B-171797, APR 15, 1971

B-171797: Apr 15, 1971

Additional Materials:

Contact:

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

 

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

ALTHOUGH PROTESTANT WAS LOW BIDDER AT $143.25 PER UNIT. THE CONTRACTING OFFICER WAS WITHOUT LEGAL AUTHORITY TO ACCEPT THE BID AS SUBMITTED. THE PROTEST IS THEREFORE DENIED. TO OCRAM: REFERENCE IS MADE TO A LETTER DATED JANUARY 27. AMENDMENT 0001 WAS ISSUED. THE AMENDMENT WAS NECESSITATED. ALTHOUGH YOUR BID PRICE OF $143.25 PER UNIT WAS LOW. THE BID WAS REJECTED PURSUANT TO ASPR 2-404.2(A) FOR FAILURE TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE IFB. AWARD WAS MADE TO THE NEXT LOW BIDDER AT A PRICE OF $145 PER UNIT. WITH THE EXCEPTION OF FEDERAL TAXES AND DUTIES FOR WHICH PRICE ADJUSTMENT IS PROVIDED FOR TAX CHANGES. THE RESPONSIVENESS OF THE BID IS DETERMINED FROM THE BID AS SUBMITTED.

B-171797, APR 15, 1971

BID PROTEST - BID RESPONSIVENESS DECISION DENYING PROTEST AGAINST AWARD OF CONTRACT TO ANY OTHER BIDDER UNDER IFB ISSUED BY THE DEFENSE GENERAL SUPPLY CENTER FOR A QUANTITY OF BUS FAILURE ALARMS. ALTHOUGH PROTESTANT WAS LOW BIDDER AT $143.25 PER UNIT, THE FAILURE TO ACKNOWLEDGE A MATERIAL AMENDMENT CONTAINING THE REQUIRED ASPR CLAUSE, "FEDERAL, STATE AND LOCAL TAXES", RENDERED ITS BID NONRESPONSIVE, AND THE CONTRACTING OFFICER WAS WITHOUT LEGAL AUTHORITY TO ACCEPT THE BID AS SUBMITTED, 40 COMP. GEN. 126 (1960). THE PROTEST IS THEREFORE DENIED.

TO OCRAM:

REFERENCE IS MADE TO A LETTER DATED JANUARY 27, 1971, FROM CONGRESSMAN JOHN H. TERRY, REQUESTING THAT OUR OFFICE REVIEW THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS (IFB) NO. DSA-400-71-B-2717, ISSUED BY THE DEFENSE GENERAL SUPPLY CENTER.

THE IFB, ISSUED NOVEMBER 12, 1970, SOLICITED BIDS ON A QUANTITY OF BUS FAILURE ALARMS. ON NOVEMBER 20, AMENDMENT 0001 WAS ISSUED. THE AMENDMENT WAS NECESSITATED, IN PART, BY THE CONTRACTING OFFICER'S DISCOVERY THAT A REQUIRED ARMED SERVICES PROCUREMENT REGULATION (ASPR) CLAUSE ENTITLED "FEDERAL, STATE AND LOCAL TAXES" HAD NOT BEEN INCLUDED IN THE IFB. THE AMENDMENT ADDED THE CLAUSE TO THE SOLICITATION.

ALTHOUGH YOUR BID PRICE OF $143.25 PER UNIT WAS LOW, THE CONTRACTING OFFICER DETERMINED THE BID TO BE NONRESPONSIVE BECAUSE OF THE FAILURE TO RETURN THE AMENDMENT OR OTHERWISE ACKNOWLEDGE RECEIPT THEREOF. ACCORDINGLY, THE BID WAS REJECTED PURSUANT TO ASPR 2-404.2(A) FOR FAILURE TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE IFB, AND AWARD WAS MADE TO THE NEXT LOW BIDDER AT A PRICE OF $145 PER UNIT.

THE TAX CLAUSE HERE INVOLVED REQUIRES THAT THE CONTRACT PRICE INCLUDE ALL APPLICABLE FEDERAL, STATE AND LOCAL TAXES AND DUTIES. THE CLAUSE IMPOSES THE RISK OF TAX RATES, BOTH PRESENT AND FUTURE, UPON THE BIDDER, WITH THE EXCEPTION OF FEDERAL TAXES AND DUTIES FOR WHICH PRICE ADJUSTMENT IS PROVIDED FOR TAX CHANGES. SEE B-156842, JUNE 11, 1965.

YOU MAINTAIN THAT YOUR BID PRICE INCLUDED ALL APPLICABLE TAXES, NOTWITHSTANDING THE FAILURE TO RETURN OR ACKNOWLEDGE THE AMENDMENT. HOWEVER, THE RESPONSIVENESS OF THE BID IS DETERMINED FROM THE BID AS SUBMITTED. SEE 45 COMP. GEN. 221, 222 (1965); 42 ID. 502, 504 (1963). EXAMINATION OF YOUR BID DOES NOT INDICATE THAT THE PRICE INCLUDED ALL APPLICABLE TAXES OR THAT YOU OTHERWISE ACCEPTED THE RISK IMPOSED ON BIDDERS BY THE TAX CLAUSE.

WHILE IT IS UNFORTUNATE THAT YOU DID NOT RECEIVE AMENDMENT 0001, THIS FACT IS INSUFFICIENT TO CURE THE NONRESPONSIVENESS OF THE BID. WE HAVE CONSISTENTLY HELD THAT THE FAILURE TO ACKNOWLEDGE OR RETURN A MATERIAL AMENDMENT MAKES A BID NONRESPONSIVE EVEN IF THE AMENDMENT WAS NOT RECEIVED BY THE BIDDER. B-170064, JULY 21, 1970; B-167409, SEPTEMBER 11, 1969; B- 166530, JULY 3, 1969; B-166255, MAY 27, 1969. UNDER THESE CIRCUMSTANCES, THE CONTRACTING OFFICER IS WITHOUT LEGAL AUTHORITY TO ACCEPT THE BID AS SUBMITTED. 40 COMP. GEN. 126 (1960). IN THAT REGARD, IN B-166255, SUPRA, WE SAID:

" *** THIS SEEMINGLY HARSH RULE IS NECESSARY BECAUSE OTHERWISE AN AWARD TO A BIDDER NOT ACKNOWLEDGING A MATERIAL AMENDMENT WOULD NOT BIND THAT BIDDER TO THE SAME CONTRACT TERMS BY WHICH OTHER BIDDERS WOULD BE BOUND. FURTHER, TO ALLOW ACKNOWLEDGMENT AFTER BIDS ARE OPENED WOULD GIVE THE BIDDER AN OPPORTUNITY TO VARY THE TERMS OF HIS BID AFTER OPENING TO THE PREJUDICE OF OTHER BIDDERS, A PRACTICE WHICH IS PROHIBITED BECAUSE IT WOULD IMPAIR THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM."

FINALLY, SINCE THE AMENDMENT MATERIALLY ALTERED THE IFB BY FIXING THE RISK OF TAX INCREASES UPON BIDDERS AND SINCE, BY FAILING TO ACKNOWLEDGE THE AMENDMENT, YOU WERE ASSUMING A DIFFERENT LIABILITY THAN THE OTHER BIDDER, SUCH FAILURE IS NOT WAIVABLE AS A MINOR DEVIATION UNDER ASPR 2 405(IV)(B). SEE 50 COMP. GEN. (B-169414, JULY 7, 1970).

ACCORDINGLY, YOUR PROTEST IS DENIED.