B-162092, NOVEMBER 9, 1967, 47 COMP. GEN. 233

B-162092, NOVEMBER 9, 1967, 47 COMP. GEN. 233

BIDS - EVALUATION - AGGREGATE V SEPARABLE ITEMS, PRICES, ETC. - SINGLE V MULTIPLE AWARDS THE AWARD OF A SINGLE JANITORIAL SERVICE CONTRACT AT A HIGHER COST THAN THE AWARD OF MULTIPLE CONTRACTS WOULD HAVE COST ON THE BASIS THAT THE AGGREGATE AWARD WOULD PERMIT CENTRALIZED MANAGEMENT BY THE CONTRACTOR HAVING A SUPERIOR PERFORMANCE RECORD AND GOVERNMENT ADMINISTRATION OF ONE CONTRACT, AND THAT THE SAVINGS EFFECTED BY MAKING MULTIPLE AWARDS WOULD BE MINIMAL COMPARED WITH THE MAGNITUDE OF THE CONTRACT, IS NOT JUSTIFIED ABSENT THE OFFSET OF THE HIGHER PRICE BY ADMINISTRATIVE SAVINGS AND THE INCLUSION IN THE INVITATION OF PROVISIONS FOR SUCH AN AWARD AND THE ESTABLISHMENT OF ADMINISTRATIVE COST SAVINGS FOR USE IN EVALUATING BIDS PURSUANT TO PARAGRAPH 2-201 (B) (XIX) OF THE ARMED SERVICES PROCUREMENT REGULATION, AND AS AN AWARD MAY BE JUSTIFIED ON THE BASIS OF REFERENCE IN 10 U.S.C. 2305 (C) TO "PRICE AND OTHER FACTORS CONSIDERED" ONLY WHEN A LOW BIDDER IS NOT QUALIFIED, SHOULD THE LOW BIDDER ON SEVERAL OF THE INVITATION ITEMS QUALIFY AND BE WILLING TO ACCEPT AN AWARD, THESE ITEMS SHOULD BE DELETED FROM THE CONTRACT AND REAWARDED.

TO THE SECRETARY OF THE ARMY, NOVEMBER 9, 1967:

REFERENCE IS MADE TO A LETTER OF SEPTEMBER 28, 1967, OASA (I AND L) (PP), FORWARDING A REPORT ON THE PROTEST OF DANIELS-HAWAII, LTD., UNDER SOLICITATION NO. DAGA-01-67-B-0174, COVERING JANITORIAL SERVICES AT FORT SHAFTER, FORT DERUSSY, SCHOFIELD BARRACKS AND OTHER ARMY INSTALLATIONS IN HAWAII.

THE INVITATION REQUIRED THE BIDDER TO QUOTE PRICES ON ALL ITEMS, NAMELY 1, 1A, 1B, 2, 2A, 3, 4, 4A, AND 5. THE INVITATION FURTHER PROVIDED:"AWARD: AWARD WILL BE MADE ON EITHER A OR B AS FOLLOWS:

"A - ON AN -ALL OR NONE- BASIS FOR ITEMS 1, 1A, 1B, 2 AND 2A INCLUSIVE, AND A SEPARATE AWARD ON ITEM 3, 4 AND 4A.

"B - ON ITEM 5.' ITEM 5 WAS FOR ALL THE WORK CALLED FOR UNDER ITEMS 1 THROUGH 4A INCLUSIVE. THIS AWARD CLAUSE RESERVED TO THE GOVERNMENT THE RIGHT TO MAKE TWO SEPARATE AWARDS BY AREAS OR TO MAKE AWARD FOR ALL ITEMS TO A CONTRACTOR ON THE BASIS OF HIS AGGREGATE BID UNDER ITEM 5. SEVEN BIDS WERE RECEIVED; THE CONTRACTING OFFICER EVALUATED THE THREE LOW BIDS ON BOTH A MULTIPLE AWARD BASIS AND ON A SINGLE AWARD BASIS, TAKING INTO CONSIDERATION ALL DISCOUNTS OFFERED. NOTWITHSTANDING THAT A SAVING COULD BE RELIZED BY MAKING MULTIPLE AWARDS, THE CONTRACTING OFFICER DETERMINED THAT AWARD ON THE BASIS OF THE LOW AGGREGATE OR TOTAL BID UNDER ITEM 5 WAS IN THE BEST INTEREST AND TO THE ADVANTAGE OF THE GOVERNMENT. AWARD OF THE TOTAL PROCUREMENT WAS MADE TO PYRAMID ENTERPRISES, INCORPORATED, ON JUNE 26, 1967.

THE GENERAL RULE, WHERE THE GOVERNMENT HAS RESERVED THE RIGHT TO AWARD ITEMS SEPARATELY OR IN THE AGGREGATE, IS THAT AWARDS ARE PERMITTED TO BE MADE TO ONE OR MORE BIDDERS FOR ONE OR MORE ITEMS OR TO ONE BIDDER FOR ALL ITEMS, DEPENDING ON WHICH IS MORE IN THE INTEREST OF THE GOVERNMENT. 149085, AUGUST 28, 1962. IN THIS INSTANCE THE CONTRACTING OFFICER FELT AN AGGREGATE AWARD WAS IN THE BEST INTEREST OF THE GOVERNMENT IN THAT IT WOULD PROVIDE CENTRALIZED MANAGEMENT BY ONE CONTRACTOR AND ADMINISTRATION OF ONLY ONE CONTRACT, ALLOW TOTAL AWARD TO A CONTRACTOR WITH A SUPERIOR PERFORMANCE RECORD, AND THE SAVING OF OVER $3,000 WAS MINIMAL COMPARED WITH THE MAGNITUDE OF THE CONTRACT. WE DO NOT CONCUR WITH THIS DECISION. AWARD SHOULD BE MADE TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. 10 U.S.C. 2305 (C). THIS OFFICE HAS HELD THAT PROVISION TO REQUIRE AWARD TO THE LOW BIDDER WITH CERTAIN EXCEPTIONS NOT APPLICABLE HERE. 37 COMP. GEN. 330; 28 ID. 662.

WHEN THE CONTRACTING OFFICER RESERVES THE RIGHT TO MAKE MULTIPLE AWARDS ARMED SERVICES PROCUREMENT REGULATION 2-201 (B) (XIX) REQUIRES SUBSTANTIALLY THE FOLLOWING PROVISION TO BE INSERTED IN THE INVITATION: "EVALUATION OF BIDS. IN ADDITION TO OTHER FACTORS, BIDS WILL BE EVALUATED ON THE BASIS OF ADVANTAGES OR DISADVANTAGES TO THE GOVERNMENT THAT MIGHT RESULT FROM MAKING MORE THAN ONE AWARD (MULTIPLE AWARDS). FOR THE PURPOSE OF MAKING THIS EVALUATION, IT WILL BE ASSUMED THAT THE SUM OF $50 WOULD BE THE ADMINISTRATIVE COST TO THE GOVERNMENT FOR ISSUING AND ADMINISTERING EACH CONTRACT AWARDED UNDER THIS INVITATION, AND INDIVIDUAL AWARDS WILL BE FOR THE ITEMS AND COMBINATIONS OF ITEMS WHICH RESULT IN THE LOWEST AGGREGATE PRICE TO THE GOVERNMENT, INCLUDING SUCH ADMINISTRATIVE COSTS.' THE CONTRACTING OFFICER SHOULD HAVE USED THE METHOD PRESCRIBED BY REGULATION IN EVALUATING THE BIDS. FURTHER, THIS OFFICE HAS HELD THAT IN DETERMINING THE BEST INTEREST OF THE GOVERNMENT THE PHRASE "PRICE AND OTHER FACTORS CONSIDERED" DOES NOT JUSTIFY AWARD TO OTHER THAN THE LOW BIDDER, UNLESS THAT BIDDER IS FOUND NOT QUALIFIED. 37 COMP. GEN. 550. CONSIDERATIONS OF CENTRALIZED MANAGEMENT AND ADMINISTRATION JUSTIFY AN AGGREGATE AWARD AT A HIGHER PRICE ONLY WHEN THE HIGHER COST IS OFFSET BY ADMINISTRATIVE SAVINGS; AND EVEN IN THOSE CIRCUMSTANCES THE INVITATION MUST PROVIDE FOR SUCH AWARD AND ESTABLISH THE ADMINISTRATIVE COST SAVING TO BE USED IN BID EVALUATION.

THE LANGUAGE OF THE INVITATION SET OUT ABOVE CALLS FOR AN AGGREGATE AWARD OR SEPARATE AWARDS BY AREAS. AWARD FOR ITEMS 1, 1A, 1B, 2 AND 2A WAS TO BE MADE ON AN "ALL OR NONE" BASIS WITH A SEPARATE AWARD FOR ITEMS 3, 4, AND 4A. THE LANGUAGE USED IMPLIES ONLY A SINGLE AWARD FOR THE LATTER THREE ITEMS, NOT THREE INDIVIDUAL AWARDS. THIS OFFICE HAS TAKEN THE POSITION THAT THE USE OF THE TERM "AWARD" IN THE SINGULAR WITHOUT FURTHER EXPLANATION COULD WELL LEAD THE BIDDERS TO ASSUME THAT BIDS WERE SOLICITED, AND THAT AWARD WOULD BE MADE, ON AN "ALL OR NONE" BASIS. 143263, JULY 28, 1960. IN THIS CASE THE CONCLUSION IS SUPPORTED BY THE FACT THAT THE WORK TO BE PERFORMED UNDER ITEMS 4 AND 4A INVOLVE THE SAME BUILDING. IT IS UNLIKELY THAT THE CONTRACTING OFFICER INTENDED TO HAVE ONE CONTRACTOR DOING THE GENERAL CLEANING OF A BUILDING (ITEM 4) AND ANOTHER CONTRACTOR CLEANING BOTH SIDES OF THE WINDOWS WITH BARS (ITEM 4A). THE PROBLEMS OF ADMINISTRATION AND COORDINATION OF SEPARATE CONTRACTS FOR ITEMS 4 AND 4A NEGATE THE DRAWING OF SUCH AN INFERENCE IN THE ABSENCE OF CLEAR EVIDENCE THAT TWO CONTRACTS WERE INTENDED. FURTHER, THE RECORD INDICATES THAT THE CONTRACTING OFFICER IN EVALUATING THE BIDS CONSIDERED ONLY A SINGLE AWARD FOR ITEMS 3, 4 AND 4A. THEREFORE, IN VIEW OF THE INTERRELATION OF ITEMS 4 AND 4A AND THE LANGUAGE OF THE INVITATION, WE FIND NO BASIS FOR INTERPRETING A "SEPARATE AWARD" TO MEAN INDIVIDUAL AWARDS FOR EACH ITEM. RATHER, WE CONCLUDE ONE AWARD FOR ITEM 3, 4, AND 4A, OR THE SCHOFIELD BARRACKS AREA WAS INTENDED.

THE CONTRACTING AGENCY SHOULD INCLUDE THE CLAUSE APPEARING IN ARMED SERVICES PROCUREMENT REGULATION SECTION 2-201 (B) (XIX), ENTITLED "EVALUATION OF BIDS" , IN ANY SOLICITATION FOR A SIMILAR PROCUREMENT IN THE FUTURE. FURTHER, FOR THE REASONS STATED THE AWARD OF ITEMS 3, 4, AND 4A SHOULD BE DELETED FROM THE CONTRACT WITH PYRAMID ENTERPRISES. HOWEVER, IF DANIELS-HAWAII, THE LOW BIDDER, IS NOW UNWILLING TO ACCEPT AWARD OF THOSE ITEMS, OR IF THAT COMPANY IS NOT AN OTHERWISE ACCEPTABLE BIDDER, THE CONTRACT WITH PYRAMID ENTERPRISES MAY BE ALLOWED TO REMAIN AS AWARDED.