Matter of: B&H Contracting Company, Inc. File: B-254250 Date: November 16, 1993

Matter of: B&H Contracting Company, Inc. File: B-254250 Date: November 16, 1993

PROCUREMENT Sealed Bidding Unbalanced bids Allegation substantiation Evidence sufficiency In the absence of any allegation or evidence that awardee's bid contains overstated prices for specific line items, or that agency is unlikely to exercise options for additional performance periods, there is no basis to conclude that awardee's bid is materially unbalanced.

Attorneys

DECISION

We deny the protest.

On April 21, 1993, the agency issued the solicitation for a fixed-price requirements contract for a base year, with four 1-year options, to provide materials and services, including preparation and clean-up, to perform a variety of services related to the application of protective coatings, including interior and exterior painting and marking of crosswalks, streets and parking lots at Pope Air Force Base in North Carolina. The solicitation provided for evaluation of options and for award to the low aggregate bidder based on the agency's estimates of work involved for each of 34 line items (170 line items over the anticipated 5-year period of performance).

Three firms submitted bids on June 14. The low bidder failed to submit a signed certificate of procurement integrity, and the agency found that
bid nonresponsive. On June 24, B&H filed a protest with the agency,
asserting that the next apparent low bid, that of Callejas & Ross, was
materially unbalanced with respect to 25 line items over the anticipated
5 years of performance. Beyond identifying these 25 line items, the
protester did not allege that any specific price was either understated
or overstated. The agency denied the protest on July 23, and this
protest to our Office followed.

To be rejected as unbalanced, a bid must be shown to be both
mathematically unbalanced and materially unbalanced; to be mathematically
unbalanced, a bid must contain both understated prices for some items and
overstated prices for other items. Allegations of understated pricing
alone, without any indication of overstated pricing, provide no legal
basis for concluding that a bid was mathematically unbalanced. Atlantic
Research Corp., B-247560, June 26, 1992, 92-1 CPD Para 543.

The protester here identifies 24 line items for which the awardee's
prices are lower than the protester's--and thus presumably understated in
the protester's view. Other than repeatedly asserting that the awardee's
bid is unbalanced, the protester identifies no specific line items for
which the awardee's prices allegedly are overstated.[1] Our own review
of the record reveals that the awardee's bid prices are higher than the
protester's for certain line items; however, the protester does not
attempt to explain why these prices should be considered overstated--in
fact, as noted above, B&H does not even identify these line items--and we
see no basis otherwise in the record to so conclude.

Since unbalancing can occur between base and option period prices as well
as between line items, we also have examined the awardee's prices for the
base and option periods. The awardee's bid for the 3-month base period
($717,652.50) is nearly twice as high as the protester's ($381,565), and
is equal to 52 percent of the awardee's bid for the first full option
year. Nevertheless, the record shows the awardee's base period bid to be
in line with the government estimate ($737,000), as the agency expected
base period bids to be higher based on the need to acquire labor and
stock to support subsequent performance.[2] The awardee's bid becomes
low during the second option year; the protester does not allege and the
record does not show any basis for concluding that the agency is not
likely to exercise the options. Our analysis of whether bids are
materially unbalanced between base period and option years hinges upon
whether the agency reasonably anticipates exercise of the option.
Professional Waste Sys., Inc. et al., 67 Comp.Gen. 68 (1987), 87-2 CPD
Para 477. Absent any evidence that the agency does not anticipate
exercise of the options, we have no basis for concluding that the
awardee's bid is materially unbalanced between the base and option years.

The protest is denied.

1. The protester cites one line item for which its price is lower than the awardee's (line item 001AG, parking lot layout during the 3-month base period). For this item, the awardee's price ($.12 per square foot) is closer to the agency's estimate ($.104 per square foot) than the protester's price ($.07 per square foot). The difference in price amounts to $2,500 for the estimated requirement of 50,000 square feet; by contrast, the protester's prices are cumulatively higher by approximately $750,000 for the remaining 24 line items identified in the protest. The effect of the pricing for line item 001AG thus is clearly de minimis.

2. The agency noted that B&H has labor and stock in place which may account for its lower base period bid.