B-240913, Sep 4, 1990, 90-2 CPD ***

B-240913, Sep 4, 1990, 90-2 CPD ***

PROCUREMENT - Sealed Bidding - Below-cost bids - Contract awards - Propriety DIGEST: 1. Submission and acceptance of a below-cost bid is not legally objectionable. PROCUREMENT - Sealed Bidding - Unbalanced bids - Allegation substantiation - Evidence sufficiency 2. Protest alleging that bid is unbalanced is dismissed for failure to state a valid basis of protest where the protester fails to establish likelihood that the bid in fact is mathematically and materially unbalanced.

Attorneys

B & G Enterprises, Inc.:

B & G Enterprises, Inc. protests the Department of the Air Force's award of a contract to CALWEST, under invitation for bids (IFB) No. F04607-90- B0009, for refuse collection at Norton Air Force Base in California. B & G alleges that CALWEST's bid should have been rejected because it is below -cost and unbalanced.

We dismiss the protest.

The IFB called for bids for a base year and 3 option years. CALWEST submitted the apparent low total bid of $1,045,760, including prices of $271,740 for each of the first 2 years and $251,140 for each of the last 2 years; B & G submitted the next low total bid of $1,199,280, averaging $299,820 per year and amounting to $153,520 more than CALWEST's bid. B & G argues that CALWEST's prices are below cost and that the prices for the first 2 years are "materially unbalanced" when compared with its prices for the last 2 years.

B & G has failed to state a valid basis for protest. First, submission and acceptance of a below-cost bid is not legally objectionable. Northwest Cleaning Serv., B-234780, May 31, 1989, 89-1 CPD Para. 523. Further, a bid is materially unbalanced only where the bid is mathematically unbalanced and there is a reasonable doubt that acceptance of the bid will result in the lowest overall cost to the government; such a bid cannot be accepted. OMSERV Corp., B-237691, Mar. 13, 1990, 90-1 CPD Para. 271. Except where a bid contains extreme front-loading, our analysis of whether bids are materially unbalanced between base and option years has hinged upon whether the agency reasonably anticipates exercise of the option. Western States Management Servs., Inc., B-235956.2, Dec. 7, 1989, 89-2 CPD Para. 524. CALWEST's bid is not extremely front-loaded, and B & G has neither argued that the price bid for the first 2 years was not reasonably related to the costs to be incurred by CALWEST, see Raeuber Constructors Co., Inc., B-236364, Nov. 3, 1989, 89-2 CPD Para. 420, nor questioned the likelihood that the options will be exercised. The fact that CALWEST bid different prices for the initial and subsequent contract years does not itself raise a reasonable doubt that acceptance of the bid will result in the lowest ultimate cost to the government.

Our Bid Protest Regulations contemplate that protesters will provide, at a minimum, either allegations or evidence sufficient, if uncontradicted, to establish the likelihood of the protester's claim of improper agency action. Professional Medical Prods., Inc., B-231743, July 1, 1988, 88-2 CPD Para. 2. As B & G has failed to establish a likelihood that CALWEST's bid is materially unbalanced or otherwise unacceptable, the protest is dismissed for failure to state a valid basis for protest.