B-170162, AUG. 17, 1970

B-170162: Aug 17, 1970

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890 MAY NOT BE REGARDED AS OF A NEGLIGIBLE CONSEQUENCE AND THEREFORE REJECTION WAS PROPER. TO PARAGON HEATING & PLUMBING COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM DATED JUNE 26. THE SYSTEM WAS TO REPLACE A NUMBER OF SEPTIC TANK SYSTEMS PRESENTLY SERVING VARIOUS COMFORT STATIONS IN CAMPING AREAS. SP-1 AND SP-3 WERE REVISED TO PROVIDE A COMPLETION DATE OF CERTAIN PORTIONS OF THE WORK BY 31 AUGUST 1970 AND TO REQUIRE THE REMAINING WORK TO BE COMPLETED 120 CALENDAR DAYS AFTER RECEIPT OF NOTICE TO PROCEED. PRIOR TO AMENDMENT NO. 1 ALL WORK WAS REQUIRED TO BE COMPLETED 150 DAYS AFTER RECEIPT OF NOTICE TO PROCEED. A NEW PARAGRAPH REQUIRING THE CONTRACTOR TO MAKE QUANTITY SURVEYS AND COMPUTATIONS FOR PERIODIC PAYMENT PURPOSES WAS ADDED.

B-170162, AUG. 17, 1970

BID PROTEST -- FAILURE TO ACKNOWLEDGE AMENDMENTS DENIAL OF PROTEST OF LOW BIDDER AGAINST REJECTION OF BID FOR FAILURE TO ACKNOWLEDGE TWO AMENDMENTS TO AN INVITATION FOR INSTALLATION OF AN UNDERGROUND SEWER COLLECTION SYSTEM AT LEWIS AND CLARK LAKE. FAILURE OF A BIDDER TO ACKNOWLEDGE TWO AMENDMENTS, ONE OF WHICH HAS BEEN ESTIMATED TO CHANGE COST BY $5,890 MAY NOT BE REGARDED AS OF A NEGLIGIBLE CONSEQUENCE AND THEREFORE REJECTION WAS PROPER.

TO PARAGON HEATING & PLUMBING COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM DATED JUNE 26, 1970, IN WHICH ON BEHALF OF YOUR CLIENT, PARAGON HEATING AND PLUMBING COMPANY OF KANSAS CITY, YOU PROTESTED AN AWARD BEING MADE TO ANY BIDDER OTHER THAN YOUR CLIENT UNDER INVITATION FOR BIDS (IFB) DACW45-70-B-0113.

THE WORK TO BE PERFORMED UNDER THE INVITATION BASICALLY CONSISTED OF THE INSTALLATION OF AN UNDERGROUND SEWER COLLECTION SYSTEM WHICH EXTENDS SEVERAL MILES AND EMPTIES INTO A SEWAGE LAGOON ALSO TO BE CONSTRUCTED. THE SYSTEM WAS TO REPLACE A NUMBER OF SEPTIC TANK SYSTEMS PRESENTLY SERVING VARIOUS COMFORT STATIONS IN CAMPING AREAS, AND OTHER BUILDINGS AND FACILITIES LOCATED ON THE NORTH SHORE OF LEWIS AND CLARK LAKE. AMENDMENT NO. 1, DATED JUNE 12, 1970, MADE RATHER EXTENSIVE CHANGES IN THE CONTRACT SPECIFICATIONS, WHICH THE DEPARTMENT OF THE ARMY HAS EXPLAINED AS FOLLOWS:

"A. SPEC. PARS. SP-1 AND SP-3 WERE REVISED TO PROVIDE A COMPLETION DATE OF CERTAIN PORTIONS OF THE WORK BY 31 AUGUST 1970 AND TO REQUIRE THE REMAINING WORK TO BE COMPLETED 120 CALENDAR DAYS AFTER RECEIPT OF NOTICE TO PROCEED. PRIOR TO AMENDMENT NO. 1 ALL WORK WAS REQUIRED TO BE COMPLETED 150 DAYS AFTER RECEIPT OF NOTICE TO PROCEED. THE AMENDMENT SPECIFIED LIQUIDATED DAMAGES OF $85 PER DAY FOR EACH OF THE COMPLETION DATES, WHEREAS ORIGINALLY THERE HAD BEEN ONLY ONE LIQUIDATED DAMAGES PROVISION OF $85.

"B. SPEC. PAR. SP-8.--A NEW PARAGRAPH REQUIRING THE CONTRACTOR TO MAKE QUANTITY SURVEYS AND COMPUTATIONS FOR PERIODIC PAYMENT PURPOSES WAS ADDED. THIS WOULD PROBABLY CAUSE THE EMPLOYMENT OF AN OUTSIDE SURVEY CREW AND A CONSERVATIVE ESTIMATE OF THE COST IS $250.

"C. SPEC. PAR. 1-8.5 ON PAGE 1-3.--A REQUIREMENT WAS ADDED THAT THE CONTRACTOR FURNISH AND MAINTAIN ACCESS TO RECREATIONAL OR OTHER FACILITIES TO WHICH ACCESS WOULD BE TEMPORARILY DISRUPTED BY CONSTRUCTION ACTIVITY. ALSO A REQUIREMENT FOR SCHEDULING TO MINIMIZE SUCH DISRUPTIONS WAS ADDED. IN ORDER TO SPAN THE EXCAVATIONS TO MAINTAIN ACCESS, THREE TEMPORARY BRIDGES WILL HAVE TO BE BUILT AND REMOVED AT AN ESTIMATED COST OF $5,000.

"D. SPEC. PAR. 1-11 ("ORDER OF WORK") ON PAGE 1-5 WAS COMPLETELY CHANGED TO DEFINE THE WORK WHICH HAD TO BE COMPLETED BY THE 31 AUGUST 1970 COMPLETION DATE SET FORTH IN REVISED PAR. SP-1. IN GENERAL THE CONTRACTOR IS REQUIRED AS A FIRST ORDER OF WORK TO COMPLETE BY 31 AUGUST THE INSTALLATION OF THE SEWER LINE WHERE IT WILL CROSS VARIOUS PARKING AND ROAD AREAS. THIS WILL CAUSE EXPEDITING OF ORDERING AND PLACEMENT OF PIPE IN THESE AREAS AS WELL AS THE TRENCHING AND BACKFILL. IT IS CONSIDERED THAT AN EXTRA TRENCHING MACHINE WILL BE REQUIRED. ALSO THE CONTRACTOR WILL HAVE TO PERFORM WORK AT SEVERAL LOCATIONS AND THEN RETRACE HIS STEPS TO COMPLETE THE REMAINING WORK AS DISTINQUISHED FROM AN OPERATION WHICH WOULD START AT ONE END OF THE LINE AND PROGRESS STRAIGHT THROUGH TO THE OTHER END. ALTHOUGH DIFFICULT TO ESTIMATE, IT IS CONSIDERED THAT THIS WOULD ADD AT LEAST $600 IN COST.

"E. THE REMAINING CHANGES IN AMENDMENT NO. 1 ARE CONSIDERED AS NOT ACTUALLY AFFECTING OR HAVING ONLY AN INTANGIBLE EFFECT ON THE PRICE EXCEPT THE REVISION OF DRAWING NO. MG162-430E6 AND E16 MENTIONED IN PARAGRAPH 3 OF THE AMENDMENT WHEREIN A NEW 6-INCH STUBOUT IS REQUIRED AT MANHOLE NO. 19. THIS WOULD ADD APPROXIMATELY $10 TO THE COST."

AMENDMENT NO. 2 DATED JUNE 19, 1970, CLARIFIED THE "ORDER OF WORK," AS SET OUT IN PARAGRAPH 1-11.1 OF THE TECHNICAL PROVISIONS. IT DEFINED THE DEGREE OF COMPLETION IN THE FIRST ORDER OF WORK AS "THE EXTENT NECESSARY TO PERMIT PAVING AT EACH OF THE RESPECTIVE LOCATIONS BY OTHERS AFTER 31 AUGUST 1970." BOTH AMENDMENTS 1 AND 2 CONTAINED THE FOLLOWING STATEMENT: "THIS AMENDMENT AFFECTS THE PRICING. FAILURE TO ACKNOWLEDGE RECEIPT OF THIS AMENDMENT MAY CAUSE THE BID TO BE REJECTED."

SIX BIDS WERE RECEIVED AND WERE OPENED AT THE DESIGNATED TIME, JUNE 24, 1970, AT 11:00 A.M. THE LOW BID WAS THAT OF PARAGON HEATING & PLUMBING COMPANY IN THE AMOUNT OF $221,938.50. HOWEVER, THAT BID FAILED TO ACKNOWLEDGE RECEIPT OF AMENDMENTS 1 AND 2 OF SUBJECT IFB. THE CONTRACTING OFFICER DECIDED THAT HE HAD NO CHOICE BUT TO DECLARE YOUR CLIENT NONRESPONSIVE SINCE THE CONTRACTING OFFICER HAD NO WAY OF KNOWING WHETHER YOUR CLIENT WAS BIDDING ON THE PROPOSED PROCUREMENT WITH OR WITHOUT THE AMENDMENTS. THE SECOND LOW BIDDER, SHEESLEY PLUMBING AND HEATING COMPANY, INC., OF MITCHELL, SOUTH DAKOTA, WAS THEREFORE GIVEN THE AWARD.

WHILE ADMITTING IN YOUR TELEGRAM OF PROTEST THAT YOUR CLIENT FAILED TO ACKNOWLEDGE THE TWO AMENDMENTS, YOU CONTEND THAT SUCH FAILURE WAS MERELY AN ADMINISTRATIVE OVERSIGHT WHICH HAD NO EFFECT ON THE AMOUNT OF THE BID. IN THAT TELEGRAM YOU ALSO CONFIRMED THE BID PRICE AND ACKNOWLEDGED THE AMENDMENTS. IN THIS REGARD, 41 COMP. GEN. 550 (1962), AT 552 STATES IN PART AS FOLLOWS:

"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 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."

AS A GENERAL RULE, ANY STATEMENTS MADE AFTER BID OPENING WHICH WOULD MAKE RESPONSIVE AN OTHERWISE NONRESPONSIVE BID MUST BE DISREGARDED IN ORDER TO MAINTAIN THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. SEE 38 COMP. GEN. 819 (1959). HOWEVER, YOU ALLEGE THAT PURSUANT TO ASPR 2 405(IV)(B) YOUR CLIENT'S FAILURE TO ACKNOWLEDGE THE AMENDMENTS SHOULD BE WAIVED. ASPR 2-405(IV)(B) STATES AS FOLLOWS:

"MINOR INFORMALITIES OR IRREGULARITIES IN BIDS. A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER OF FORM OR IS SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BIDS, HAVING NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, QUALITY, QUANTITY, OR DELIVERY OF THE SUPPLIES OR PERFORMANCE OF THE SERVICES BEING PROCURED, AND THE CORRECTION OR WAIVER OF WHICH WOULD NOT AFFECT THE RELATIVE STANDING OF, OR BE OTHERWISE PREJUDICIAL TO, BIDDERS. THE CONTRACTING OFFICER SHALL EITHER GIVE TO THE BIDDER AN OPPORTUNITY TO CURE ANY DEFICIENCY RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY IN A BID, OR, WAIVE ANY SUCH DEFICIENCY WHERE IT IS TO THE ADVANTAGE OF THE GOVERNMENT. EXAMPLES OF MINOR INFORMALITIES OR IRREGULARITIES INCLUDE:

"(IV) FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT TO AN INVITATION FOR BIDS, BUT ONLY IF

"(B) THE AMENDMENT CLEARLY WOULD HAVE NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, QUALITY, QUANTITY, DELIVERY, OR THE RELATIVE STANDING OF BIDDERS, SUCH AS AN AMENDMENT CORRECTING A TYPOGRAPHICAL MISTAKE IN THE NAME OF THE GOVERNMENT PURCHASING ACTIVITY."

WHILE IT MAY WELL BE THAT AMENDMENT NO. 2 WOULD QUALIFY UNDER (B) ABOVE, WE ARE UNABLE TO CONCLUDE THAT AMENDMENT NO. 1 WAS MERELY A MATTER OF FORM AND NOT ONE OF SUBSTANCE, OR THAT THE SIGNIFICANCE OF THE CHANGES CONTAINED THEREIN WITH REGARD TO PRICE WAS TRIVIAL OR NEGLIGIBLE. FACT, THE CONTRACTING OFFICER ESTIMATED ITS EFFECT ON COST TO BE $5,850 IN ADDITION TO A SUBSTANTIAL INCREASE IN LIQUIDATED DAMAGES FOR LATE DELIVERY. IN THIS CONNECTION, 44 COMP. GEN. 753 (1965) AT 756 STATES IN PART AS FOLLOWS:

"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 BID, IT COULD NOT PROPERLY BE CONSIDERED AS JUSTIFYING A WAIVER OF THE DEFECT. 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."

YOU ALSO ALLEGE THAT, IN EFFECT, YOUR CLIENT DID ACKNOWLEDGE THE AMENDMENTS IN QUESTION, SINCE PARAGON DISCUSSED THE MATERIAL INVOLVED IN AMENDMENT NO. 1 WITH THE AREA ENGINEER ON JUNE 12, 1970, THE DATE IT WAS ISSUED. WHILE THE CONTRACTING OFFICER ACKNOWLEDGES SUCH A DISCUSSION, IT IS HIS POSITION THAT ORAL DISCUSSION CANNOT CURE THE BIDDER'S SUBSEQUENT FAILURE TO ACKNOWLEDGE IN WRITING HIS INTENTION TO BE BOUND BY THE AMENDMENT. WE AGREE WITH THIS CONCLUSION, AND IN SUPPORT THEREOF WE CALL ATTENTION TO B-169084, MAY 7, 1970, WHEREIN WE STATED AS FOLLOWS:

"IN OUR OPINION IT IS AN ESSENTIAL OF A VALID BID THAT IT BE SUFFICIENTLY DEFINITE TO ENABLE THE GOVERNMENT TO ACCEPT IT WITH CONFIDENCE THAT THE CONTRACT SO MADE CAN BE INTERPRETED AND ENFORCED WITHOUT RESORT TO EXTRANEOUS EVIDENCE. MOREOVER, THE COMPETITIVE BIDDING SYSTEM WOULD BE COMPROMISED IF A BIDDER WERE PERMITTED, AFTER BIDS ARE OPENED AND DISCLOSED TO THE OTHER BIDDERS, TO CLARIFY HIS BID BY SELF-SERVING EXPLANATIONS WHEN SUCH BID IS SO UNCLEAR AS TO LEAVE A SUBSTANTIAL DOUBT AS TO THE RIGHTS AND OBLIGATIONS THAT WOULD ARISE BY ACCEPTING IT. *** TO PERMIT THE BIDDER *** TO FURNISH EVIDENCE TO ESTABLISH AN INTENTION TO WHICH HE COULD NOT OTHERWISE BE HELD WOULD BE TANTAMOUNT TO PERMITTING HIM TO SUBMIT A NEW BID AFTER THE PRICES OF THE OTHER BIDDERS HAD BEEN ASCERTAINED. A BID WHICH IS NOT RESPONSIVE TO AN INVITATION MAY NOT BE CORRECTED TO MAKE IT RESPONSIVE. 38 COMP. GEN. 819 (1959)."

IN VIEW OF THE FOREGOING, THE PROTEST OF PARAGON HEATING AND PLUMBING COMPANY MUST BE DENIED.