B-160257, DEC. 15, 1966

B-160257: Dec 15, 1966

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TO GLASGOW SAND AND CONSTRUCTION CO.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 17. THE LABOR STANDARDS PROVISIONS IN THE IFB STIPULATED THAT MINIMUM WAGE RATES CONTAINED IN THE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR WERE REQUIRED TO BE PAID UNDER THE CONTRACT. IT WAS FURTHER PROVIDED THAT THE APPLICABLE RATES WOULD BE FURNISHED BY AN AMENDMENT TO THE IFB PRIOR TO BID OPENING DATE. THE IFB ALSO CONTAINED A PROVISION WHICH STATED THAT: "BIDDERS ARE REQUIRED TO ACKNOWLEDGE RECEIPT OF ALL AMENDMENTS TO THIS INVITATION ON THE BID FORM (STANDARD FORM 21) IN THE SPACE PROVIDED. WHICH WERE TO BE INCLUDED AS A PART OF THE SPECIFICATIONS. SIX BIDS WERE RECEIVED AND WERE OPENED ON AUGUST 18.

B-160257, DEC. 15, 1966

TO GLASGOW SAND AND CONSTRUCTION CO.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 17, 1966, AND CONFIRMING LETTER DATED OCTOBER 19, 1966, WITH ENCLOSURES, PROTESTING AGAINST AWARD TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS (IFB) NO. DACW43-67-B-0001.

THE INVITATION REQUESTED BIDS FOR THE REPAIR OF PILE DIKES, STONE DIKES, AND BANK REVETMENT AT VARIOUS LOCATIONS ALONG THE MISSISSIPPI RIVER.

THE LABOR STANDARDS PROVISIONS IN THE IFB STIPULATED THAT MINIMUM WAGE RATES CONTAINED IN THE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR WERE REQUIRED TO BE PAID UNDER THE CONTRACT. IT WAS FURTHER PROVIDED THAT THE APPLICABLE RATES WOULD BE FURNISHED BY AN AMENDMENT TO THE IFB PRIOR TO BID OPENING DATE.

THE IFB ALSO CONTAINED A PROVISION WHICH STATED THAT:

"BIDDERS ARE REQUIRED TO ACKNOWLEDGE RECEIPT OF ALL AMENDMENTS TO THIS INVITATION ON THE BID FORM (STANDARD FORM 21) IN THE SPACE PROVIDED, OR BY SEPARATE LETTER OR TELEGRAM PRIOR TO OPENING OF BIDS. FAILURE TO ACKNOWLEDGE ALL AMENDMENTS MAY CAUSE REJECTION OF THE BID.'

ON AUGUST 1, THE CORPS OF ENGINEERS ISSUED AMENDMENT NO. 001 TO THE INVITATION WHICH CONTAINED THE WAGE RATES APPLICABLE TO THE PROJECT, IN ACCORDANCE WITH THE DECISION OF THE SECRETARY OF LABOR NO. AE-19, 283, DATED JULY 11, AND WHICH WERE TO BE INCLUDED AS A PART OF THE SPECIFICATIONS. THIS AMENDMENT CARRIED A NOTATION THAT "FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE ISSUING OFFICE PRIOR TO * * * OPENING OF BIDS MAY RESULT IN THE REJECTION OF YOUR BID.'

SIX BIDS WERE RECEIVED AND WERE OPENED ON AUGUST 18. YOUR BID OF $419,780 WAS LOW AND THE NEXT LOW BID WAS IN THE AMOUNT OF $441,800. HOWEVER, YOUR BID WAS DETERMINED TO BE NONRESPONSIVE SINCE YOU HAD NOT ACKNOWLEDGED RECEIPT OF THE WAGE RATE AMENDMENT AND AWARD WAS SUBSEQUENTLY MADE TO THE NEXT LOW BIDDER.

YOUR PROTEST IS MADE ON SEVERAL GROUNDS WHICH RELATE PRINCIPALLY TO THE PROPRIETY OF ARMY'S ACTIONS IN REJECTING YOUR BID FOR YOUR FAILURE TO ACKNOWLEDGE THE WAGE RATE AMENDMENT.

FIRST, IT IS THE POSITION OF YOUR FIRM THAT YOUR FAILURE TO ACKNOWLEDGE THE AMENDMENT IS ONLY A MINOR DEFICIENCY. YOU STATE THAT THE LIST OF WAGES IN AMENDMENT 001 WAS NOT IMPORTANT FOR THE COMPUTATION OF YOUR BID SINCE YOU WERE ALREADY AWARE OF THE PREVAILING WAGE RATES WHICH ARE FURNISHED TO YOU BY LOCAL UNIONS, AND YOU HAD OTHERWISE BECOME AWARE OF THEM WHILE PERFORMING ANOTHER CURRENT CONTRACT IN THE SAME AREA. FURTHERMORE, YOU CONTEND THAT IT WOULD BE IMPOSSIBLE TO FIGURE A JOB OF THIS SORT WITHOUT HAVING A KNOWLEDGE OF THE PREVAILING WAGE RATES. THE PROVISION IN ASPR 2-405 AUTHORIZING THE CONTRACTING OFFICERS TO CURE MINOR IRREGULARITIES IN BIDS IS ALSO CITED IN SUPPORT OF YOUR POSITION. FINALLY, YOU ALLEGE THAT OUR DECISION IN 40 COMP. GEN. 48, WHEREIN WE PERMITTED THE PROCUREMENT AGENCY TO WAIVE THE BIDDER'S FAILURE TO ACKNOWLEDGE A WAGE RATE ADDENDUM TO THE IFB IS APPLICABLE TO THE PRESENT CASE.

IN OUR DECISION B-157832, NOVEMBER 9, 1965, THERE EXISTED A SITUATION SIMILAR IN ALL MATERIAL RESPECTS TO THAT PRESENT IN THE INSTANT CASE AND WE BELIEVE THE RULES STATED THEREIN ARE APPLICABLE TO THE SITUATION AT HAND. WE STATED THEREIN:

"TURNING NOW TO THE EFFECT OF YOUR FAILURE TO ACKNOWLEDGE THE AMENDMENT, IT IS THE GENERAL RULE THAT IF AN ADDENDUM TO AN INVITATION AFFECT THE PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT, THE FAILURE OF THE BIDDER TO ACKNOWLEDGE ITS RECEIPT IN THE MANNER REQUIRED BY THE INVITATION RENDERS THE BID NONRESPONSIVE AND CANNOT BE WAIVED. 37 COMP. GEN. 785. THE BASIS FOR SUCH RULE IS THAT GENERALLY THE BIDDER WOULD HAVE AN OPTION TO DECIDE AFTER BID OPENING TO BECOME ELIGIBLE FOR AWARD BY FURNISHING EXTRANEOUS EVIDENCE THAT THE ADDENDUM HAD BEEN CONSIDERED OR TO AVOID AWARD BY REMAINING SILENT. 41 COMP. GEN. 550 AND DECISIONS THEREIN CITED.

"THE PROCUREMENT REGULATION WHICH GOVERNS WAIVER OF MINOR INFORMALITIES OR IRREGULARITIES IN BIDS SUBMITTED UNDER GSA INVITATIONS TO BID IS FEDERAL PROCUREMENT REGULATION 1-2.405, WHICH READS, IN PART, AS FOLLOWS:

"A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER OF FORM AND NOT OF SUBSTANCE OR PERTAINS TO SOME IMMATERIAL OR INCONSEQUENTIAL DEFECT OR VARIATION OF A BID FROM THE EXACT REQUIREMENT OF THE INVITATION FOR BIDS, THE CORRECTION OR WAIVER OF WHICH WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS. THE DEFECT OR VARIATION IN THE BID IS IMMATERIAL AND INCONSEQUENTIAL WHEN ITS SIGNIFICANCE AS TO PRICE, QUANTITY, QUALITY, OR DELIVERY IS TRIVIAL OR NEGLIGIBLE WHEN CONTRASTED WITH THE TOTAL COST OR SCOPE OF THE SUPPLIES OR SERVICES BEING PROCURED. THE CONTRACTING OFFICER SHALL EITHER GIVE THE BIDDER AN OPPORTUNITY TO CURE ANY DEFICIENCY RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY IN A BID OR WAIVE SUCH DEFICIENCY, WHICHEVER IS TO THE ADVANTAGE OF THE GOVERNMENT. EXAMPLES OF MINOR INFORMALITIES OR IRREGULARITIES INCLUDE:

"/D) FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT TO AN INVITATION FOR BIDS BUT ONLY IF:

"/1) THE BID RECEIVED CLEARLY INDICATES THAT THE BIDDER RECEIVED THE AMENDMENT, SUCH AS WHERE THE AMENDMENT ADDED ANOTHER ITEM TO THE INVITATION FOR BIDS AND THE BIDDER SUBMITTED A BID HEREON; OR

"/2) THE AMENDMENT INVOLVES ONLY A MATTER OF FORM OR IS ONE WHICH HAS EITHER NO EFFECT ON MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, QUANTITY, QUALITY, OR DELIVERY OF THE ITEM BID UPON.'

"SINCE THE WAGE RATES PAYABLE UNDER A CONTRACT DIRECTLY AFFECT THE CONTRACT PRICE, THERE CAN BE NO QUESTION THAT THE IFB PROVISION REQUIRING THE PAYMENT OF MINIMUM WAGES TO BE PRESCRIBED BY THE SECRETARY OF LABOR WAS A MATERIAL REQUIREMENT OF THE IFB AS AMENDED. AS STATED PREVIOUSLY, THE REQUIREMENTS OF THE DAVIS-BACON ACT WERE MET WHEN THE AMENDMENT FURNISHING THE MINIMUM WAGE SCHEDULE WAS ISSUED, THE PURPOSE OF THE ACT BEING TO MAKE DEFINITE AND CERTAIN AT THE TIME OF THE CONTRACT AWARD THE CONTRACT PRICE AND THE MINIMUM WAGES TO BE PAID THEREUNDER. 17 COMP. GEN. 471, 473. IN SUCH CIRCUMSTANCES, IT IS OUR VIEW THAT A BIDDER WHO FAILED TO INDICATE BY ACKNOWLEDGMENT OF THE AMENDMENT OR OTHERWISE THAT HE HAD CONSIDERED THE WAGE SCHEDULE COULD NOT, WITHOUT HIS CONSENT, BE REQUIRED TO PAY WAGE RATES WHICH WERE PRESCRIBED THEREIN BUT WHICH WERE NOT SPECIFIED IN THE ORIGINAL IFB, NOTWITHSTANDING THAT HE MIGHT ALREADY BE PAYING THE SAME OR HIGHER WAGE RATES TO HIS EMPLOYEES UNDER AGREEMENTS WITH LABOR UNIONS OR OTHER ARRANGEMENTS. ACCORDINGLY, IN OUR OPINION, THE DEVIATION WAS MATERIAL AND NOT SUBJECT TO WAIVER UNDER THE PROCUREMENT REGULATION. B-138242, JANUARY 2, 1959. FURTHERMORE, TO AFFORD YOU AN OPPORTUNITY AFTER BID OPENING TO BECOME ELIGIBLE FOR AWARD BY AGREEING TO ABIDE BY THE WAGE SCHEDULE WOULD BE UNFAIR TO THE OTHER BIDDERS WHOSE BIDS CONFORMED TO THE REQUIREMENTS OF THE AMENDED IFB AND WOULD BE CONTRARY TO THE PURPOSE OF THE PUBLIC PROCUREMENT STATUTES. B-149315, AUGUST 28, 1962; B-146354, NOVEMBER 27, 1961.'

OUR DECISION IN 40 COMP. GEN. 48, WHICH YOU CONTEND IS APPLICABLE IN THIS CASE, INVOLVED AN ADDENDUM WHICH CONTAINED WAGE RATES AND WHICH WAS PHYSICALLY ATTACHED TO THE SPECIFICATIONS AND DELIVERED TO THE BIDDER TOGETHER WITH THE CONTRACT AND SPECIFICATIONS. UNDER THOSE CIRCUMSTANCES OUR OFFICE HELD THAT THE BIDDER COULD LEGALLY BE REQUIRED TO PAY WAGES AT THE MINIMUM RATES SPECIFIED IN THE ADDENDUM REGARDLESS OF ITS FAILURE TO ACKNOWLEDGE THE ADDENDUM AND, CONSEQUENTLY, SUCH FAILURE WAS WAIVED. THAT CONNECTION, IT SHOULD BE NOTED THAT THE CONTROLLING CONSIDERATION IN CASES OF THIS TYPE IS WHETHER, UNDER THE CIRCUMSTANCES PRESENTED, IT CAN BE CONCLUDED THAT THE BIDDER HAS, AT THE TIME OF BID OPENING, LEGALLY BOUND ITSELF TO THE TERMS AND CONDITIONS SET FORTH IN THE ADDENDUM. IT IS NOT ENOUGH THAT THE BIDDER MAY BE AWARE OF THE ADDENDUM. THE QUESTION, RATHER, IS WHETHER THE BIDDER HAS MANIFESTED HIS ASSENT TO THE TERMS OF THE ADDENDUM PRIOR TO BID OPENING OR, UNDER THE CIRCUMSTANCES, CAN LEGALLY BE HELD BOUND TO THE TERMS IN THE ADDENDUM ON THE BASIS OF HIS BID AS SUBMITTED. SINCE THE ADDENDUM INVOLVED IN 40 COMP. GEN. 48 WAS STAPLED TO THE BIDDING DOCUMENTS PRIOR TO ISSUANCE OF THE IFB, WE CONCLUDED, IN EFFECT, THAT THE BIDDER MUST HAVE HAD ACTUAL KNOWLEDGE OF THE ADDENDUM AND THAT BY SUBMITTING A BID ON THE BASIS OF THE BIDDING DOCUMENTS WHICH INCLUDED THE ADDENDUM HE HAD, IN LEGAL CONTEMPLATION, AGREED TO PAY THE MINIMUM WAGES SET FORTH IN THE ADDENDUM. IN OTHER WORDS, UNDER THE CIRCUMSTANCES PRESENTED, THE BIDDER HAD MANIFESTED HIS ASSENT TO THE TERMS OF THE ADDENDUM PRIOR TO BID OPENING. THE SITUATION IS QUITE DIFFERENT IN THE INSTANT CASE SINCE THE WAGE AMENDMENT WAS SEPARATELY ISSUED AT A LATER DATE, AND YOU FAILED TO MANIFEST ANY ASSENT TO BE BOUND THEREBY. THEREFORE, THE DECISION IN 40 COMP. GEN. 48 IS NOT CONSIDERED APPLICABLE TO THE FACTS OF THE INSTANT CASE.

IN REGARD TO YOUR CONTENTION THAT THE LANGUAGE CONTAINED IN THE IFB AND AMENDMENT NO. 001 CONCERNING THE CONSEQUENCES OF FAILURE TO ACKNOWLEDGE AN AMENDMENT (I.E.'MAY RESULT IN REJECTION OF YOUR BID"), WAS MERELY PERMISSIVE AND NOT MANDATORY, IT SHOULD BE NOTED THAT SUCH LANGUAGE IS A CORRECT DESCRIPTION OF THE LAW PERTAINING THERETO SINCE NOT ALL FAILURES TO ACKNOWLEDGE AN AMENDMENT WILL RESULT IN REJECTION OF THE BID. IF THE FAILURE INVOLVES AN AMENDMENT WHICH MAY AFFECT PRICE, QUANTITY, QUALITY OR DELIVERY, THE BID MUST BE REJECTED; IF IT DOES NOT, THE FAILURE MAY BE WAIVE AND THE BID ACCEPTED. THE CONTRACTING OFFICER HAS NO DISCRETION IN SUCH MATTERS AND THE PERMISSIVE LANGUAGE REFERRED TO DOES NOT CONFER SUCH AUTHORITY. SINCE THE AMENDMENT IN THIS CASE CLEARLY COULD AFFECT THE PRICE, YOUR BID WAS PROPERLY REJECTED.

WITH REGARD TO YOUR CONTENTION THAT AWARD TO THE HIGHER BIDDER WAS NOT IN THE GOVERNMENT'S BEST INTEREST AND IN VIOLATION OF ASPR 2-404.1 (A), REQUIRING AWARDS BE MADE TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER, WE MUST DISAGREE SINCE IT IS OUR OPINION THAT YOUR BID WAS PROPERLY DETERMINED TO BE NONRESPONSIVE. FURTHER, IT HAS LONG BEEN HELD THAT IT IS INFINITELY MORE IN THE PUBLIC INTEREST TO ABIDE BY THE RULES OF COMPETITIVE BUILDING THAN TO OBTAIN A PECUNIARY ADVANTAGE IN A PARTICULAR CASE BY THE VIOLATION OF SUCH RULES. 17 COMP. GEN. 554 (1938).

FOR THE REASONS STATED, WE FIND NO LEGAL BASIS FOR OBJECTION TO ARMY'S ACTION IN REJECTING YOUR BID AS NONRESPONSIVE, AND YOUR PROTEST IS THEREFORE DENIED.