B-167263-1, SEP 18, 1969

B-167263-1: Sep 18, 1969

Additional Materials:

Contact:

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

 

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

A BIDDER WHO FAILED TO ACKNOWLEDGE AN AMENDMENT THAT MERELY REPEATED IN MORE LEGIBLE FORM THE TIME SET FOR BID OPENING AND CERTAIN OTHER INFORMATION THAT WAS ILLEGIBLE IN THE BID INVITATION IS NOT THEREBY REGARDED AS HAVING AN OPTION TO ACCEPT OR DENY THE AWARD AND. MATTER IS REFERRED TO THE PROCURING AGENCY WITH THE SUGGESTION THAT BEFORE THE OPTION IS EXERCISED. NARIN & MANN: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 18. IT IS REPORTED THAT AFTER ISSUANCE OF THE INVITATION. STATING THAT THIS INFORMATION WAS "SMUDGED" ON THE INVITATION. THE CONTRACTING OFFICER WAS FURTHER ADVISED THAT THE INVITATION CONTAINED A NUMBER OF SMUDGED OR "WASHED OUT" AREAS. BIDS WERE OPENED AS SCHEDULED ON JUNE 17.

B-167263-1, SEP 18, 1969

BID PROTEST - DEVIATIONS - ADDENDUM ACKNOWLEDGMENT DECISION DENYING PROTEST OF DUTCH BOY'S CLEANING SERVICE, SECOND LOW BIDDER, FOR JANITORIAL SERVICES FOR NAVY PUBLICATIONS AND FORMS CENTER, PHILADELPHIA BY DEFENSE INDUSTRIAL SUPPLY CENTER. A BIDDER WHO FAILED TO ACKNOWLEDGE AN AMENDMENT THAT MERELY REPEATED IN MORE LEGIBLE FORM THE TIME SET FOR BID OPENING AND CERTAIN OTHER INFORMATION THAT WAS ILLEGIBLE IN THE BID INVITATION IS NOT THEREBY REGARDED AS HAVING AN OPTION TO ACCEPT OR DENY THE AWARD AND, THEREFORE, AWARD RESULTED IN A VALID CONTRACT. WITH RESPECT TO ALLEGATIONS CONCERNING SUCCESSFUL BIDDER'S PRIOR PERFORMANCE, MATTER IS REFERRED TO THE PROCURING AGENCY WITH THE SUGGESTION THAT BEFORE THE OPTION IS EXERCISED, THE ALLEGATIONS BE REVIEWED.

GOODIS, GREENFIELD, NARIN & MANN:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 18, 1969, AND SUBSEQUENT CORRESPONDENCE, PROTESTING ON BEHALF OF DUTCH BOY'S CLEANING SERVICE (DUTCH BOY'S) AGAINST AWARD OF A CONTRACT TO ANOTHER FIRM UNDER SOLICITATION NO. DSA-500-69-B-6662, ISSUED ON JUNE 2, 1969, BY THE DEFENSE INDUSTRIAL SUPPLY CENTER (DISC), PHILADELPHIA, PENNSYLVANIA.

THE INVITATION SOLICITED BIDS FOR THE PERFORMANCE OF JANITORIAL SERVICES DURING THE PERIOD JULY 1, 1969, THROUGH JUNE 30, 1970, AT VARIOUS BUILDING AREAS LOCATED AT THE NAVAL PUBLICATIONS AND FORMS CENTER, PHILADELPHIA, PENNSYLVANIA.

IT IS REPORTED THAT AFTER ISSUANCE OF THE INVITATION, THE CONTRACTING OFFICER RECEIVED TELEPHONE CALLS FROM THREE FIRMS, EACH REQUESTING ADVICE AS TO THE TIME SET FOR BID OPENING, STATING THAT THIS INFORMATION WAS "SMUDGED" ON THE INVITATION. THE CONTRACTING OFFICER WAS FURTHER ADVISED THAT THE INVITATION CONTAINED A NUMBER OF SMUDGED OR "WASHED OUT" AREAS, ALL OF WHICH HE HAS INDICATED COULD BE READ EXCEPT FOR (1) THE TIME OF BID OPENING ON PAGE 1 OF THE SOLICITATION, AND (2) THE LAST FEW WORDS ON THE SIXTH LINE OF THE "INSPECTION" CLAUSE ON PAGE 38 OF THE INVITATION. AS A RESULT OF SUCH ADVICE THE CONTRACTING OFFICER ISSUED AMENDMENT NO. 001 ON JUNE 4, 1969, CLARIFYING THE TIME OF BID OPENING AS "10 A.M. EDST 6/17/69," AND REITERATING CERTAIN WORDS IDENTIFIED BY PAGE AND LINE NUMBER, WHICH APPEARED TO BE SMUDGED OR "WASHED OUT" IN THE ORIGINAL INVITATION, AND ENCLOSED TWO RETYPED PAGES OF THE ORIGINAL INVITATION WHICH HAD NOT BEEN TOO CLEARLY REPRODUCED.

BIDS WERE OPENED AS SCHEDULED ON JUNE 17, 1969. DIAMOND MAINTENANCE AND JANITORIAL SERVICE, INC. (DIAMOND) WAS THE LOW BIDDER AND DUTCH BOY'S THE SECOND LOW BIDDER . HOWEVER, UNLIKE THE OTHER TWO BIDDERS, DIAMOND FAILED TO ACKNOWLEDGE RECEIPT OF THE AMENDMENT PRIOR TO THE OPENING OF BIDS. THE CONTRACTING OFFICER WAS OF THE OPINION THAT SINCE THE AMENDMENT DID NOT AFFECT THE PRICE, QUANTITY OR QUALITY OF THE WORK TO BE PERFORMED, THE FAILURE OF DIAMOND TO ACKNOWLEDGE THE AMENDMENT WAS A MINOR INFORMALITY OR IRREGULARITY WHICH COULD BE WAIVED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2-405 OF THE ARMED SERVICES PROCUREMENT REGULATIONS (ASPR). CONSEQUENTLY, AND DUE TO THE FACT THAT PERFORMANCE HAD TO COMMENCE UNDER THE INVITATION ON JULY 1, 1969, THE CONTRACTING OFFICER IN ACCORDANCE WITH ASPR 2-407.9 (B) (3), AWARDED THE CONTRACT TO DIAMOND ON JUNE 27, 1969. THE CONTRACT IS RENEWABLE AT THE OPTION OF THE GOVERNMENT ON A QUARTERLY BASIS FOR A MAXIMUM PERIOD OF ONE YEAR.

WHILE YOU CONCEDE THAT AMENDMENT 001 WAS "INTENDED TO DUPLICATE WITHOUT CHANGE THE LANGUAGE OF THE SOLICITATION, AND THEREFORE CLEARLY COULD NOT AFFECT THE PRICE, QUANTITY OF QUALITY OF THE WORK TO BE PERFORMED," YOU CONTEND THAT THE REAL QUESTION TO BE ANSWERED IS "WHETHER THE SOLICITATION, BECAUSE IT WAS ILLEGIBLE IN CERTAIN RESPECTS, IS REASONABLY CAPABLE OF BEING INTERPRETED IN TWO OR MORE DIFFERENT WAYS SUCH THAT THE PRICE, QUANTITY OR QUALITY OF THE WORKS TO BE PERFORMED WOULD BE MATERIALLY DIFFERENT DEPENDING ON THE INTERPRETATION." SPECIFICALLY YOU ASK "IN OTHER WORDS, HOW IS IT POSSIBLE TO DETERMINE HOW EACH BIDDER, PRIOR TO RECEIVING AMENDMENT 001, INTERPRETED THAT WHICH HE COULD NOT READ? UNDER THESE CIRCUMSTANCES IT IS INCONCEIVABLE THAT AMENDMENT 001 WAS ANYTHING LESS THAN ESSENTIAL TO ASSURE THAT ALL BIDDERS WERE BIDDING ON THE SAME CONTRACT. *** DIAMOND'S FAILURE TO ACKNOWLEDGE RECEIPT OF AMENDMENT 001 WAS THEREFORE FATAL TO ITS BID, WHICH BID SHOULD HAVE BEEN DISQUALIFIED BY THE CONTRACTING OFFICER."

WITH SUPPORTING EXHIBITS AND SCHEDULES, YOU HAVE ALSO URGED THAT BECAUSE OF DELIBERATE UNDERBIDDING AND PLANNED STRATEGIC NONPERFORMANCE BY DIAMOND ON PRIOR CONTRACTS, AND BECAUSE OF INEFFICIENT, UNINFORMED ADMINISTRATION OF SUCH CONTRACTS BY DISC, THE GOVERNMENT SHOULD REFRAIN FROM EXERCISING ITS OPTION TO EXTEND THE TIME OF THE CONTRACT.

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 CANNOT BE WAIVED. 37 COMP. GEN. 785. THE 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, AND THE FAILURE TO ACKNOWLEDGE GIVES THE FAILING BIDDER AN OPTION TO DECIDE 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 IS BASED ON SOUND POLICY, THE RULE HAS NOT BEEN APPLIED INDISCRIMINATELY BY OUR OFFICE TO PREVENT WAIVER IN ALL CASES INVOLVING FAILURE TO ACKNOWLEDGE ADDENDA. IN THE INSTANT CASE THE AMENDMENT INCLUDED NO ALTERATION OR CHANGE IN THE TERMS OF THE INVITATION, BUT MERELY DUPLICATED IN MORE LEGIBLE FORM THE TIME SET FOR BID OPENING AND THE ROOM NUMBER OF THE OFFICE AT WHICH THE CONTRACTOR, IF HE SO DESIRED, COULD OBTAIN A COPY OF THE INSPECTOR'S NIGHTLY REPORT, AND VARIOUS OTHER PORTIONS OF THE SPECIFICATIONS, THE LEGIBILITY OF WHICH WAS CONSIDERED DOUBTFUL.

HAVING REGARD FOR THE FACT THAT THE AMENDMENT DID NOT AFFECT PRICE, QUALITY OR QUANTITY, IT SEEMS APPARENT THAT THE FAILURE OF DIAMOND TO ACKNOWLEDGE THE AMENDMENT DID NOT RESULT IN GIVING IT A CHOICE AFTER BID OPENING TO EITHER ACCEPT OR DENY AN AWARD OF THE CONTRACT. WITH RESPECT TO YOUR ARGUMENT THAT IT IS IMPOSSIBLE TO DETERMINE HOW EACH BIDDER, PRIOR TO RECEIVING THE AMENDMENT, INTERPRETED THAT WHICH HE COULD NOT READ, ATTENTION IS DIRECTED TO THE FOLLOWING PROVISION APPEARING ON PAGE 5 OF THE SOLICITATION, HEADED "MISSING PAGES":

"UNLESS THE BIDDER SPECIFICALLY STATES OTHERWISE, BY SIGNING AND RETURNING A BID THE BIDDER AGREES TO BE BOUND BY ALL OF THE TERMS, CONDITIONS AND CLAUSES WHICH COMPRISE THE INVITATION, EXCLUSIVE OF ANY AMENDMENTS TO THE INVITATION, REGARDLESS OF WHETHER THE PAGE CONTAINING ANY SUCH TERM, CONDITION OR CLAUSE (INCLUDING THIS PROVISION) IS OR IS NOT RETURNED BY THE BIDDER. THE DOCUMENTS COMPRISING THIS INVITATION ARE LISTED ON PAGE 46. CAUTION: THIS PROVISION DOES NOT RELIEVE THE BIDDER OF THE RESPONSIBILITY TO COMPLETE AND RETURN THOSE PAGES OF THE INVITATION WHICH REQUIRE THE BIDDER TO INSERT INFORMATION NECESSARY FOR EVALUATION OF HIS BID. FAILURE TO COMPLETE AND RETURN SUCH INFORMATION MAY BE CAUSE FOR REJECTION OF THE BID. ***"

WE BELIEVE THE EFFECT OF THIS IS TO IMPOSE UPON A BIDDER FULL RESPONSIBILITY FOR COMPLIANCE WITH ALL PROVISIONS OF THE INVITATION AS ISSUED BY THE PROCURING AGENCY, AND TO PRECLUDE ANY RELIEF TO A BIDDER CLAIMING THAT HE DID NOT RECEIVE OR COULD NOT READ ANY PART THEREOF. HAVE EXAMINED A COPY OF THE BID ACTUALLY SUBMITTED BY DIAMOND IN THIS INSTANCE AND FIND NOWHERE ANY WORDS OR FIGURES WHICH COULD REASONABLY HAVE BEEN READ AS DIFFERENT FROM WHAT WAS ORIGINALLY STATED IN THE INVITATION. THE TIME OF OPENING COULD NOT BE READ AT ALL, BUT THE BID WAS IN FACT SUBMITTED ON TIME; THE ROOM NUMBER OF THE PUBLIC WORKS OFFICE ON PAGE 38 WAS ALSO COMPLETELY ILLEGIBLE, BUT THIS WAS WHOLLY IMMATERIAL AND NEED NOT HAVE BEEN INCLUDED, THE DESIGNATION OF THE OFFICE BEING SUFFICIENT.

ON THE RECORD BEFORE US WE ARE UNABLE TO CONCLUDE THAT DIAMOND OBTAINED ANY COMPETITIVE ADVANTAGE FROM ITS FAILURE TO ACKNOWLEDGE RECEIPT OF THE AMENDMENT, OR THAT ACCEPTANCE OF ITS BID DID NOT OBLIGATE IT TO FULL PERFORMANCE IN ACCORDANCE WITH ALL THE TERMS OF THE INVITATION AS ISSUED. ACCORDINGLY, WE FIND NO LEGAL BASIS TO QUESTION THE WAIVER BY DISC OF DIAMOND'S FAILURE TO ACKNOWLEDGE RECEIPT OF THE AMENDMENT, AND WE CONCLUDE THAT THE AWARD TO DIAMOND RESULTED IN A VALID CONTRACT WHICH IS ENFORCEABLE IN ACCORDANCE WITH ITS TERMS BY BOTH THE GOVERNMENT AND DIAMOND.

ALSO, SINCE WE HAVE CONCLUDED THAT THE CONTRACT AS AWARDED IS TO BE CONSTRUED STRICTLY ACCORDING TO ITS TERMS, YOUR CONTENTIONS CONCERNING DELIBERATE UNDERBIDDING AND CONTRACT ADMINISTRATION NEED NOT BE FURTHER DISCUSSED, EXCEPT TO STATE THAT WE HAVE LONG RECOGNIZED THE PRIMACY OF THE CONTRACTING AGENCY IN DETERMINING THE RESPONSIBILITY OF A BIDDER AND IN DETERMINING WHETHER AS A MATTER OF FACT THE PERFORMANCE OFFERED BY THE CONTRACTOR COMPLIES WITH CONTRACT SPECIFICATIONS. 17 COMP. GEN. 554; 215 COMP. GEN. 357. HOWEVER, BECAUSE OF THE SERIOUS NATURE OF YOUR ALLEGATIONS CONCERNING PRIOR CONTRACT PERFORMANCE WE ARE TODAY FURNISHING THE DIRECTOR OF THE DEFENSE SUPPLY AGENCY A COPY OF YOUR LETTER OF AUGUST 8, 1969, WITH ITS ENCLOSURES, WITH THE SUGGESTION THAT BEFORE THE OPTION IN THE DIAMOND CONTRACT IS EXERCISED, A CAREFUL REVIEW OF YOUR ALLEGATIONS SHOULD BE MADE SO AS TO DETERMINE, FROM THE STANDPOINT OF BOTH QUALITY AND PRICE, WHETHER SUCH ACTION WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT.

FOR ALL THE FOREGOING REASONS, YOUR PROTEST ON BEHALF OF DUTCH BOY'S IS DENIED.