Protest Against Bid Evaluation Provisions

B-196118: Jan 30, 1980

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A firm protested the proposed award of a contract alleging that it was the low bidder. The solicitation was issued for a fixed-price requirements type contract to operate Government-owned laundry facilities for laundry services. The invitation for bids (IFB) provided that the contract would be awarded to the lowest responsible bidder if the cost of contracting was lower than the Government's in-house cost estimate. This cost comparison was to be based on a 3-year cost estimate straightlined for the second and third years. Although the solicitation did not prohibit the submission of second and third year performance prices, they were not requested. The solicitation also contained an option provision giving the Government the right to renew the contract for a total duration of 3 years. The proposed awardee submitted a bid for the basic contract year; the protester submitted a bid for the basic contract year and prices for the second and third years. The protester's bid for the first year was the low bid. The contracting officer straightlined the proposed awardee's bid for the second and third years, and used the second and third year prices submitted by the protester to arrive at a 3-year estimated price. On the basis of this method it was determined that the proposed awardee was the low bidder. The protester agrued that the agency should have straightlined its first year bid to arrive at the cost of the 3-year contract. It believed that because the agency only requested a 1-year price, that it was the low bidder entitled to the contract award. GAO agreed that the protester was the low bidder if only its base year price was considered for the evaluation, but when its option prices were considered, an award to the protester would have resulted in significantly higher costs to the Government. Nonetheless, the solicitation did not provide for the evaluation of option prices for bid evaluation purposes. GAO believed the solicitation was defective because the provisions for bid evaluation did not adequately express the agency's intent to consider option prices for bid evaluation as well as for cost comparison purposes, and did not reflect the agency's actual reported needs. It was recommended that no award be made, the solicitation be cancelled, and the requirement be readvertised. Thus, the protest was denied in part and sustained in part.