B-177849, APR 9, 1973

B-177849: Apr 9, 1973

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BID PROTEST - UNPROFITABLE BID PRICE - APPLICATION OF SERVICE CONTRACT ACT DECISION DENYING PROTEST OF AWARD AT AN UNPROFITABLE PRICE STATES NO BEARING ON AWARD OR APPLICATION OF SERVICE CONTRACT ACT WHERE ACT IS PROVIDED FOR INVITATION. TO ARROW JANITORIAL SERVICE: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 12. YOU ALLEGE THAT DEPENDABLE JANITORIAL SERVICE IS NOT A RESPONSIBLE BIDDER INASMUCH AS YOUR COMPUTATION OF THE COSTS THAT A CONTRACTOR WILL OF NECESSITY INCUR IN PERFORMING THE CONTRACT INDICATES THAT DEPENDABLE CANNOT PERFORM THE REQUIRED SERVICES AT ITS BID PRICE AND BECAUSE YOU BELIEVE THAT IN AN EFFORT TO CUT ITS COSTS DEPENDABLE WILL PAY LABOR RATES LESS THAN THOSE MADE MANDATORY BY THE DEPARTMENT OF LABOR WAGE DETERMINATION WHICH WAS A PART OF THE INVITATION.

B-177849, APR 9, 1973

BID PROTEST - UNPROFITABLE BID PRICE - APPLICATION OF SERVICE CONTRACT ACT DECISION DENYING PROTEST OF AWARD AT AN UNPROFITABLE PRICE STATES NO BEARING ON AWARD OR APPLICATION OF SERVICE CONTRACT ACT WHERE ACT IS PROVIDED FOR INVITATION.

TO ARROW JANITORIAL SERVICE:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 12, 1973, PROTESTING AGAINST THE PROPOSED AWARD OF A FIXED-PRICE CONTRACT FOR CUSTODIAL SERVICES TO DEPENDABLE JANITORIAL SERVICE UNDER INVITATION FOR BIDS NO. DAHC23-73-B- 0014, ISSUED BY THE DIRECTORATE OF PROCUREMENT, WA MTMTS, OAKLAND ARMY BASE, CALIFORNIA.

YOU ALLEGE THAT DEPENDABLE JANITORIAL SERVICE IS NOT A RESPONSIBLE BIDDER INASMUCH AS YOUR COMPUTATION OF THE COSTS THAT A CONTRACTOR WILL OF NECESSITY INCUR IN PERFORMING THE CONTRACT INDICATES THAT DEPENDABLE CANNOT PERFORM THE REQUIRED SERVICES AT ITS BID PRICE AND BECAUSE YOU BELIEVE THAT IN AN EFFORT TO CUT ITS COSTS DEPENDABLE WILL PAY LABOR RATES LESS THAN THOSE MADE MANDATORY BY THE DEPARTMENT OF LABOR WAGE DETERMINATION WHICH WAS A PART OF THE INVITATION.

WE ARE ADVISED THAT A PRICE ANALYSIS CONDUCTED ON ALL RESPONSIVE BIDS, AS WELL AS A COMPARISON OF THESE BID PRICES WITH THE PRICES BEING PAID UNDER THE CURRENT CONTRACT FOR SUBSTANTIALLY THE SAME TYPE OF SERVICES, INDICATED THAT DEPENDABLE HAD OFFERED REASONABLE PRICES UNDER THE PRESENT INVITATION. DEPENDABLE, AS THE INCUMBENT CONTRACTOR, HAS BEEN PERFORMING THESE SERVICES IN A SATISFACTORY MANNER. FURTHER, WE ARE ADVISED THAT DEPENDABLE'S BID PRICE OF $255,003.76 ON SCHEDULE A OF THE INVITATION IS APPROXIMATELY 6.45 PERCENT LESS THAN THE GOVERNMENT ESTIMATE OF $271,467.00, AND ITS PRICE OF $56,540.61 ON SCHEDULE B IS APPROXIMATELY 8.4 PERCENT GREATER THAN THE GOVERNMENT ESTIMATE OF $51,787.00.

FROM THESE FACTS, IT WOULD APPEAR THAT THE PRICES SUBMITTED BY DEPENDABLE ARE REASONABLE. HOWEVER, EVEN ASSUMING THAT THEY ARE NOT, WE ARE AWARE OF NO LEGAL PRINCIPLE WHICH WOULD PRECLUDE AN AWARD TO DEPENDABLE SOLELY BECAUSE IT IS ALLEGED THAT IT MAY HAVE SUBMITTED AN UNPROFITABLE PRICE. -173384, SEPTEMBER 2, 1971. AS REGARDS YOUR SECOND CONTENTION, THE INVITATION SPECIFICALLY ADVISED BIDDERS THAT THE RESULTANT CONTRACT WOULD BE SUBJECT TO THE REQUIREMENTS OF THE SERVICE CONTRACT ACT. BECAUSE OF THIS AND BECAUSE THE APPLICABLE DEPARTMENT OF LABOR WAGE DETERMINATIONS WILL BE A PART OF THE CONTRACT, THE CONTRACTOR WILL BE OBLIGATED TO PAY THE PROPER WAGE RATES. FURTHER, THE SERVICE CONTRACT ACT PROVIDES FOR WITHHOLDINGS FROM CONTRACT EARNINGS, CONTRACT CANCELLATION AND DEBARMENT FROM FUTURE CONTRACTS IN THE EVENT OF VIOLATIONS OF CONTRACT LABOR STANDARDS. SEE 41 U.S.C. 352 354.

ACCORDINGLY, THE PROTEST IS DENIED.