B-175297, JUL 10, 1972

B-175297: Jul 10, 1972

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IT IS THE OPINION OF THE COMP. THAT A LOW BID ON THE BASE ITEM WHICH EXCEEDS THE CONTROL AMOUNT MAY NOT BE DISPLACED BY ANOTHER BID BECAUSE ADDITIONAL FUNDING IS SUBSEQUENTLY MADE AVAILABLE. THERE ARE NO REQUIREMENTS IN ASPR THAT THE CONTROL AMOUNT BE IDENTICAL TO THE ENTIRE AMOUNT AUTHORIZED. ESPECIALLY WHERE REASONABLE DEDUCTIONS ARE MADE IN DETERMINING THE CONTROL FIGURE. MUST CONCLUDE THAT AWARD WAS PROPERLY MADE TO VOIGHT AND MORGEN'S PROTEST IS DENIED. BLEWETT AND WEAVER: FURTHER REFERENCE IS MADE TO YOUR LETTERS OF APRIL 22. BID PRICES WERE REQUESTED FOR THE BASE BID ITEM (ITEM 1) AND ON THREE ADDITIVE ITEMS (ITEM/NOS. 2. " READING AS FOLLOWS: "THE LOW BIDDER FOR PURPOSE OF AWARD SHALL BE THE CONFORMING RESPONSIBLE BIDDER OFFERING THE LOW AGGREGATE AMOUNT FOR THE FIRST OF BASE BID ITEM PLUS (IN THE ORDER OF PRIORITY LISTED IN THE SCHEDULE) THOSE ADDITIVE BID ITEMS PROVIDING THE MOST FEATURES OF THE WORK WITHIN THE FUNDS DETERMINED BY THE GOVERNMENT TO BE AVAILABLE BEFORE BIDS ARE OPENED.

B-175297, JUL 10, 1972

BID PROTEST - ADDITIVE ITEMS - DETERMINATION OF LOW BIDDER DECISION DENYING THE PROTEST OF MORGEN-OSWOOD & ASSOCIATES, INC. OF FLORIDA AGAINST AWARD OF A CONTRACT TO VOIGHT CONSTRUCTION COMPANY UNDER AN IFB ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND. IT IS THE OPINION OF THE COMP. GEN. THAT A LOW BID ON THE BASE ITEM WHICH EXCEEDS THE CONTROL AMOUNT MAY NOT BE DISPLACED BY ANOTHER BID BECAUSE ADDITIONAL FUNDING IS SUBSEQUENTLY MADE AVAILABLE. TO DECIDE OTHERWISE WOULD ALLOW THE CONTRACTING OFFICER TO SUBJECTIVELY SELECT A PARTICULAR BIDDER BY OBTAINING ONLY A CERTAIN AMOUNT OF FUNDS. B 170795, OCTOBER 6, 1970. FURTHER, THERE ARE NO REQUIREMENTS IN ASPR THAT THE CONTROL AMOUNT BE IDENTICAL TO THE ENTIRE AMOUNT AUTHORIZED, ESPECIALLY WHERE REASONABLE DEDUCTIONS ARE MADE IN DETERMINING THE CONTROL FIGURE. B-170168, SEPTEMBER 10, 1970. FOR THE FOREGOING REASONS, THE COMP. GEN. MUST CONCLUDE THAT AWARD WAS PROPERLY MADE TO VOIGHT AND MORGEN'S PROTEST IS DENIED.

TO JARDINE, STEPHENSON, BLEWETT AND WEAVER:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF APRIL 22, MARCH 2 AND MARCH 31, 1972, PROTESTING ON BEHALF OF MORGEN-OSWOOD & ASSOCIATES, INC. OF FLORIDA (MORGEN), THE AWARD OF A CONTRACT TO VOIGT CONSTRUCTION COMPANY (VOIGT) UNDER INVITATION FOR BIDS (IFB) N62467-68-B-0348, ISSUED JANUARY 7, 1972, BY THE NAVAL FACILITIES ENGINEERING COMMAND.

THE INVITATION REQUESTED BIDS FOR THE CONSTRUCTION OF A PRODUCTION SHOP, FIRST INCREMENT, AT THE NAVAL TRAINING DEVICE CENTER, ORLANDO, FLORIDA. BID PRICES WERE REQUESTED FOR THE BASE BID ITEM (ITEM 1) AND ON THREE ADDITIVE ITEMS (ITEM/NOS. 2, 3 AND 4). PURSUANT TO PARAGRAPH 2-201(B) (XLI) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), PARAGRAPH 1D.4 OF THE INVITATION CONTAINED THE CLAUSE ENTITLED "ADDITIVE ITEMS," READING AS FOLLOWS:

"THE LOW BIDDER FOR PURPOSE OF AWARD SHALL BE THE CONFORMING RESPONSIBLE BIDDER OFFERING THE LOW AGGREGATE AMOUNT FOR THE FIRST OF BASE BID ITEM PLUS (IN THE ORDER OF PRIORITY LISTED IN THE SCHEDULE) THOSE ADDITIVE BID ITEMS PROVIDING THE MOST FEATURES OF THE WORK WITHIN THE FUNDS DETERMINED BY THE GOVERNMENT TO BE AVAILABLE BEFORE BIDS ARE OPENED. IF ADDITION OF ANOTHER BID ITEM IN THE LISTED ORDER OF PRIORITY WOULD MAKE THE AWARD EXCEED SUCH FUNDS FOR ALL BIDDERS, IT SHALL BE SKIPPED AND THE NEXT SUBSEQUENT ADDITIVE BID ITEM IN A LOWER AMOUNT SHALL BE ADDED IF AWARD THEREON CAN BE MADE WITHIN SUCH FUNDS. FOR EXAMPLE, WHEN THE AMOUNT AVAILABLE IS $100,000 AND A BIDDER'S BASE BID AND FOUR SUCCESSIVE ADDITIVES ARE $85,000, $10,000, $8,000, $6,000 AND $4,000, THE AGGREGATE AMOUNT OF THE BID FOR PURPOSES OF AWARD WOULD BE $99,000 FOR THE BASE BID PLUS THE FIRST AND FOURTH ADDITIVES, THE SECOND AND THIRD ADDITIVES BEING SKIPPED BECAUSE EACH OF THEM WOULD CAUSE THE AGGREGATE BID TO EXCEED $100,000. IN ANY CASE ALL BIDS SHALL BE EVALUATED ON THE BASIS OF THE SAME ADDITIVE BID ITEMS, DETERMINED AS ABOVE PROVIDED. THE LISTED ORDER OF PRIORITY NEED TO BE FOLLOWED ONLY FOR DETERMINING THE LOW BIDDER. AFTER DETERMINATION OF THE LOW BIDDER AS STATED, AWARD IN THE BEST INTEREST OF THE GOVERNMENT MAY BE MADE TO HIM ON HIS BASE BID AND ANY COMBINATION OF HIS ADDITIVE BID FOR WHICH FUNDS ARE DETERMINED TO BE AVAILABLE AT THE TIME OF THE AWARD, PROVIDED THAT AWARD ON SUCH COMBINATION OF BID ITEMS DOES NOT EXCEED THE AMOUNT OFFERED BY ANY OTHER CONFORMING RESPONSIBLE BIDDER FOR THE SAME COMBINATION OF BID ITEMS."

BID OPENING WAS HELD ON FEBRUARY 17, 1972, AND BIDS WERE RECEIVED FROM 11 BIDDERS, EACH BIDDER SUBMITTING A BID ON EACH OF THE 4 ITEMS. THE BIDS OF THE TWO LOWEST BIDDERS AND THE CONTROL AMOUNT WERE AS FOLLOWS:

CONTROL

BID ITEM VOIGT MORGEN AMOUNT

1 (BASE BID)$1,431,750 $1,433,650 $1,422,959

2 23,177 21,800

3 28,962 22,500

4 21,000 19,600

WHILE THE CONTROL AMOUNT WAS INSUFFICIENT TO COVER THE BASE BID ITEM, IT IS REPORTED THE AMOUNT OF FUNDS WHICH COULD ACTUALLY BE MADE AVAILABLE FOR THE PROJECT WAS FLEXIBLE, DEPENDING UPON REAPPORTIONMENTS FROM OTHER PROJECTS, AND THE CONTROL AMOUNT WAS THEREAFTER INCREASED TO ENCOMPASS ITEMS 1 AND 2. AWARD OF ITEMS 1 AND 2 WAS MADE TO VOIGT AS THE LOWEST BIDDER ON THE BASE BID ITEM AND THE FIRST ADDITIVE ITEM.

IT IS YOUR CONTENTION THAT SINCE MORGEN'S BID WAS LOW ON THE AGGREGATE TOTAL OF ITEMS 1, 2, 3, AND 4 AND IS WITHIN THE AMOUNT OF $1,665,000 AUTHORIZED BY PUBLIC LAW 91-511, 84 STAT. 1204, 1210, IT SHOULD HAVE BEEN AWARDED A CONTRACT FOR ALL FOUR ITEMS. IN THIS REGARD, YOU MAINTAIN THAT AWARD OF ITEMS 1 AND 2 ALONE WILL NOT PROVIDE THE GOVERNMENT WITH A USABLE FACILITY UNLESS, AT A MINIMUM, ITEM 4 (AN OVERHEAD CRANE) IS INCLUDED IN THE AWARD. IN ADDITION, YOU QUESTION THE METHOD THE NAVY USED TO CALCULATE THE CONTROL AMOUNT.

IT SHOULD INITIALLY BE NOTED THAT MORGEN WAS NOT THE LOW BIDDER ON ITEM 1 (THE BASE BID ITEM), AND PURSUANT TO THE ABOVE-QUOTED CLAUSE THE LOW BIDDER FOR PURPOSE OF AWARD IS THAT BIDDER OFFERING THE LOWEST PRICE FOR THE BASE BID ITEM PLUS AS MANY OF THE ADDITIVE ITEMS WHICH ARE WITHIN THE CONTROL AMOUNT. THE CONTROL AMOUNT, WITHIN THE CONTEXT OF THE ADDITIVE ITEMS CLAUSE, REPRESENTS "THE FUNDS DETERMINED BY THE GOVERNMENT TO BE AVAILABLE BEFORE BIDS ARE OPENED." IN ARRIVING AT THE CONTROL FIGURE, THERE WAS DEDUCTED FROM THE $1,665,000 AUTHORIZED FOR THE PROJECT, THE CONTRACTING OFFICER'S "OVERHEAD" FOR ADMINISTERING THE CONTRACT ($94,245), A CONTINGENCY RESERVE ($142,796) AND POST AWARD ENGINEERING EXPENSES ($5,000). THUS, THE CONTROL AMOUNT FOR DETERMINING THE LOW BIDDER WAS RECORDED AS $1,422,959, PRIOR TO BID OPENING, IN ACCORDANCE WITH STANDARD PRACTICE. WHILE THE CONTROL AMOUNT SO ESTABLISHED IS LESS THAN THE AMOUNT REQUIREMENTS IN ASPR, OR THE PERTINENT STATUTES, THAT THE CONTROL AMOUNT SET OUT IN THE AUTHORIZATION ACT FOR THE PROJECT, WE DO NOT FIND ANY REQUIREMENTS IN ASPR, OR THE PERTINENT STATUTES, THAT THE CONTROL AMOUNT FOR DETERMINING THE LOW BIDDER BE IDENTICAL TO THE AMOUNT AUTHORIZED, NOR DO WE FIND A COMPELLING BASIS FOR OBJECTING TO THE DEDUCTION FROM THE AUTHORIZED AMOUNT OF REASONABLE AMOUNTS FOR CONTINGENCIES, ADMINISTRATIVE EXPENSES, ETC., IN DETERMINING THE CONTROL FIGURE. SEE B-170168, SEPTEMBER 10, 1970.

IN OUR DECISION B-170795, OCTOBER 6, 1970, WE COMMENTED ON AWARDING THE CONTRACT TO THE LOW BIDDER ON THE BASE BID ITEM, WHEN ALL OF THE QUOTES ON THE BASE BID ITEM WERE ABOVE THE CONTROL AMOUNT, AS FOLLOWS:

"IN SUCH A SITUATION WHERE FUNDS DETERMINED AVAILABLE PRIOR TO BID OPENING ARE INSUFFICIENT TO COVER THE LOWEST BASE BID, AWARD COULD BE MADE, IF FUNDS CAN BE OBTAINED, ONLY TO THE BIDDER SUBMITTING THE LOWEST BID ON THE LEAST WORK. OF COURSE AFTER THE FUNDS ARE OBTAINED AWARD COULD ALSO INCLUDE AN ADDITIVE BUT ONLY IF SOME OTHER RESPONSIBLE BIDDER HAD NOT SUBMITTED A LOWER BID ON THAT COMBINATION. IN EITHER SITUATION BIDDERS HAVE BEEN ADVISED OF THE FEWEST FEATURES OF WORK FOR WHICH BIDS MAY BE SUBMITTED AND AS SUCH ARE BIDDING ON AN EQUAL BASIS. FURTHER, NO MATTER WHAT AMOUNT OF FUNDS THE CONTRACTING OFFICER ACTUALLY OBTAINS, AWARD CAN BE MADE ONLY TO THE BIDDER SUBMITTING THE LOWEST PRICE FOR THE FEWEST FEATURES OF THE WORK PLUS ANY SUBSEQUENT INCREASE IN THE WORK EITHER BY AN ADDITIVE OR BY RESTORING A DEDUCTIVE FOR WHICH THE SAME BIDDER HAD ALSO SUBMITTED THE LOWEST AGGREGATE BID PRICE. AS A RESULT THE CONTRACTING OFFICER CAN NOT SUBJECTIVELY OR OTHERWISE SELECT A PARTICULAR BIDDER BY OBTAINING ONLY A CERTAIN AMOUNT OF FUNDS."

OUR OFFICE IS OF THE VIEW THAT ONCE A BIDDER IS DETERMINED TO HAVE SUBMITTED THE LOW BID ON THE BASE BID ITEM WHICH EXCEEDS THE CONTROL AMOUNT, SUCH BIDDER MAY NOT BE DISPLACED BY ANOTHER BIDDER WHEN ADDITIONAL FUNDING IS MADE AVAILABLE FOR THAT AND ADDITIONAL ITEMS. B 170168, SUPRA, AND B-173471, NOVEMBER 19, 1971. ACCORDINGLY, AWARD COULD NOT HAVE BEEN MADE TO MORGEN HAD FUNDS SUBSEQUENTLY BEEN MADE AVAILABLE FOR THE PROCUREMENT OF ALL FOUR ITEMS.

CONTRARY TO YOUR ALLEGATION THAT AWARD OF THE CONTRACT FOR ITEMS 1 AND 2 ALONE WILL NOT PROVIDE A USABLE FACILITY, IT HAS BEEN REPORTED THAT WHILE THE OVERHEAD CRANE AND ASPHALT WEARING COURSE OVER PAVED AREAS ARE DESIRED OPTIONAL ITEMS, THEY ARE NOT INDISPENSABLE FOR A USABLE STRUCTURE. WHILE THE REQUESTING ACTIVITY MAY INITIATE ACTION IN THE FUTURE TO PROCURE THE OTHER ADDITIVE ITEMS, WE CANNOT SAY THAT SUCH ADDITIVE WORK SHOULD BE CURRENTLY PERFORMED. SINCE THE USING AGENCY MAY DETERMINE THE EXTENT OF ITS CONSTRUCTION PROJECTS IN THE LIGHT OF AVAILABLE FUNDS AND PRIORITIES, WE SEE NO BASIS FOR YOUR CONTENTION THAT THE AGENCY SHOULD HAVE AWARDED THE ADDITIVE ITEMS UNDER THE SUBJECT SOLICITATION, PARTICULARLY SINCE THE BID OF THE LOW BIDDER ON THE BASE ITEM WOULD NOT HAVE REMAINED LOW FOR ALL ITEMS AND AWARD FOR ALL ITEMS UNDER SUCH CIRCUMSTANCES WAS SPECIFICALLY PRECLUDED BY THE TERMS OF THE IFB. SEE B-170168, SUPRA.

IN REGARDS TO THE NAVY'S CALCULATION OF THE CONTROL AMOUNT, WE HAVE BEEN INFORMALLY ADVISED THAT THE MATHEMATICAL EQUATION USED BY THE NAVY ($1,655,000 DIVIDED BY 1.06 DIVIDED BY 1.10 - $5,000 $1,422,959) IS A ONE- STEP COMPUTERIZED METHOD TO APPROXIMATE DEDUCTIONS OF 6 PERCENT FOR ADMINISTERING THE CONTRACT AND 10 PERCENT FOR A CONTINGENCY RESERVE, AND A DEDUCTION OF $5,000 FOR ENGINEERING FROM THE AUTHORIZED AMOUNT. WE HAVE ALSO BEEN ADVISED THAT NAVY REGULATIONS DO NOT REQUIRE USE OF EXACT 6 PERCENT AND 10 PERCENT DEDUCTIONS IN THE COMPUTATION OF THE CONTROL FIGURE.

ACCORDINGLY, YOUR PROTEST IS DENIED.