B-148162, FEBRUARY 20, 1962, 41 COMP. GEN. 550

B-148162: Feb 20, 1962

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO ACKNOWLEDGE AN ADDENDUM WHICH HAD THE EFFECT OF REDUCING THE COST OF THE WORK BY A TRIVIAL AMOUNT ($15) MAY NOT BE REGARDED AS PREJUDICIAL TO THE NEXT LOW BIDDER WHOSE BID PRICE WAS MORE THAN A THOUSAND DOLLARS HIGHER. 1962: REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 9. YOU STATE THAT THE INVITATION FOR BIDS WAS ISSUED ON STANDARD FORM 19 ( JANUARY 1959 EDITION). WAS ISSUED CONTAINING THE FOLLOWING NOTICE: YOUR ATTENTION IS CALLED TO THE FACT THAT. IT IS NECESSARY THAT YOU ACKNOWLEDGE RECEIPT OF ALL ADDENDA TO THE PLANS AND SPECIFICATIONS IN THE SPACE PROVIDED BELOW AND RETURN THIS NOTICE WITH YOUR BID. WAS ISSUED AND DISTRIBUTED TO PROSPECTIVE BIDDERS. NO NOTICE SUCH AS THAT QUOTED ABOVE WAS INCLUDED IN ADDENDUM NO. 2 BECAUSE.

B-148162, FEBRUARY 20, 1962, 41 COMP. GEN. 550

CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - ADDENDA ACKNOWLEDGMENT THE FAILURE OF A LOW BIDDER, INCIDENT TO A TOTAL PROCUREMENT OF SEVERAL THOUSAND DOLLARS, TO ACKNOWLEDGE AN ADDENDUM WHICH HAD THE EFFECT OF REDUCING THE COST OF THE WORK BY A TRIVIAL AMOUNT ($15) MAY NOT BE REGARDED AS PREJUDICIAL TO THE NEXT LOW BIDDER WHOSE BID PRICE WAS MORE THAN A THOUSAND DOLLARS HIGHER, OR TO ANY OF THE OTHER BIDDERS AND, THEREFORE, THE FAILURE TO ACKNOWLEDGE THE ADDENDUM MAY BE REGARDED AS AN INFORMALITY WHICH MAY BE WAIVED.

TO CHARLES W. REILLY, ATOMIC ENERGY COMMISSION, FEBRUARY 20, 1962:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 9, 1962, REQUESTING A DECISION AS TO THE PROPRIETY OF MAKING AN AWARD OF A CONTRACT TO THE LOW BIDDER FOR THE PERFORMANCE OF WORK REQUIRED FOR MODIFICATIONS TO LIGHTING, BUILDING NO. 4 AT THE KNOLLS ATOMIC POWER LABORATORY, WEST MILTON, NEW YORK.

YOU STATE THAT THE INVITATION FOR BIDS WAS ISSUED ON STANDARD FORM 19 ( JANUARY 1959 EDITION), AND CALLED FOR BIDS TO BE OPENED ON FEBRUARY 6, 1962. ON JANUARY 25, 1962, AN AMENDMENT TO THE SPECIFICATIONS DESIGNATED AS ADDENDUM NO. 1 AND DATED JANUARY 23, 1962, WAS ISSUED CONTAINING THE FOLLOWING NOTICE:

YOUR ATTENTION IS CALLED TO THE FACT THAT, IN ORDER FOR YOUR BID TOBE ACCEPTABLE, IT IS NECESSARY THAT YOU ACKNOWLEDGE RECEIPT OF ALL ADDENDA TO THE PLANS AND SPECIFICATIONS IN THE SPACE PROVIDED BELOW AND RETURN THIS NOTICE WITH YOUR BID.

ON JANUARY 30, 1962, AN ADDITIONAL AMENDMENT TO THE SPECIFICATIONS, DESIGNATED AS ADDENDUM NO. 2 AND DATED JANUARY 29, 1962, WAS ISSUED AND DISTRIBUTED TO PROSPECTIVE BIDDERS. HOWEVER, NO NOTICE SUCH AS THAT QUOTED ABOVE WAS INCLUDED IN ADDENDUM NO. 2 BECAUSE, AS YOU STATE, THE WORDING OF THAT NOTICE WAS CONSIDERED AS SUFFICIENTLY BROAD TO COVER ALL ADDENDA WHICH MIGHT BE ISSUED.

FOUR BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE LOWEST BID, IN THE AMOUNT OF $5,535 ACCOMPANIED BY A BID BOND IN PROPER FORM, WAS SUBMITTED BY L. S. BLACKWOOD, SR., SARATOGA SPRINGS, NEW YORK. THE NEXT LOWEST BID, IN THE AMOUNT OF $6,650 WAS SUBMITTED BY THE FIRM OF M. GOLD AND SON, INC. THE AMOUNTS OF THE TWO HIGHEST BIDS WERE $7,440 AND $12,684.

THE CIRCUMSTANCES GIVING RISE TO YOUR REQUEST FOR OUR DECISION ARE OUTLINED BY YOU AS FOLLOWS:

IT WILL BE NOTED THAT STANDARD FORM 19, WHICH WAS USED IN THIS PROCUREMENT ACTION, DOES NOT CONTAIN ANY PROVISION FOR ACKNOWLEDGMENT OF RECEIPT OF CHANGES IN THE SPECIFICATIONS. WITH HIS BID, L. S. BLACKWOOD, SR., RETURNED THE NOTICE REFERRED TO ABOVE, ON WHICH HE ACKNOWLEDGED RECEIPT OF ADDENDUM NO. 1 AND THE REVISED DRAWING WHICH ACCOMPANIED IT, BUT HE DID NOT ACKNOWLEDGE RECEIPT OF ADDENDUM NO. 2.

ADDENDUM NO. 2 MODIFIED ONLY ONE PARAGRAPH OF THE SPECIFICATIONS, WHICH WAS PARAGRAPH E OF SECTION TP-06. IN THE ORIGINAL SPECIFICATIONS, THAT PARAGRAPH READS AS FOLLOWS:

"E. LIGHTING FIXTURES ARE TO BE AS INDICATED ON THE DRAWING OR

APPROVED EQUAL.' AS MODIFIED BY ADDENDUM NO. 2 THAT PARAGRAPH READS AS FOLLOWS:

"E. LIGHTING FIXTURES:

"1. TYPE "A" FIXTURES ARE TO BE CROUSE-HINES NO. VHD-2289 OR

EQUAL WITH 150 W INCANDESCENT LAMP.

"2. TYPE "B" FIXTURES ARE TO BE CROUSE-HINES NO. VHA-289 OR

EQUAL WITH 150 W INCANDESCENT LAMP AND CROUSE-HINES HALF SHADE

NO. SH2 WHERE SHOWN ON THE DRAWINGS.

"3. TYPE "C" FIXTURES ARE TO BE BENJAMIN NO. 7642 OR EQUAL WITH

150 W INCANDESCENT FIXTURE.

"4. TYPE "D" FIXTURE SHALL BE CURTIS NO. 6007-R OR EQUAL 2-40 W

FLUORESCENT LAMPS.

"5. NEW FLOODLIGHTS SHALL BE WHEELER-1FULLERTON NO. DP16E OR

EQUAL WITH 750 W INCANDESCENT LAMP.

"6. LAMP FOR RELOCATED FLOODLIGHTS SHALL BE SUPPLIED TO THE

CONTRACTOR BY THE CONTRACTING OFFICER.'"

EXPLANATION OF THE FOREGOING CHANGE IN PARAGRAPH E APPEARS TO BE DESIRABLE. SUB-PARAGRAPHS 1, 2, 3 AND 4 CONTAIN INFORMATION WHICH WAS ALREADY IN THE POSSESSION OF PROSPECTIVE BIDDERS, BECAUSE IT IS SHOWN ON THE REVISED DRAWING WHICH ACCOMPANIED ADDENDUM NO. 1. SUB-PARAGRAPH NO. 5 CLARIFIED THE REQUIREMENTS OF THE SPECIFICATIONS BY PERMITTING THE INSTALLATION OF A 750 W INCANDESCENT LAMP IN FIXTURES WHICH COULD ACCOMMODATE EITHER 750 W LAMPS OR 1000 W LAMPS. IF AND TO THE EXTENT THAT SUB-PARAGRAPH 5 AFFECTED THE COST OF THE WORK, THE EFFECT THEREOF WAS A COST REDUCTION. SUB-PARAGRAPH 6 REDUCED THE COST OF THE WORK BY PROVIDING THAT THE GOVERNMENT WOULD SUPPLY THE LAMPS REQUIRED FOR RELOCATED FLOODLIGHTS.

IT IS ESTIMATED BY THIS OFFICE THAT THE EFFECT OF ADDENDUM NO. 2 ON THE COST OF THE WORK WAS A REDUCTION THEREOF IN THE AMOUNT OF $15.00.

IT IS THE VIEW OF THIS OFFICE THAT AWARD OF THE CONTRACT IN THIS CASE SHOULD BE MADE TO THE LOW BIDDER, L. S. BLACKWOOD, SR., AND THAT THE RIGHTS OF OTHER BIDDERS WOULD NOT BE PREJUDICED THEREBY, IN VIEW OF THE NATURE AND EFFECT OF THE SPECIFICATION ADDENDUM WHICH THE LOW BIDDER FAILED TO ACKNOWLEDGE IN WRITING. HOWEVER, THIS OFFICE IS MINDFUL OF THE PROVISIONS OF SECTION 1-2.405 (D) (2) OF THE FEDERAL PROCUREMENT REGULATIONS; YOUR DECISION NO. B-135641 DATED MAY 22, 1958 (37 COMP. GEN. 785); AND YOUR DECISION NO. B-146537 DATED AUGUST 17, 1961. THE CITED REGULATIONS AND DECISIONS CONTAIN LANGUAGE WHICH WOULD APPEAR TO MAKE IT NECESSARY FOR THIS OFFICE TO REJECT AND DISREGARD THE BID OF L. S. BLACKWOOD, SR., BECAUSE HE DID NOT ACKNOWLEDGE IN WRITING THE RECEIPT OF ADDENDUM NO. 2, REGARDLESS OF THE FACT THAT ALTHOUGH THE ADDENDUM AFFECTED THE NATURE OF THE WORK TO BE PERFORMED AND THE COST THEREOF, IT CAUSED A DECREASE IN SUCH COST. IT SEEMS CLEAR, IN THIS CASE, THAT THE POSITION OF L. S. BLACKWOOD, SR., AS LOW BIDDER WAS NOT AFFECTED, AND COULD NOT HAVE BEEN AFFECTED, BY THE RECEIPT OR NONRECEIPT OF ADDENDUM NO. 2. IT IS CERTAINLY CLEAR THAT REJECTION OF HIS BID WOULD RESULT IN AN INCREASED COST TO THE GOVERNMENT IN THE AMOUNT OF $1,115.00.

THE BROAD LANGUAGE OF THE REGULATIONS AND DECISIONS CITED ABOVE APPEARS TO MAKE THEM APPLICABLE TO THIS CASE; BUT THE SPECIAL CIRCUMSTANCES WHICH APPEAR IN THIS INSTANCE SEEM TO MAKE THIS CASE SUFFICIENTLY DIFFERENT FROM THOSE INVOLVED IN YOUR EARLIER DECISIONS TO JUSTIFY YOUR CONSIDERATION OF THIS PROPOSED AWARD.

THE QUESTION WITH REGARD TO THE EFFECT OF A BIDDER'S FAILURE TO ACKNOWLEDGE AN ADDENDUM HAS BEEN BEFORE OUR OFFICE ON A NUMBER OF OCCASIONS. AS WAS STATED IN 37 COMP. GEN. 785 THE GENERAL RULE ON THE EFFECT OF FAILURE TO ACKNOWLEDGE AN ADDENDUM IS THAT IF AN AMENDMENT TO AN INVITATION AFFECTS THE PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT, FAILURE OF THE BIDDER TO ACKNOWLEDGE THAT AMENDMENT IN THE MANNER REQUIRED BY THE INVITATION OR AMENDMENT CANNOT BE WAIVED. THIS GENERAL RULE IS PREDICATED UPON THE PRINCIPLE THAT THE ACCEPTANCE OF A BID WHICH DISREGARDS A MATERIAL ASPECT OF AN INVITATION, AS AMENDED, WOULD BE PREJUDICIAL TO THE OTHER BIDDERS. B-138392, FEBRUARY 25, 1959. IT IS ALSO SAID THAT THE FAILURE TO ACKNOWLEDGE GIVES THE FAILING BIDDER AN OPTION TO DECIDED AFTER BID OPENING TO BECOME ELIGIBLE FOR THE AWARD BY COMING FORTH WITH EVIDENCE OUTSIDE THE BID ITSELF THAT MATERIAL ADDENDA HAD BEEN CONSIDERED, OR TO AVOID AWARD BY REMAINING SILENT. B-141299, DECEMBER 14, 1959.

WHILE THE GENERAL RULE SET FORTH IN 37 COMP. GEN. 758 IS BASED ON SOUND POLICY AND FURTHERS THE SPIRIT AND PURPOSE OF LAW GOVERNING PUBLIC CONTRACT PROCUREMENTS PURSUANT TO FORMAL ADVERTISING, WE DO NOT BELIEVE THAT IT HAS APPLICATION TO THE CIRCUMSTANCES PRESENT IN THE CASE BEFORE US. THE GENERAL RULE HAS NOT BEEN APPLIED INDISCRIMINATELY BY THIS OFFICE TO PREVENT WAIVER IN ALL CASES INVOLVING FAILURE TO ACKNOWLEDGE ADDENDA. THUS, WAIVER HAS BEEN PERMITTED WHERE THE MODIFICATION COULD HAVE AFFECTED THE COST OF THE WORK ONLY TO A NEGLIGIBLE DEGREE, 34 COMP. GEN. 581; OR WHERE THE ADDITIONAL COST WAS TOO TRIVIAL AS A PRACTICAL MATTER WHEN COMPARED WITH THE TOTAL COST OF THE WORK, B-141383, JANUARY 14, 1960. B-144185, JANUARY 25, 1961, THE ADDITIONAL COST INVOLVED WAS SAID TO BE NEGLIGIBLE AND WAIVER WAS PROPER; AND IN B-144784, JUNE 21, 1961, THE FACTS DID NOT JUSTIFY A CONCLUSION "THAT THE ADDENDA PROVISIONS WERE OF A SUBSTANTIAL NATURE WITH REGARD TO THE OVERALL COST OF THE WORK OR THAT THE FAILURE OF THE LOW BIDDER TO EXECUTE THE ADDENDUM PREJUDICED OTHER BIDDERS.'

YOU HAVE INDICATED THAT SUBPARAGRAPHS 1, 2, 3 AND 4 OF ADDENDUM NO. 2 MERELY REITERATE THE REQUIREMENTS SET UP IN PARAGRAPH E OF SECTION TP 06 OF THE ORIGINAL SPECIFICATIONS AND THAT SUBPARAGRAPHS 5 AND 6 OF THE ADDENDUM AFFECTED THE COST OF THE WORK TO THE EXTENT OF A $15 REDUCTION. ALSO, AS YOU POINT OUT, THE SECOND LOW BIDDER'S PRICE WAS $1,115 HIGHER THAN THE LOW BID. FURTHERMORE, WITH RESPECT TO THE TOTAL COST OF THE PROCUREMENT ($5,535), IT CANNOT BE CONCLUDED THAT A $15 COST REDUCTION IS MORE THAN NEGLIGIBLE OR TRIVIAL. UNDER THESE CIRCUMSTANCES IT IS CLEAR THAT NO PREJUDICE COULD RESULT TO THE OTHER BIDDERS BY THE LOW BIDDER'S FAILURE TO ACKNOWLEDGE THE ADDENDUM. INDEED, IF WE ASSUME THAT THE LOW BIDDER'S FAILURE TO ACKNOWLEDGE THE ADDENDUM WAS DUE TO IGNORANCE OF ITS EXISTENCE, THEN HIS BID PRICE WOULD NOT REFLECT THE LESSENED REQUIREMENTS OF THE SPECIFICATIONS AND, THEREFORE, HIS FAILURE TO ACKNOWLEDGE WOULD ONLY BE PREJUDICIAL TO HIS COMPETITIVE POSITION AND EVEN POSSIBLY BENEFICIAL TO THE POSITION OF THE OTHER BIDDERS.

FOR THE REASONS STATED, WE FIND NO BASIS FOR OBJECTING TO WAIVING, AS AN INFORMALITY, THE LOW BIDDER'S FAILURE TO ACKNOWLEDGE ADDENDUM NO. 2.