B-311196, Marshall Company, Ltd., April 23, 2008
Decision
Matter of: Marshall Company, Ltd.
Johnathan
M. Bailey, Esq., and Theodore M. Bailey, Esq., Bailey & Bailey, PC, for the
protester.
Carlton A. Arnold, Esq., Army Corps of Engineers, for the agency.
Sharon
L. Larkin, Esq., and James A. Spangenberg, Esq., Office of the General Counsel,
GAO, participated in the preparation of the decision.
DIGEST
Agency’s evaluation of option pricing is unobjectionable
where the record does not evidence “reasonable certainty” that
funding is not available or that options will not be exercised.
DECISION
Marshall Company, Ltd.,
protests the award of a construction contract to Anthony & Gordon
Construction Co. (A&G) under request for proposals (RFP) No.
W912QR-06-R-0058, issued by the Army Corps of Engineers.
The RFP, set aside for historically underutilized business
zone (HUBZone) small businesses, provided for award of a fixed-price contract
to design and construct a 120,000 square-foot controlled humidity warehouse
with a 1,200 square‑foot administrative area in
The RFP provided for a base period to design and construct the facilities, perform sitework, and install telephone and other “OMAR-funded” items[1]; with six separate options for various paving upgrades and a building enlargement. RFP at 5-6. The RFP contained the standard clause “52.217-5 Evaluation of Options (Jul 1990),” which stated:
Except when it is determined in accordance with [Federal Acquisition Regulation (FAR) sect.] 17.206(b) not to be in the Government’s best interests, the Government will evaluate offers for award purposes by adding the total price for all options to the total price for the basic requirement. Evaluation of options will not obligate the Government to exercise the option(s).
RFP at 13-14. The RFP further required that offerors’ option pricing “be good for 90 days after award of the contract.” RFP at 7.
Marshall and A&G submitted proposals for
evaluation. The source selection
authority (SSA) rated both proposals “good” under the experience, past
performance, and technical proposal information
factors, and found there to be “no qualitative difference” between
proposals under these factors. A&G’s
proposal, however, was found to be superior to
Where, as here, the solicitation includes a provision
requiring the evaluation of options, such options must be evaluated “[e]xcept
when it is determined in accordance with FAR [sect.] 17.206(b) not to be in the
Government’s best interests” to exercise the options.[2]
FAR sect. 52.217-5. FAR sect. 17.206(b) provides that it may not be
in the government’s best interests to evaluate options “when there is a
reasonable certainty that funds will be unavailable to permit exercise of the
option.”
Here, the contracting officer states that she fully
intended to award the options “as future funds become available” and that there was a “reasonable
likelihood” that the options would be exercised, as evidenced by a memorandum
she prepared three months before award.
Agency Report, Tab 4, Contracting Officer’s Determination for Use of
Option, at 1; Tab 9, Contracting Officer’s Affidavit, para. 8. In support of these statements, the
contracting officer explains that an additional $2 million has already been
made available for options on this project, and she has provided documentation
showing “remaining funding authorities and the threshold limits” available for
this project. Agency Report, Tab 9,
Contracting Officer’s Affidavit, para. 7; Tab 11, Request Award Construction Funds,
at 1.
The protest is denied.
Gary L. Kepplinger
General Counsel
[1]
“OMAR” refers to Operations and Maintenance, Army Reserve.
[2]
Although FAR Subpart 17.2 by its terms does not apply to construction
contracts, we conclude that the agency is bound to follow the procedures of
this subpart where, as here, the agency has incorporated into the solicitation FAR sect.
52.217-5 providing for the evaluation of options. Contractors NW, Inc., B-293050,