Court Directs State Dept. to Halt $160M Mozambique Embassy Award Over Price
Three losing bidders for a U.S. State Dept. contract to build a $160-million embassy compound in the African nation of Mozambique may get another shot.
A U.S. Court of Federal Claims ruling says the agency must review its selection of Alabama-based Pernix Group, based on price revisions to be made because of improper contact by agency procurement staff.
The Feb. 16 decision by Judge Mary Ellen Coster Williams follows a challenge from competing bidder Caddell Construction, also Alabama-based, filed last year after the department awarded the contract in June to Pernix, despite an opinion from the U.S. Government Accountability Office against that action.
GAO's decision was in response to a bid protest by Caddell that challenged several aspects of the award and procurement, including Pernix's eligibility to bid the project.
The other bidders for the contact were contractors B.L. Harbert International and Framaco International Inc.
Williams says the State Dept. erred in informing Pernix before selection was made that its price was irregular and could cost it the contract win, based on a comparison with the government's price estimate.
The agency did not have similar discussions with other bidders.
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"As such, award was based on a misinformed price, the price competition was skewed, there was no level playing field in what had become a price-based competition, and the procurement process lacked integrity," said Williams. "Given the arbitrary and capricious conduct of this procurement, the Court vacates the award and directs [the department] to correct its erroneous discussion letter, afford Pernix the opportunity to revise its pricing based upon an accurate discussion letter, and make a new award decision."
The ruling does not allow other bidders to revise their prices in the agency's re-evaluation of the submitted bids, since Williams contends any revision would give them "an unfair advantage" due to the fact the Pernix and government cost estimates now are public.
An attorney for Caddell, Alexa Santora of Fox Rothschild LLP, Chicago, says the company has not been notified when the State Dept. will make its new award decision.. "From what we understand, Caddell, Pernix and B.L. Harbert remain in consideration," she says.
A spokeswoman for the department's Office of Building Operations says it "is still in the process of implementing the recent court order" and could not speculate if officials will review all bids and how soon it will reaward the embassy contract.
The court had rejected last October Caddell's separate challenge to Pernix's eligibility to bid embassy construction based on its volume and experience in State Dept. construction, also despite a GAO decision that upheld Caddell.
Pernix last year acquired the building group of contractor BE&K from KBR for $28 million as the former parent sought to shed non-core units to focus on oil and gas, technology and government services. Pernix said the purchase would boost its efforts to win international work.
Santora says it is unclear whether the court's order that the agency re-open discussions and accept revised pricing from only one bidder will change the outcome of the award process. "That is yet to be seen," she says.
