B-170318, SEP. 3, 1970

B-170318, SEP. 3, 1970

BID PROTEST - FAILURE TO ACKNOWLEDGE AMENDMENT DECISION ON BEHALF OF INDUSTRIAL CONSTRUCTION CO., SECOND LOW BIDDER DENYING PROTEST AGAINST REJECTION OF SMALL BUSINESS SET-ASIDE PROCUREMENT BY GENERAL SERVICES ADMINISTRATION FOR PAINTING AND MISCELLANEOUS IMPROVEMENTS OF A POST OFFICE. SECOND LOW BIDDER FAILED TO ACKNOWLEDGE AMENDMENTS NO. 3, A NEW BID OPENING DATE, AND WAGE RATE DETERMINATION. HOWEVER IF ACKNOWLEDGMENT HAD BEEN RECEIVED IT WOULD HAVE OPERATED TO MAKE INDUSTRIAL'S THE NEXT HIGHER BID AND THIS IN TURN WOULD HAVE REQUIRED A WAIVER OF THE DEFICIENCY OF THE LOW BIDDER'S CONSTRUCTION BID BOND AND AWARD TO THAT BIDDER.

TO MELLI, SMITH & SHIELS:

REFERENCE IS MADE TO YOUR LETTER OF JULY 10, 1970, WITH ENCLOSURES, PROTESTING IN BEHALF OF INDUSTRIAL CONSTRUCTION CO., INC. (INDUSTRIAL) AGAINST THE REJECTION OF ITS BID UNDER SOLICITATION NO. GS-05BC-8856, ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA) FOR PAINTING AND MISCELLANEOUS IMPROVEMENTS AT THE U.S. POST OFFICE, MOUNT VERNON, INDIANA.

THE ABOVE SOLICITATION WAS ISSUED ON FEBRUARY 25, 1970, WITH BID OPENING TO TAKE PLACE ON MARCH 25, 1970. AMENDMENT NO. 1, ISSUED ON MARCH 9, 1970, SPECIFIED THAT THE CONTRACT WOULD BE SET ASIDE FOR SMALL BUSINESS. AMENDMENT NO. 2, ISSUED ON MARCH 23, 1970, POSTPONED THE BID OPENING INDEFINITELY BECAUSE OF A MAIL STRIKE. AMENDMENT NO. 3, ISSUED ON APRIL 24, 1970, SET MAY 6, 1970, AS THE NEW BID OPENING DATE. AMENDMENT NO. 3 ALSO INCORPORATED A NEW WAGE RATE DETERMINATION SINCE THE WAGE RATE DETERMINATION APPLICABLE TO THE SOLICITATION WAS DUE TO EXPIRE MAY 4, 1970. THE FOLLOWING CAUTIONARY INSTRUCTIONS APPEARED ON THE FACE OF AMENDMENT NO. 3:

"PLEASE NOTE: YOUR BID MAY NOT RECEIVE CONSIDERATION IF THIS AMENDMENT HAS NOT BEEN ACKNOWLEDGED ON THE BID FORM OR BY LETTER RECEIVED IN THE ISSUING OFFICE PRIOR TO BID OPENING TIME. ENVELOPE SHOULD BE IDENTIFIED IN LOWER LEFT HAND CORNER BY LOCATION, CONTRACT AND AMENDMENT NUMBER AND BID OPENING DATE."

SIX BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE LOW BID OF $9,995 WAS SUBMITTED BY J.A.T. CONSTRUCTION, WHILE INDUSTRIAL'S BID OF $10,865 WAS SECOND LOW. THE THIRD LOW BIDDER, GROHNE CO., INC. (GROHNE), SUBMITTED A BID OF $12,265. UPON REVIEWING THE BIDS, IT WAS DISCOVERED THAT J.A.T. CONSTRUCTION HAD ACKNOWLEDGED AMENDMENT NO. 1 ON ITS BID FORM AND AMENDMENT NO. 3 BY LETTER, BUT ITS BID BOND WAS LIMITED TO AN AMOUNT NOT IN EXCESS OF $1,519, WHICH WAS LESS THAN 20 PERCENT OF ITS BID PRICE. J.A.T. CONSTRUCTION'S FAILURE TO ACKNOWLEDGE AMENDMENT NO. 2 DID NOT AFFECT THE RESPONSIVENESS OF ITS BID INASMUCH THAT AMENDMENT MERELY POSTPONED THE BID OPENING DATE AND DID NOT HAVE ANY EFFECT ON PRICE, QUANTITY OR QUALITY AND, COULD BE WAIVED UNDER FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.405 AS A MINOR INFORMALITY OR IRREGULARITY. HOWEVER, THE BID WAS REJECTED BECAUSE THE BID BOND WAS LESS THAN 20 PERCENT OF THE BID PRICE. IN THIS CONNECTION, IT SHOULD BE NOTED THAT UNDER THE PROVISIONS OF FPR 1-10.103-4(B), THE DEFICIENCY IN J.A.T. CONSTRUCTION'S BID BOND COULD HAVE BEEN WAIVED HAD INDUSTRIAL'S BID BEEN RESPONSIVE, SINCE THAT REGULATION PROVIDES AS FOLLOWS:

"WHERE AN INVITATION FOR BIDS REQUIRES THAT A BID BE SUPPORTED BY A BID GUARANTEE AND NONCOMPLIANCE OCCURS, THE BID SHALL BE REJECTED, EXCEPT IN THE FOLLOWING SITUATIONS WHEN THE NONCOMPLIANCE SHALL BE WAIVED UNLESS THERE ARE COMPELLING REASONS CONTRARY:

"(B) WHERE THE AMOUNT OF THE BID GUARANTEE SUBMITTED, THOUGH LESS THAN THE AMOUNT REQUIRED BY THE INVITATION FOR BIDS, IS EQUAL TO OR GREATER THAN THE DIFFERENCE BETWEEN THE PRICE STATED IN THE BID AND THE PRICE STATED IN THE NEXT HIGHER ACCEPTABLE BID." HOWEVER, UPON EXAMINATION OF INDUSTRIAL'S BID IT WAS DETERMINED TO BE NONRESPONSIVE BECAUSE IT FAILED TO ACKNOWLEDGE AMENDMENT NO. 3, AND SINCE THE LOWEST ACCEPTABLE BID (GROHNE'S) EXCEEDED THE LOW BID BY AN AMOUNT GREATER THAN THE DEFICIENT BID BOND, THE DEFICIENCY IN J.A.T. CONSTRUCTION'S BID COULD NOT BE WAIVED.

IN VIEW OF THE FOREGOING, IT IS APPARENT THAT INDUSTRIAL WOULD NOT HAVE BEEN ENTITLED TO AN AWARD EVEN IF GSA HAD BEEN IN RECEIPT OF INDUSTRIAL'S ACKNOWLEDGMENT OF AMENDMENT NO. 3, SINCE SUCH ACKNOWLEDGMENT WOULD HAVE OPERATED TO MAKE INDUSTRIAL'S BID "THE NEXT HIGHER ACCEPTABLE BID" UNDER FPR 1-10.103-4(B) QUOTED ABOVE. THIS WOULD IN TURN HAVE OPERATED TO REQUIRE A WAIVER OF THE DEFICIENCY IN J.A.T. CONSTRUCTION'S BID BOND, AND THUS REQUIRED AN AWARD TO THAT BIDDER.

IN YOUR LETTER OF JULY 10 YOU STATE THAT YOUR CLIENT SENT A LETTER UNDER DATE OF MAY 1 ACKNOWLEDGING ALL THREE AMENDMENTS, WHICH SHOULD HAVE BEEN RECEIVED BY GSA BEFORE BID OPENING ON MAY 6, AND THAT GSA'S NOTIFICATION IMPLIES RECEIPT OF ACKNOWLEDGMENT OF AMENDMENTS 1 AND 2. HOWEVER, GSA STATES THAT THEIR RECORDS DO NOT REFLECT RECEIPT OF THE LETTER OF ACKNOWLEDGMENT ALLEGEDLY SENT BY YOUR CLIENT. IN VIEW OF OUR CONCLUSION, AS SET OUT ABOVE, THAT INDUSTRIAL WOULD NOT HAVE BEEN ENTITLED TO AN AWARD EVEN IF IT HAD ACKNOWLEDGED RECEIPT OF AMENDMENT NO.3, ANY DISCUSSION OF WHETHER GSA DID RECEIVE, OR SHOULD HAVE RECEIVED, INDUSTRIAL'S LETTER OF MAY 1 WOULD BE PURELY ACADEMIC.

FOR THE REASONS STATED, WE FIND NO LEGAL BASIS TO OBJECT TO THE ACTION OF GSA IN AWARDING CONTRACT NO. GS-05BC-8856 TO GROHNE. ACCORDINGLY, YOUR PROTEST IS DENIED.