED AGAINST THE FAILURE OF THE NAVAL FACILITIES ENGINEERING COMMAND, SOUTHEAST DIVISION, TO ADVERTISE FOR BIDS FOR REFUSE COLLECTION SERVICES FOR VARIOUS NAVAL FACILITIES IN THE SIXTH NAVAL DISTRICT. THE PREVIOUS CONTRACT WAS EXTENDED FOR ONE YEAR UNDER AN OPTION CLAUSE BY THE CONTRACTING OFFICER. ASPR SECTION 1-1505 AUTHORIZES CONTRACT OPTIONS TO BE EXERCISED UPON A DETERMINATION THAT SUCH ACTION IS MOST ADVANTAGEOUS TO THE GOVERNMENT. IS SUFFICIENT IF THIS DETERMINATION IS MADE IN GOOD FAITH AND IS SUPPORTED BY SUBSTANTIAL EVIDENCE. THESE CRITERIA WERE SATISFIED IN THIS CASE.

TO WEIR AT YOUR SERVICE, INCORPORATED:

REFERENCE IS MADE TO YOUR PROTEST AGAINST THE FAILURE OF THE NAVAL FACILITIES ENGINEERING COMMAND, SOUTHEAST DIVISION, CHARLESTON, SOUTH CAROLINA, TO ADVERTISE FOR BIDS FOR REFUSE COLLECTION SERVICES FOR THE PERIOD JULY 1, 1971, TO JUNE 30, 1972, FOR VARIOUS NAVAL FACILITIES IN THE SIXTH NAVAL DISTRICT.

THE NAVAL FACILITIES ENGINEERING COMMAND, SOUTHEAST DIVISION, ON APRIL 22, 1970, ISSUED INVITATION FOR BIDS FOR CONTRACT NO. N62467-70-C 0418, REQUESTING BIDS FROM SMALL BUSINESS CONCERNS FOR REFUSE COLLECTION SERVICES AT VARIOUS NAVAL FACILITIES IN THE SIXTH NAVAL DISTRICT, FOR THE PERIOD JULY 1, 1970, TO JUNE 30, 1971. THE INVITATION PROVIDED THAT THE GOVERNMENT WOULD HAVE THE OPTION OF EXTENDING THE TERM OF THE CONTRACT AWARDED FOR AN ADDITIONAL PERIOD OF TWELVE MONTHS. THE LOW BID IN RESPONSE TO THE INVITATION WAS SUBMITTED BY CHARLESTON DISPOSAL SERVICE, INCORPORATED, IN THE TOTAL ESTIMATED AMOUNT OF $134,999.40 AS COMPARED TO YOUR BID PRICE OF $142,793.56. THE AWARD WAS MADE TO THE CHARLESTON DISPOSAL SERVICE FOR THE TERM ENDING JUNE 30, 1971.

AS STATED ABOVE, THE CONTRACT AS ADVERTISED AND AWARDED CONTAINED AN OPTION AUTHORIZING THE GOVERNMENT TO EXTEND THE CONTRACT PERIOD FOR AN ADDITIONAL YEAR. IT IS REPORTED THAT THE CONTRACTOR, CHARLESTON DISPOSAL SERVICE, HAD PERFORMED SATISFACTORILY DURING THE FIRST YEAR, AND SINCE IT WAS DETERMINED THAT A MORE FAVORABLE PRICE COULD NOT LIKELY BE OBTAINED THROUGH ADVERTISING, THE OPTION WAS EXERCISED ON JUNE 15, 1971, TO EXTEND THE EXISTING CONTRACT UNTIL JUNE 30, 1972.

SECTION 1-1505 OF THE ARMED SERVICES PROCUREMENT REGULATION AUTHORIZES CONTRACT OPTIONS TO BE EXERCISED UPON A DETERMINATION THAT SUCH ACTION IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. IN THIS CASE THE CONTRACTING OFFICER BEFORE EXERCISING THE OPTION DETERMINED THAT CHARLESTON DISPOSAL SERVICE'S PERFORMANCE HAD BEEN SATISFACTORY AND, BASED UPON AN INFORMAL EXAMINATION OF THE MARKET, THAT A MORE FAVORABLE PRICE COULD NOT LIKELY BE OBTAINED THROUGH READVERTISEMENT. WE NOTE IN THIS CONNECTION THAT LABOR COSTS HAVE ESCALATED. YOU ADVISED THE CONTRACTING AGENCY THAT IF THE SERVICES WERE READVERTISED YOUR BID WOULD BE AT LEAST $10,000 LOWER THAN THE EXISTING PRICES.

THE CONTRACTING OFFICER'S DETERMINATION INVOLVES A PROJECTION BASED ON EXISTING INFORMATION. AS IN ANY PROJECTION, IT ENTAILS A DEGREE OF UNCERTAINTY AND ANOTHER PERSON USING THE SAME INFORMATION MAY BE ABLE TO JUSTIFY A CONTRARY RESULT. WE DO NOT BELIEVE THAT THE CONTRACTING OFFICER'S DETERMINATION MUST BE BASED ON OVERWHELMING EVIDENCE. WE THINK IT IS SUFFICIENT IF HIS DETERMINATION IS MADE IN GOOD FAITH AND IS SUPPORTED BY SUBSTANTIAL EVIDENCE. WE FIND THESE CRITERIA SATISFIED IN THIS CASE.

FOR THE FOREGOING REASONS, WE FIND NO LEGAL BASIS TO QUESTION THE ADMINISTRATIVE ACTION TAKEN IN EXERCISING THE OPTION TO EXTEND THE CONTRACT WITH CHARLESTON DISPOSAL SERVICE. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.