B-167241, JUL. 3, 1969

B-167241, JUL. 3, 1969

TO DR. SEABORG:

WE REFER TO A LETTER DATED JUNE 13, 1969, FROM THE MANAGER OF THE SAN FRANCISCO OPERATIONS OFFICE, REQUESTING A DECISION ON THE ACCEPTABILITY OF A BID WHEN THE BIDDER FAILED TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT TO THE INVITATION. THE PROCUREMENT IS FOR CERTAIN CONSTRUCTION AT THE LIVERMORE SITE, ALAMEDA, CALIFORNIA, AND WAS INITIATED BY THE ISSUANCE ON MAY 12, 1969, OF INVITATION FOR BIDS NO. 69-L-7-806.

THE AMENDMENT IN QUESTION WAS DATED MAY 19, 1969, AND IN SUBSTANCE CHANGED CERTAIN SPECIFICATIONS AND DRAWINGS INVOLVING ADDITIONAL WORK. IS REPORTED THAT THE EXTRA WORK OCCASIONED BY THIS AMENDMENT IS ESTIMATED TO COST $174. UPON THE OPENING OF BIDS ON MAY 28, 1969, IT WAS DISCLOSED THAT THE LOW BID WAS SUBMITTED BY MONTEREY MECHANICAL CO. IN THE AMOUNT OF $78,800. THE SECOND LOW BID WAS SUBMITTED BY PMI CORPORATION IN THE AMOUNT OF $87,340. HOWEVER, MONTEREY FAILED TO ACKNOWLEDGE RECEIPT OF THE MAY 19 AMENDMENT.

IN THE JUNE 13 LETTER, SPECIFIC ATTENTION IS DRAWN TO OUR DECISION PUBLISHED AT 44 COMP. GEN. 753 WHERE WE STATED IN PART:

"THE GENERAL RULE AS TO THE EFFECT OF THE FAILURE OF A BIDDER TO ACKNOWLEDGE AN AMENDMENT TO AN INVITATION FOR BIDS IS THAT WHEN THE AMENDMENT AFFECTS THE PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT, THE BIDDER'S FAILURE TO ACKNOWLEDGE THE AMENDMENT IN COMPLIANCE WITH THE TERMS OF THE INVITATION OR AMENDMENT CANNOT BE WAIVED. 37 COMP. GEN. 785. * *

"HOWEVER, THE GENERAL RULE HAS NOT BEEN APPLIED INDISCRIMINATELY BY OUR OFFICE TO PRECLUDE WAIVER IN ALL CASES INVOLVING FAILURE TO ACKNOWLEDGE AN INVITATION AMENDMENT. WAIVER HAS BEEN PERMITTED WHERE THE MODIFICATION COULD HAVE AFFECTED THE COST OF THE WORK ONLY TO A NEGLIGIBLE DEGREE, 34 COMP. GEN. 581; WHERE THE ADDITIONAL COST WAS TRIVIAL WHEN COMPARED WITH THE TOTAL COST OF THE WORK, B-141383, JANUARY 14, 1960, AND B-144784, JUNE 21, 1961; AND WHERE THE ADDITIONAL COST WAS CONSIDERED NEGLIGIBLE, B- 144185, JANUARY 25, 1961. SEE, ALSO, 41 COMP. GEN. 550.

"IT IS CLEAR FROM THE ABOVE SUMMARY THAT WE HAVE NEVER APPROVED WAIVER IN SUCH CIRCUMSTANCES AS ARE HERE PRESENT WHERE THE MAXIMUM POSSIBLE AMOUNT OF DEVIATION WAS AS MUCH AS $200. * * *

"WHILE IN SEVERAL OF OUR DECISIONS REFERENCE HAS BEEN MADE TO THE TOTAL OR OVERALL COST OF THE WORK INVOLVED AS A FACTOR TO BE CONSIDERED IN DETERMINING WHETHER THE POSSIBLE COST EFFECT OF AN UNACKNOWLEDGED ADDENDUM WAS SO TRIVIAL AS TO JUSTIFY WAIVER, WE BELIEVE THAT THE PROPER EFFECT OF THAT CRITERION SHOULD BE TO LIMIT RATHER THAN TO ENLARGE THE APPLICATION OF THE DE MINIMIS RULE. IN OTHER WORDS, WHILE AN AMOUNT IN THE VICINITY OF $100 MIGHT APPEAR TO BE TRIVIAL IN ITSELF, IF IN FACT IT WAS A FAIRLY SUBSTANTIAL PART OF THE TOTAL COST, OR MORE THAN AN INSIGNIFICANT PART OF THE DIFFERENCE BETWEEN THE DEFECTIVE BID AND THE NEXT AVAILABLE WAIVER OF THE DEFECT. ON THE OTHER HAND, WE WOULD NOT BE INCLINED IN THE ORDINARY CASE TO CONSIDER A POSSIBLE DEVIATION OF $1,000 OR MORE AS TRIVIAL OR INSIGNIFICANT IN THE AREA UNDER CONSIDERATION, NO MATTER HOW SMALL A FRACTION OF THE TOTAL COST OR BID DIFFERENCE IT MIGHT BE.'

SECTION 1-2.405 (D) (2) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) PROVIDES:

"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:

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

WE HELD IN B-163466, FEBRUARY 14, 1968, THAT AN AMENDMENT AFFECTED PRICE IN A NEGLIGIBLE OR TRIVIAL MANNER. IN THAT CASE, THE LOW BID IN THE AMOUNT OF $6,288, FAILED TO ACKNOWLEDGE RECEIPT OF THE AMENDMENT. THE DIFFERENCE BETWEEN THE LOW BID AND THE SECOND LOW BID WAS $597. THE COST ATTRIBUTABLE TO THE CHANGES MADE BY THE AMENDMENT WAS $29.80. THIS ADDITIONAL COST WAS 0.47 PERCENT OF THE LOW BID AND 4.99 PERCENT OF THE DIFFERENCE BETWEEN THE LOW AND SECOND LOW BIDS. IN THE PRESENT CASE, IT IS REPORTED THAT THE $174 ESTIMATE IS 0.22 PERCENT OF MONTEREY'S BID AND IS 2 PERCENT OF THE DIFFERENCE BETWEEN MONTEREY'S AND PMI'S BIDS. THEREFORE, IT CLEARLY APPEARS THAT THE PRESENT CASE FALLS WITHIN PERMISSIBLE LIMITS AND, AS SUCH, MAY BE CONSIDERED AS TRIVIAL.

WE NOTE IN THE ADMINISTRATIVE FILE A COPY OF A TELEGRAM FROM PMI TO THE DIRECTOR OF THE ENGINEERING DIVISION IN BERKELEY, CALIFORNIA, IN WHICH SEVERAL DECISIONS OF THIS OFFICE ARE CITED BY PMI IN SUPPORT OF THE POSITION THAT MONTEREY'S FAILURE SHOULD NOT BE WAIVED. ALL OF THESE DECISIONS APPEAR DISTINGUISHABLE. THE CASES CITED (B-151188, MAY 8, 1963; B-152814, JANUARY 9, 1964; B-157467, DECEMBER 21, 1965; AND B 166333, APRIL 23, 1969), ARE DISTINGUISHABLE BECAUSE THE FAILURES TO ACKNOWLEDGE AMENDMENTS WERE REQUIRED TO BE DETERMINED UNDER THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). AS IS MADE CLEAR IN THE LAST CITED DECISION, ASPR 2-405 PERMITS WAIVER OF A BIDDER'S FAILURE TO ACKNOWLEDGE AN AMENDMENT WHEN THE AMENDMENT "WOULD HAVE NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, AND NO EFFECT ON QUALITY, QUANTITY, DELIVERY, OR THE RELATIVE STANDING OF BIDDERS.' UNLIKE FPR 1-2.405, THEREFORE, ASPR 2-405 DOES NOT PERMIT APPLICATION OF THE DE MINIMIS RULE EXCEPT WITH RESPECT TO PRICE. THEREFORE, AS STATED IN B-166333, WHILE A GIVEN AMENDMENT MAY AFFECT PRICE IN A TRIVIAL OR NEGLIGIBLE MANNER, THE FAILURE TO ACKNOWLEDGE AN AMENDMENT MAY NOT BE WAIVED IF THERE IS ANY EFFECT AT ALL ON QUALITY, QUANTITY, DELIVERY, OR THE RELATIVE STANDING OF BIDDERS.

FURTHERMORE, DECISION B-147106, SEPTEMBER 25, 1961, CITED BY PMI, HELD THAT THE UNACKNOWLEDGED AMENDMENT REPRESENTED ADDITIONAL WORK OF AN APPROXIMATE VALUE OF $2,300. UNDER THE CRITERIA IN 44 COMP. GEN. 753, IT IS NOT LIKELY IN THE ORDINARY CASE THAT WE WOULD CONSIDER A POSSIBLE DEVIATION OF $1,000 OR MORE AS TRIVIAL OR INSIGNIFICANT NO MATTER HOW SMALL A PERCENTAGE OF THE TOTAL COST OR BID DIFFERENCE IT MIGHT BE.

THE DECISION B-166748, MAY 14, 1969, 48 COMP. GEN. -----, ALSO CITED BY PMI, DOES NOT INVOLVE AN APPLICATION OF THE QUOTED PROVISION OF FPR. RATHER, THE CASE INVOLVES AN ALLEGED ERROR IN BID AND IS INAPPLICABLE HERE.

FOR THE ABOVE REASONS, WE CONCLUDE THAT UNDER FPR 1-2.405 (D) (2), THE FAILURE OF MONTEREY TO ACKNOWLEDGE RECEIPT OF AMENDMENT NO. 1 TO INVITATION NO. 69-L-7-806 WAS A FAILURE HAVING ONLY "A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, QUALITY, QUANTITY, OR DELIVERY," AND THEREFORE MAY BE WAIVED AS A MINOR INFORMALITY OR IRREGULARITY.