B-176636, NOV 7, 1972

B-176636, NOV 7, 1972

BID PROTEST - SCHEDULE BIDDING - EXCEPTION TO SINGLE AND MULTIPLE AWARDS - OPTION PROVISIONS DENIAL OF A PROTEST BY J. W. BATESON COMPANY, INC., DALLAS, TEX., AGAINST THE AWARD OF A CONTRACT TO BLAKE CONSTRUCTION COMPANY, INC., UNDER AN IFB ISSUED BY THE ARMY CORPS OF ENGINEERS, BALTIMORE, MD., FOR CONSTRUCTION OF THE NEW WALTER REED GENERAL HOSPITAL IN WASHINGTON, D. C. UNDER ASPR 16-401.10(C), WHERE THE GOVERNMENT HAS RESERVED THE RIGHT TO AWARD ITEMS SEPARATELY OR IN THE AGGREGATE, EITHER SINGLE OR MULTIPLE AWARDS ARE PERMITTED, DEPENDING UPON WHICH IS MOST ADVANTAGEOUS TO THE GOVERNMENT. AN EXCEPTION TO THIS RULE IS FOUND IN ASPR 2-201(B)(XVI) WHICH PROVIDES THAT SOLICITATIONS STATING THE EXACT BASIS UPON WHICH BIDS WILL BE EVALUATED ALLOW FOR A SINGLE AGGREGATE AWARD TO BE MADE ON THE BASIS OF THAT EVALUATION, SUCH SPECIFIC PROVISION TAKING PRECEDENCE OVER THE GENERAL RULE. ASPR 1-1504(C) PROVIDES THAT SOLICITATIONS CONTAINING OPTION PROVISIONS MUST BE EVALUATED ON THE BASIS OF THE BASIC QUANTITY TO BE AWARDED, PLUS THE OPTION QUANTITY WHERE THE SOLICITATION PROVIDES FOR THE EVALUATION OF OPTIONS. PROTEST IS DENIED ACCORDINGLY.

TO J. W. BATESON COMPANY, INCORPORATED:

REFERENCE IS MADE TO YOUR TELEFAX OF JULY 27, 1972, AND LETTER OF AUGUST 9, 1972, PROTESTING ON BEHALF OF J. W. BATESON COMPANY, INC. AND CENTEX CORPORATION, A JOINT VENTURE, THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS (IFB) DACA31-72-B-0037, ISSUED BY THE UNITED STATES ARMY CORPS OF ENGINEERS, BALTIMORE, MARYLAND.

THE SOLICITATION, FOR CONSTRUCTION OF THE NEW WALTER REED GENERAL HOSPITAL IN WASHINGTON, D. C., CONTAINED TWO SCHEDULES. SCHEDULE I, DESIGNATED BASE BID, WAS FOR CONSTRUCTION OF THE HOSPITAL BUILDING AND FOR CERTAIN ADDITIVE ITEMS. SCHEDULE II, DESIGNATED OPTION, WAS FOR AN UNDERGROUND PARKING STRUCTURE. THE IFB PROVIDED UNDER THE "SPECIAL BID CONDITIONS" THAT THE BIDDER OFFERING THE LOW AGGREGATE AMOUNT ON SCHEDULE I WOULD BE DETERMINED BY ADDING TO THE BASE BID THE BIDS FOR THOSE ADDITIVE ITEMS FOR WHICH FUNDS WERE AVAILABLE PRIOR TO BID OPENING, AND THAT THE LOW BIDDER FOR PURPOSES OF AWARD WOULD BE DETERMINED BY ADDING THE SCHEDULE I AMOUNT AS DETERMINED ABOVE TO THE SCHEDULE II BID PRICE. THE IFB, AS AMENDED, ALSO INCLUDED THE FOLLOWING PROVISIONS UNDER THE HEADING "EVALUATION OF OPTIONS:"

"A. BIDS WILL BE EVALUATED FOR PURPOSES OF AWARD BY ADDING THE TOTAL PRICE FOR THE OPTION (SCHEDULE II) TO THE TOTAL PRICE FOR THE QUANTITIES TO BE AWARDED AT THIS TIME (SCHEDULE I). EVALUATION OF OPTION WILL NOT OBLIGATE THE GOVERNMENT TO EXERCISE THE OPTION.

"C. THE AWARD OF SCHEDULE II (OPTION) FOR THE PARKING STRUCTURE IS DEPENDENT ON THE FUNDS BEING MADE AVAILABLE BY THE CONGRESS. THEREFORE THE GOVERNMENT RESERVES THE RIGHT TO EXERCISE THE OPTION ON OR BEFORE 28 FEB 1974. IN THE EVENT THE GOVERNMENT HAS NOT EXERCISED THE OPTION BY THE DATE SPECIFIED, THE CONTRACTOR WILL NOT BE OBLIGATED TO PERFORM THE WORK INCLUDED IN THE OPTION PORTION OF HIS BID."

BIDS WERE RECEIVED FROM YOUR FIRM AND CENTEX CORPORATION, A JOINT VENTURE (BATESON), FROM BLAKE CONSTRUCTION COMPANY, INC., AND U. S. INDUSTRIES, INC., A JOINT VENTURE (BLAKE), AND FROM GEORGE HYMAN CONSTRUCTION COMPANY AND HUBER, HUNT & NICHOLS, A JOINT VENTURE (HYMAN), AS FOLLOWS:

BATESON HYMAN BLAKE

SCHEDULE I

BASIC $94,970,000 $95,989,000$ 96,839,000

ADDITIVES 5,001,000 5,099,000 5,482,000

99,971,000 101,088,000 102,321,000

SCHEDULE II-OPTION 11,700,000 10,076,000 8,500,000

TOTAL $111,671,000 $111,164,000 $110,821,000

AWARD WAS MADE TO BLAKE IN THE ESTIMATED AMOUNT OF $102,321,000.

YOU ASSERT THAT YOU WERE THE LOW BIDDER ON SCHEDULE I AND THAT AWARD SHOULD HAVE BEEN MADE TO YOU. YOU STATE THE UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) 16-401.2(C)(III)(2)(C) AND PARAGRAPH 10(C) OF STANDARD FORM 22 THE GOVERNMENT IS PERMITTED TO MAKE SEPARATE AWARDS FOR THE WORK SPECIFIED ON EACH SCHEDULE, AND ARGUE THAT THE PROVISIONS OF ASPR 2-201(B)(XL), SPECIFICALLY RESERVING TO THE GOVERNMENT "THE RIGHT TO MAKE AWARD OF ANY OR ALL SCHEDULES OF ANY BID," SHOULD BE READ INTO THE SOLICITATION UNDER THE DOCTRINE ESTABLISHED BY G. L. CHRISTIAN AND ASSOCIATES V. UNITED STATES, 160 CT. CL. 1, 320 F.2D 345 (1963). YOU CLAIM THAT SEPARATE AWARDS TO YOU (FOR SCHEDULE I) AND TO BLAKE (FOR SCHEDULE II) WOULD RESULT IN A SAVINGS OF $2,350,000 AND WOULD THEREFORE BE IN THE BEST INTERESTS OF THE GOVERNMENT. YOU ALSO ASSERT THAT IT IS ILLEGAL TO AWARD A CONTRACT ON THE BASIS OF AN EVALUATION THAT INCLUDES WORK THAT IS NOT TO BE PERFORMED UNDER THE CONTRACT AS INITIALLY AWARDED.

GENERALLY, WHERE THE GOVERNMENT HAS RESERVED THE RIGHT TO AWARD ITEMS SEPARATELY OR IN THE AGGREGATE, AS PROVIDED IN PARAGRAPH 10(C) OF THE IFB AND THE REGULATIONS CITED, EITHER SINGLE OR MULTIPLE AWARDS ARE PERMITTED, DEPENDING UPON WHICH IS MOST ADVANTAGEOUS TO THE GOVERNMENT. 47 COMP. GEN. 233 (1967). HOWEVER, WHEN THE SOLICITATION SPECIFICALLY SETS FORTH THE EXACT BASIS UPON WHICH BIDS WILL BE EVALUATED AND PROVIDES THAT A SINGLE AGGREGATE AWARD WILL BE MADE ON THE BASIS OF THAT EVALUATION, SUCH PROVISION TAKES PRECEDENCE OVER THE MORE GENERAL PROVISION AND IT WOULD NOT BE PROPER FOR AWARD TO BE MADE ON ANY OTHER BASIS. SEE ASPR 2- 201(B)(XVI). ALTHOUGH YOU ARGUE THAT THE INSTANT IFB DID NOT CLEARLY STATE THAT A SINGLE AGGREGATE AWARD WOULD BE MADE, IT IS OUR OPINION THAT THE CLEAR AND ONLY REASONABLE INTERPRETATION OF THE "SPECIAL BID CONDITIONS" AND "EVALUATION OF OPTIONS" CLAUSES IS THAT ONE AWARD WOULD BE MADE TO THE BIDDER WHOSE AGGREGATE PRICE FOR SCHEDULE I AND SCHEDULE II WAS LOW. ALTHOUGH NOT NECESSARY TO OUR DECISION HERE, WE BELIEVE THAT THE "CHRISTIAN DOCTRINE" RELATES TO THE INCLUSION OF CLAUSES IN CONTRACTS REQUIRED BY ASPR TO BE INCLUDED THEREIN AND NOT TO THE INCLUSION OF ASPR CLAUSES IN SOLICITATIONS. SEE 48 COMP. GEN. 171, 178 (1968).

IT SHOULD BE NOTED THAT SOLICITATIONS CONTAINING OPTION PROVISIONS MUST BE EVALUATED ON THE BASIS OF THE BASIC QUANTITY TO BE AWARDED, PLUS THE OPTION QUANTITY WHERE, AS HERE, THE SOLICITATION PROVIDES FOR THE EVALUATION OF OPTIONS. SEE ASPR 1-1504(C). THIS PROCEDURE IS BASED UPON RECOGNITION OF THE FACT THAT IT IS IN THE BEST INTERESTS OF THE GOVERNMENT TO PERMIT EVALUATION OF OPTION PRICES IN MAKING AN AWARD UNDER CERTAIN CIRCUMSTANCES. ACCORDINGLY, ASPR 1-1504(D), WHICH IS MADE APPLICABLE TO CONSTRUCTION CONTRACTS BY ASPR 2.201(B)(XXVII), PROVIDES FOR EVALUATION OF OPTION PRICES WHEN -

"*** IT HAS BEEN DETERMINED AT A LEVEL HIGHER THAN THE CONTRACTING OFFICER THAT:

"(I) THERE IS A KNOWN REQUIREMENT WHICH EXCEEDS THE BASIC QUANTITY TO BE AWARDED, BUT *** (B) DUE TO THE UNAVAILABILITY OF FUNDS, THE OPTION CANNOT BE EXERCISED AT THE TIME OF AWARD OF THE BASIC QUANTITY PROVIDED THAT *** THERE IS REASONABLE CERTAINTY THAT FUNDS WILL BE AVAILABLE THEREAFTER, TO PERMIT EXERCISE OF THE OPTION; AND

"(II) REALISTIC COMPETITION FOR THE OPTION QUANTITY IS IMPRACTICABLE ONCE THE INITIAL CONTRACT IS AWARDED AND HENCE IT IS IN THE BEST INTERESTS OF THE GOVERNMENT TO EVALUATE OPTIONS IN ORDER TO ELIMINATE THE POSSIBILITY OF A 'BUY-IN' ***."

OUR FILE CONTAINS DOCUMENTATION SUPPORTING A DETERMINATION BY THE OFFICE OF THE CHIEF OF ENGINEERS PURSUANT TO ASPR 1-1504(D) THAT IT WAS REASONABLY CERTAIN THAT THE MONEY FOR THE PARKING GARAGE WOULD BE AVAILABLE BY FEBRUARY 28, 1974, AND THAT REALISTIC COMPETITION FOR THE GARAGE FACILITY WOULD BE IMPRACTICABLE BECAUSE OF THE "CRITICALLY CONFINED AREA" INVOLVED AND THE COMMON COMPLETION DATE FOR BOTH THE HOSPITAL AND THE PARKING FACILITY. THEREFORE, IT IS OUR CONCLUSION THAT THE OPTION PRICE WAS PROPERLY EVALUATED IN DETERMINING THE LOW BIDDER.

YOU CITE B-171813, FEBRUARY 19, 1971, PUBLISHED AT 50 COMP. GEN. 583, SUPRA, FOR THE PROPOSITION THAT ANY METHOD OF SELECTING THE LOWEST BIDDER THAT "INCORPORATES MORE OR LESS THAN THE WORK TO BE AWARDED FAILS TO OBTAIN THE FULL COMPETITION REQUIRED BY THE PROCUREMENT STATUTES" AND THAT "THE LOWEST BID MUST BE MEASURED BY THE TOTAL WORK TO BE AWARDED." THAT CASE, THE INVITATION REQUESTED BOTH BASE BIDS AND BIDS ON SEVERAL ADDITIVE ITEMS, AND PROVIDED THAT AWARD WOULD BE BASED ON THE LOWEST BID FOR THE BASIC ITEM ONLY. HOWEVER, THE IFB ALSO STATED THAT THE AWARD MIGHT INCLUDE ANY OR ALL OF THE ADDITIVE ITEMS, DEPENDING UPON THE AVAILABILITY OF FUNDS. IT WAS REPORTED THAT THE PROCURING AGENCY HAD CONTEMPLATED THAT THE AWARD TO BE MADE WOULD INCLUDE ALL THE ADDITIVE ITEMS, AND AT TIME OF AWARD FUNDS WERE AVAILABLE FOR AWARD OF ALL ITEMS. UNDER THOSE CIRCUMSTANCES, WE HELD THAT AWARD SHOULD HAVE BEEN MADE TO THE LOW AGGREGATE BIDDER AND NOT TO A HIGHER BIDDER WHO WAS LOW ONLY ON THE BASIC ITEM. THE HOLDING IN THE ABOVE CASE IS NOT INCONSISTENT WITH THE METHOD OF EVALUATION EMPLOYED IN THE INSTANT CASE AS THE LOW BIDDER WAS DETERMINED UPON THE BASIS OF THE AGGREGATE BID ON BOTH SCHEDULES. ALTHOUGH PERFORMANCE OF THE WORK CALLED FOR UNDER THE OPTION IS CONTINGENT UPON THE AVAILABILITY OF FUNDS, IT WAS PROPERLY DETERMINED AT THE TIME OF AWARD THAT THERE WAS A NEED FOR THE GOVERNMENT TO HAVE THE RIGHT AFFORDED BY THE OPTION. THEREFORE, THE LOWEST BID WAS MEASURED BY THE TOTAL WORK TO BE PERFORMED UNDER BOTH SCHEDULES.

FOR THE FOREGOING REASONS, YOUR PROTEST IS DENIED.