B-175928, AUG 2, 1972

B-175928: Aug 2, 1972

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ABSENT ANY INDICATION THAT THE BID WAS NOT AS INTENDED OR ANY EVIDENCE OF ANY IRREGULARITY. THE BID MAY BE ACCEPTED IF IT IS OTHERWISE THE LOWEST ACCEPTABLE BID AND THE BIDDER IS RESPONSIBLE. GAO IS NOT AWARE OF ANY PROVISION OF LAW PREVENTING A BIDDER FROM OFFERING TO PERFORM AT A PRICE WHICH OTHERS MAY CONSIDER TOO LOW. IT HAS NOT BEEN SHOWN THAT THE GOVERNMENT'S ESTIMATES WERE INACCURATE. C. THE SUBJECT INVITATION WAS ISSUED ON FEBRUARY 16. BIDS WERE OPENED AND THE LOW BIDDER ON EACH LOT WAS REQUESTED TO CONFIRM ITS PRICES. ALL LOW BIDS WERE CONFIRMED. YOUR FIRM PROTESTED AGAINST ANY AWARD TO PACKAGING UNDER LOTS I THROUGH VI OF THE INVITATION BASED ON THE CONTENTION THAT PACKAGING'S BID WAS UNBALANCED IN THAT IT INDICATED "NO CHARGE" ON CERTAIN ITEMS.

B-175928, AUG 2, 1972

BID PROTEST - UNBALANCED BID - EFFECT OF VERIFICATION - DETERMINATION OF PRODUCTION ESTIMATES DENIAL OF PROTEST BY SPACE AGE ENGINEERING, INC., AGAINST THE AWARD OF A CONTRACT TO MANUFACTURER'S PACKAGING COMPANY, INC., UNDER AN IFB ISSUED BY THE U. S. NAVY PURCHASING OFFICE, WASHINGTON, D. C. WHERE A BIDDER HAS CONFIRMED A BID WHICH APPEARS TO BE UNBALANCED, ABSENT ANY INDICATION THAT THE BID WAS NOT AS INTENDED OR ANY EVIDENCE OF ANY IRREGULARITY, THE BID MAY BE ACCEPTED IF IT IS OTHERWISE THE LOWEST ACCEPTABLE BID AND THE BIDDER IS RESPONSIBLE. SEE 49 COMP. GEN. 335, 343 (1969). GAO IS NOT AWARE OF ANY PROVISION OF LAW PREVENTING A BIDDER FROM OFFERING TO PERFORM AT A PRICE WHICH OTHERS MAY CONSIDER TOO LOW, OR EVEN UNPROFITABLE. FURTHER, IT HAS NOT BEEN SHOWN THAT THE GOVERNMENT'S ESTIMATES WERE INACCURATE, NOR CAN IT BE CONCLUDED THAT THE AGENCY ACTED IMPROPERLY IN BASING ITS ESTIMATES ON CURRENT EXPECTATIONS RATHER THAN HISTORICAL USAGE.

TO SPACE AGE ENGINEERING, INC.:

WE REFER TO YOUR LETTER DATED MAY 8, 1972, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A CONTRACT TO MANUFACTURER'S PACKAGING COMPANY, INCORPORATED (PACKAGING), UNDER INVITATION FOR BIDS (IFB) NO. N00600-72-B- 0176, ISSUED BY THE UNITED STATES NAVY PURCHASING OFFICE, WASHINGTON, D. C.

THE SUBJECT INVITATION WAS ISSUED ON FEBRUARY 16, 1972, SOLICITING BIDS FOR FIRM-FIXED PRICE INDEFINITE QUANTITY CONTRACTS FOR OFF LOADING, SCREENING, IDENTIFICATION INVENTORY, UP DATING, DATA PROCESSING, DISTRIBUTION, MODIFIED SUPPLY OVERHAUL, AND EQUIPMENT VALIDATION SERVICE AT SIX INACTIVE SHIP MAINTENANCE FACILITIES AND AT FOUR LOCATIONS FOR THE NATIONAL DEFENSE RESERVE FLEET. ON APRIL 13, 1972, BIDS WERE OPENED AND THE LOW BIDDER ON EACH LOT WAS REQUESTED TO CONFIRM ITS PRICES. ALL LOW BIDS WERE CONFIRMED. BY LETTER DATED APRIL 17, YOUR FIRM PROTESTED AGAINST ANY AWARD TO PACKAGING UNDER LOTS I THROUGH VI OF THE INVITATION BASED ON THE CONTENTION THAT PACKAGING'S BID WAS UNBALANCED IN THAT IT INDICATED "NO CHARGE" ON CERTAIN ITEMS. YOUR PROTEST TO THE PROCUREMENT ACTIVITY WAS DENIED BY LETTER OF MAY 3 FROM THE ASSISTANT DIRECTOR, PURCHASE DIVISION. ON THE SAME DATE PACKAGING WAS AWARDED A CONTRACT FOR LOTS I THROUGH V AS THE LOW BIDDER. ON MAY 5, AWARD WAS MADE TO TONI BARE ENTERPRISES, AS LOW BIDDER ON LOT VI.

YOU BASE YOUR PROTEST ON THE CONTENTION THAT PACKAGING'S BID IS UNBALANCED IN THAT ITEMS 0001AB AND 0007AB WHICH REQUIRE WORK TO BE PERFORMED DURING OTHER THAN NORMAL WORKING HOURS WERE PRICED AS "NO CHARGE". IN ADDITION, YOU ALLEGE PACKAGING'S "NO CHARGE" BID FOR OTHER ITEMS REQUIRING THE EXPENDITURE OF SUBSTANTIAL MANPOWER FURTHER UNBALANCES THEIR BID.

THE FACT THAT A BID MAY BE UNBALANCED DOES NOT RENDER IT NONRESPONSIVE, NOR DOES SUCH FACTOR OF ITSELF INVALIDATE AN AWARD OF A CONTRACT TO SUCH BIDDER. THEREFORE, IN A CASE SUCH AS THE ONE BEFORE US, WHERE A BIDDER HAS CONFIRMED A BID WHICH APPEARS TO BE UNBALANCED, ABSENT ANY INDICATION THAT THE BID WAS NOT AS INTENDED OR ANY EVIDENCE OF ANY IRREGULARITY WE HAVE HELD THAT THE BID MAY BE ACCEPTED IF IT IS OTHERWISE THE LOWEST ACCEPTABLE BID AND THE BIDDER IS RESPONSIBLE. SEE 49 COMP. GEN. 335, 343 (1969) AND CASES CITED THEREIN.

YOU FURTHER ASSERT THAT IF THE GOVERNMENT'S ESTIMATED QUANTITIES ARE REALISTIC, AS ASSERTED BY THE AGENCY, THEN PACKAGING FACES FINANCIAL RUIN DUE TO ITS "NO CHARGE" PRICES. WE ARE NOT AWARE OF ANY PROVISION OF LAW PREVENTING A BIDDER FROM OFFERING TO PERFORM AT A PRICE WHICH OTHERS MAY CONSIDER TOO LOW, OR EVEN UNPROFITABLE. SEE B-173362, SEPTEMBER 29, 1971, AND CASES CITED THEREIN.

NEXT, YOU CONTEND THAT THE GOVERNMENT'S ESTIMATED QUANTITY FOR ITEM 0007AB OF THE INVITATION CANNOT BE ACCURATE SINCE PARAGRAPH F.B. 1.2.7 OF THE SCHEDULE SPECIFIES THAT WORKING DAYS MAY NOT EXCEED 5 HOURS PER DAY. PARAGRAPH F.B. 1.2.7 WAS CHANGED BY AMENDMENT #1 TO THE SUBJECT INVITATION TO PROVIDE THAT WORKING HOURS MAY OR MAY NOT EXCEED 5 OR 6 HOURS PER WORKING DAY AT THE DISCRETION OF THE FLEET SUPERVISOR.

FINALLY, YOU ASSERT THAT THE GOVERNMENT'S QUANTITY ESTIMATES ARE WHOLLY UNREALISTIC BASED ON HISTORICAL USAGE AND THEREFORE, INCUMBENT CONTRACTORS WHO HAD FIRST-HAND KNOWLEDGE OF PAST REQUIREMENTS WERE AT AN ADVANTAGE IN PREPARING THEIR BIDS. IT IS THE AGENCY'S POSITION THAT THE ESTIMATES WERE BASED ON CURRENT EXPECTATIONS RATHER THAN EXCLUSIVELY ON HISTORICAL USAGE AND ARE VALID ESTIMATES OF THE AGENCY'S EXPECTED USAGE DURING THE PROJECTED CONTRACT PERIOD.

WHERE AS HERE THE NUMBER OF UNITS OF WORK TO BE PERFORMED UNDER THE CONTRACT TO BE AWARDED CANNOT BE DETERMINED IN ADVANCE, THE BIDS MUST BE EVALUATED ON THE BASIS OF THE ESTIMATED NUMBER OF WORK UNITS TO BE ACCOMPLISHED UNDER THE CONTRACT. SEE 47 COMP. GEN. 272 (1967). BASED ON THE EVIDENCE CONTAINED IN THE RECORD WE CANNOT SAY THAT THE GOVERNMENT'S ESTIMATES WERE INACCURATE, NOR ARE WE PREPARED TO CONCLUDE THAT THE AGENCY ACTED IMPROPERLY IN BASING ITS ESTIMATES ON CURRENT EXPECTATIONS RATHER THAN HISTORICAL USAGE.

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.