B-174298, MAR 2, 1972, 51 COMP GEN 543

B-174298: Mar 2, 1972

Additional Materials:

Contact:

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

 

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

A PRICE THE BIDDER ALLEGES WAS INCLUDED IN THE BASIC BID PRICE. IS A NONRESPONSIVE BID THAT MAY NOT BE CONSIDERED FOR AN AWARD. FOR ALTHOUGH THE ENVIRONMENTAL WORK COULD HAVE BEEN TREATED AS AN INHERENT PART OF THE JOB. IT WAS REGARDED AS MATERIAL AND LISTED AS A SEPARATE ITEM CALLING FOR A SEPARATE PRICE AND. TO DO SO WOULD IGNORE THE RULE THAT WHERE THERE IS ANY SUBSTANTIAL QUESTION AS TO WHETHER THE BIDDER UPON AWARD COULD BE REQUIRED TO PERFORM ALL OF THE WORK CALLED FOR IF HE CHOSE NOT TO. ENVIRONMENT PROTECTION SUM JOB TOTAL NOTES: (A) ALL QUANTITES SHOWN ON THE BIDDING SCHEDULE ARE ESTIMATED QUANTITES EXCEPT WHEN THE UNIT IS SHOWN AS "JOB". BIDS WERE OPENED ON OCTOBER 7. THE APPARENT LOW BIDDER WAS WAYNE B.

B-174298, MAR 2, 1972, 51 COMP GEN 543

BIDS - OMISSIONS - FAILURE TO BID ON ALL ITEMS THE LOW BID THAT OMITTED THE PRICE OF THE "ENVIRONMENTAL PROTECTION" ITEM CONTAINED IN AN INVITATION FOR BIDS TO REPAIR A PORTION OF THE MISSISSIPPI RIVER BANKS, A PRICE THE BIDDER ALLEGES WAS INCLUDED IN THE BASIC BID PRICE, IS A NONRESPONSIVE BID THAT MAY NOT BE CONSIDERED FOR AN AWARD, FOR ALTHOUGH THE ENVIRONMENTAL WORK COULD HAVE BEEN TREATED AS AN INHERENT PART OF THE JOB, IT WAS REGARDED AS MATERIAL AND LISTED AS A SEPARATE ITEM CALLING FOR A SEPARATE PRICE AND, THEREFORE, THE OMISSION SHOULD NOT BE WAIVED AS A MINOR INFORMALITY. TO DO SO WOULD IGNORE THE RULE THAT WHERE THERE IS ANY SUBSTANTIAL QUESTION AS TO WHETHER THE BIDDER UPON AWARD COULD BE REQUIRED TO PERFORM ALL OF THE WORK CALLED FOR IF HE CHOSE NOT TO, THE INTEGRITY OF THE COMPETITIVE BID SYSTEM REQUIRES THAT THE BID BE REJECTED AS, AT THE LEAST, AMBIGUOUS UNLESS THE BID OTHERWISE AFFIRMATIVELY INDICATES THAT THE BIDDER CONTEMPLATED PERFORMANCE.

TO THE SECRETARY OF THE ARMY, MARCH 2, 1972:

YOUR LETTER OF NOVEMBER 17, 1971, REFERENCE DAEN-GCC, WITH ATTACHMENTS, CONCERNS THE PROTEST BY MASSMAN CONSTRUCTION COMPANY, AGAINST THE PROPOSED AWARD OF A CONSTRUCTION CONTRACT TO ANOTHER CONCERN UNDER INVITATION FOR BIDS NO. DACW 43-72-B-0004, ISSUED BY THE UNITED STATES ARMY ENGINEER DISTRICT, ST. LOUIS, FOR REPAIRING THE BANKS OF A CERTAIN PORTION OF THE MISSISSIPPI RIVER.

THE BIDDING SCHEDULE AND PERTINENT PORTION OF THE NOTES APPEAR AS FOLLOWS ON PAGE BS.1 OF AMENDMENT NO. 0002:

ITEM UNIT ESTIMATED

NO. DESCRIPTION QUANTITY UNIT PRICE AMOUNT

1. STONE:

(A) MOBILIZATION AND SUM JOB

DEMOBILIZATION.

(B) STONE; DIKE (QUARRY-RUN) 75,000 TON

(C) STONE; BANK PAVING 20,000 TON

2. ENVIRONMENT PROTECTION SUM JOB

TOTAL

NOTES: (A) ALL QUANTITES SHOWN ON THE BIDDING SCHEDULE ARE ESTIMATED QUANTITES EXCEPT WHEN THE UNIT IS SHOWN AS "JOB".

(E) ITEM NO. 1 HAS BEEN SUBDIVIDED INTO THREE SUB ITEMS. A BID FOR THE WORK SHALL INCLUDE A BID FOR EACH OF THESE SUB ITEMS. BIDDERS SHOULD REFER TO PARAGRAPH SP-16 OF THE SPECIAL PROVISIONS BEFORE PREPARING THEIR BIDS FOR THIS ITEM.

BIDS WERE OPENED ON OCTOBER 7, 1971, AND THE APPARENT LOW BIDDER WAS WAYNE B. SMITH, INCORPORATED (SMITH), WITH A TOTAL BID PRICE OF $500,000. MASSMAN CONSTRUCTION COMPANY'S TOTAL BID PRICE OF $502,852 WAS SECOND LOW.

THE BIDDING SCHEDULE IN SMITH'S BID WAS FILLED IN AS FOLLOWS:

1. STONE:

(A) MOBILIZATION AND SUM JOB $ 15,000.00

DEMOBILIZATION (B) STONE; DIKE (QUARRY-RUN) 75,000

TON $5.00 375,000.00 (C) STONE; BANK PAVING

20,000 TON 5.50 110,000.00

2. ENVIRONMENT PROTECTION SUM JOB

TOTAL $500,000.00

AFTER EXAMINING THE BIDS, THE PROCURING ACTIVITY DECIDED TO OBTAIN VERIFICATION FROM SMITH OF ITS INTENDED PRICE FOR ITEM 2. ON OCTOBER 8, 1971, THE PROCURING ACTIVITY WAS ORALLY ADVISED BY SMITH THAT THE PRICE FOR ITEM 2 WAS INCLUDED IN ITEM 1. THIS WAS CONFIRMED BY SMITH'S LETTER OF OCTOBER 8, 1971, RECEIVED BY THE PROCURING ACTIVITY ON OCTOBER 12, 1971.

MASSMAN INITIALLY PROTESTED BY TELEGRAM DATED OCTOBER 7 TO THE PROCURING ACTIVITY; ON OCTOBER 8 MASSMAN FILED ITS TELEGRAM OF PROTEST TO OUR OFFICE. MASSMAN CONTENDED THAT THE OMISSION OF A PRICE FOR ITEM 2 RENDERS SMITH'S BID NONRESPONSIVE. AWARD IS BEING WITHHELD PENDING OUR RESOLUTION OF THE PROTEST.

SECTION 4 OF THE SPECIFICATIONS, THE ENVIRONMENT PROTECTION SECTION, GENERALLY PROVIDES THAT THE CONTRACTOR SHALL DO ALL WORK REQUIRED FOR PREVENTION OF ENVIRONMENTAL POLLUTION WHICH MAY OCCUR "DURING AND AS THE RESULT OF" CONTRACT PERFORMANCE. THE CONTRACTOR MUST SUBMIT WRITTEN PROPOSALS FOR POLLUTION CONTROL WITHIN 10 DAYS AFTER RECEIPT OF NOTICE TO PROCEED AND ALSO MEET WITH CONTRACTING REPRESENTATIVES TO DEVELOP MUTUAL UNDERSTANDINGS WITH RESPECT TO THE POLLUTION CONTROL PROGRAM. SOME OF THE SPECIFIC REQUIREMENTS ARE RELATED TO PREVENTION OF LANDSCAPE DEFACEMENT; RESTRICTIONS ON CONSTRUCTING TEMPORARY ROADS AND EMBANKMENTS; POST- CONSTRUCTION CLEANUP AND TAKING APPROPRIATE MEASURES TO AVOID POLLUTION OF WATER RESOURCES. THE CONTRACTOR AND SUBCONTRACTORS ARE REQUIRED TO COMPLY WITH APPLICABLE FEDERAL, STATE AND LOCAL LAWS CONCERNING ENVIRONMENTAL POLLUTION. IF THE CONTRACTING OFFICER GIVES WRITTEN NOTICE OF NONCOMPLIANCE WITH APPLICABLE LAW AND REGULATIONS, THE CONTRACTOR IS REQUIRED TO TAKE CORRECTIVE ACTION. FAILURE TO PROMPTLY TAKE CORRECTIVE ACTION ENTITLES THE CONTRACTING OFFICER TO STOP ALL OR A PORTION OF THE WORK, IN WHICH EVENT THE CONTRACTOR AGREES NOT TO MAKE ANY CLAIMS FOR EXCESS COSTS OR TIME EXTENSIONS RESULTING FROM ISSUANCE OF THE STOP WORK ORDER.

PARAGRAPH 9 OF THE PROVISIONS TO BE READ IN CONJUNCTION WITH THE INSTRUCTIONS TO BIDDERS (STANDARD FORM 22), WHICH IS A PART OF THE INVITATION, DELETED PARAGRAPH 10(C) OF STANDARD FORM 22 AND SUBSTITUTED THE PROVISION THAT: "AWARD WILL BE MADE AS A WHOLE TO ONE BIDDER."

ALSO PERTINENT IS PARAGRAPH 5(B) OF STANDARD FORM 22, INSTRUCTIONS TO BIDDERS, WHICH PROVIDES AS FOLLOWS:

(B) THE BID FORM MAY PROVIDE FOR SUBMISSION OF A PRICE OR PRICES FOR ONE OR MORE ITEMS, WHICH MAY BE LUMP SUM BIDS, ALTERNATE PRICES, SCHEDULED ITEMS RESULTING IN A BID ON A UNIT OF CONSTRUCTION OR COMBINATION THEREOF, ETC. WHERE THE BID FORM EXPLICITLY REQUIRES THAT THE BIDDER BID ON ALL ITEMS, FAILURE TO DO SO WILL DISQUALIFY THE BID. WHEN SUBMISSION OF A PRICE ON ALL ITEMS IS NOT REQUIRED, BIDDERS SHOULD INSERT THE WORDS "NO BID" IN THE SPACE PROVIDED FOR ANY ITEM ON WHICH NO PRICE IS SUBMITTED.

ON THE FIRST PAGE OF STANDARD FORM 21 THERE IS A SECTION ENTITLED "DESCRIPTION." UNDER SUBPARAGRAPH (A) THE BIDDER WAS TO INDICATE THE WORK TO BE PERFORMED BY HIS OWN ORGANIZATION AND SMITH FILLED IN "ALL WORK." UNDER SUBPARAGRAPH (B) THE BIDDER WAS TO INDICATE THE PERCENT AND THE ESTIMATED COST OF THE WORK HE WOULD DO HIMSELF AND SMITH FILLED IN "100 PERCENT" AND "$500,000."

THE CONTRACTING OFFICER IN A REPORT OF OCTOBER 29, 1971, RECOMMENDED THAT SMITH'S BID BE CONSIDERED NONRESPONSIVE SINCE IT COULD NOT BE ASCERTAINED FROM THE BID DOCUMENTS THAT HE INTENDED TO BE BOUND TO PERFORM ITEM NO. 2 AT HIS BID PRICE. THE GENERAL COUNSEL OF THE CORPS OF ENGINEERS TAKES A CONTRARY VIEW ON THE GROUNDS THAT SMITH COULD NOT SIGN THE CONTRACT AND THEN ALLEGE THAT HE WAS NOT OBLIGATED TO PERFORM THE TOTAL JOB INCLUDING THE ENVIRONMENTAL PROTECTION MEASURES AT THE TOTAL PRICE BID.

IT IS URGED BY COUNSEL FOR SMITH THAT THE FAILURE TO INCLUDE A SEPARATE PRICE ON A "MINOR INDIVIDUAL LUMP SUM ITEM" SHOULD BE WAIVED AS A MINOR INFORMALITY. IN THIS CONNECTION COUNSEL NOTES THAT THE WORK CONCERNS REPAIRS TO LEVEES BY PLACING STONE FROM A BARGE; THAT THERE ARE NO TREES TO CUT AND BURN, HAUL ROADS TO BUILD OR OTHER MAJOR ITEMS FALLING WITHIN THE ENVIRONMENTAL PROTECTION PROVISIONS OF THE SPECIFICATIONS WHICH WOULD BE REFLECTED IN ITEM NO. 2.

THE WORK COVERED BY ITEM NO. 2 IS DESCRIBED IN SECTION 4 OF THE SPECIFICATIONS. THE DESCRIPTION COVERS NEARLY FOUR PAGES OF INSTRUCTIONS; TWO PARAGRAPHS RELATE TO KEEPING WATER FREE OF CONTAMINATION AND DEBRIS. WHILE IT IS TRUE THAT THE CONTRACTOR IS REQUIRED TO COMPLY WITH FEDERAL, STATE AND LOCAL ANTI-POLLUTION LAWS, WE ARE NOT IN A POSITION TO DETERMINE THAT COMPLIANCE WITH THOSE LAWS WOULD AUTOMATICALLY CONSTITUTE COMPLIANCE WITH THE ENVIRONMENTAL PROTECTION PROVISIONS OF THE SPECIFICATIONS.

IN TERMS OF THE AMOUNTS OTHERWISE BID FOR THIS ITEM AND THE EMPHASIS PLACED ON IT IN THE SPECIFICATIONS, WE CANNOT DISMISS THE FAILURE OF SMITH TO BID ON THE ITEM AS A MINOR INFORMALITY. WE HAVE INDICATED THAT A REQUIREMENT IMPORTANT ENOUGH TO SPECIFY IN EXTENSIVE AND FINITE DETAIL SHOULD BE REGARDED AS MATERIAL. 40 COMP. GEN. 458, 460 (1961). THAT STANDARD APPEARS TO BE APPLICABLE HERE ALSO.

IT HAS ALSO BEEN URGED THAT THE ENVIRONMENTAL PROTECTION WORK IS AN INHERENT PART OF THE JOB AND NEED NOT BE SET OUT AS A SEPARATE ITEM. CERTAINLY, THE WORK COULD BE PERFORMED WITHOUT ENVIRONMENTAL PROTECTION. INDEED, ONE OF THE PROBLEMS WITH OUR ENVIRONMENT IS THAT WORK OF THIS GENERAL TYPE WAS PERFORMED IN THE PAST WITHOUT SUCH PROTECTION. WE AGREE THAT ITEM NO. 2 RELATES TO THE MANNER IN WHICH THE WORK RESULTING IN AN END PRODUCT WILL BE PERFORMED RATHER THAN THE NATURE OF THE END PRODUCT TO BE PROVIDED. WE ALSO AGREE THAT THE SPECIFICATIONS COULD HAVE BEEN WRITTEN TO INCORPORATE THE ENVIRONMENTAL PROTECTION WORK IN THE PRICE OF THE OTHER ITEMS. IN FACT, WE NOTE THAT SECTIONS 42 AND 47 OF THE GENERAL PROVISIONS MAY BE SAID TO FALL PRECISELY INTO THE CATEGORY OF ENVIRONMENTAL PROTECTION WORK TO BE PERFORMED BY THE CONTRACTOR AS PART OF THE JOB WITHOUT AN INDIVIDUAL BID ITEM. HOWEVER, THE TERMS OF THE IFB WERE NOT SO FASHIONED. ENVIRONMENTAL PROTECTION WAS LISTED AS A SEPARATE ITEM CALLING FOR A SEPARATE PRICE WHICH SMITH FAILED TO INCLUDE IN HIS BID. IN THESE CIRCUMSTANCES SMITH COULD WELL ARGUE THAT AWARD TO HIM UNDER HIS BID WOULD NOT BIND HIM TO COMPLY WITH SECTION 4 OF THE SPECIFICATIONS. FOR THE FOREGOING REASONS WE BELIEVE THAT THE FAILURE TO INCLUDE A PRICE FOR ITEM NO. 2 MAY NOT BE WAIVED AS A MINOR INFORMALITY.

WHERE THERE IS ANY SUBSTANTIAL QUESTION AS TO WHETHER THE BIDDER UPON AWARD COULD BE REQUIRED TO PERFORM ALL OF THE WORK CALLED FOR IF HE CHOSE NOT TO, THE INTEGRITY OF THE COMPETITIVE BID SYSTEM REQUIRES THAT THE BID BE REJECTED AS, AT THE LEAST, AMBIGUOUS UNLESS THE BID OTHERWISE AFFIRMATIVELY INDICATES THAT THE BIDDER CONTEMPLATED PERFORMANCE OF THE WORK OR THE ITEM IS NOT TO BE AWARDED. B-173243, JULY 12, 1971; 41 COMP. GEN. 412 (1961); AND 38 COMP. GEN. 372 (1958). IT IS TRUE THAT EACH OF THE CITED CASES INVOLVED AN ITEM OR ITEMS ADDED BY AMENDMENT TO THE IFB. HOWEVER, IN EACH CASE RECEIPT OF THE AMENDMENT HAD BEEN PROPERLY ACKNOWLEDGED BY THE BIDDER AND THE ONLY QUESTION REVOLVED AROUND THE CONTENTION THAT THE PRICE FOR AN ANCILLARY ITEM ADDED BY AMENDMENT HAD BEEN INCLUDED IN THE PRICE OF THE MAIN ITEM. THEREFORE, WE BELIEVE THAT THE CITED CASES ARE DIRECTLY IN POINT.

THIS RULE HAS A SUBSTANTIAL BASIS AND IS NOT A MERE TECHNICALITY. HOLD OTHERWISE WOULD GIVE A BIDDER AN OPTION AFTER ALL BIDS HAD BEEN EXPOSED TO ARGUE, WHEN BIDS WERE CLOSE IN PRICE, THAT THE PRICE FOR AN ITEM HAD ALREADY BEEN INCLUDED IN ANOTHER ITEM. ON THE OTHER HAND, IF THE DIFFERENCE BETWEEN BID PRICES WAS SUBSTANTIAL, THE BIDDER COULD URGE THAT THE ITEM HAD BEEN OMITTED AND THE PRICE SHOULD BE INCREASED TO INCLUDE THAT ITEM. CF. 41 COMP. GEN. 721 (1962). IN OUR JUDGMENT, MAINTENANCE OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM REQUIRES ADHERENCE TO THE RULE EVEN IF THE APPLICATION APPEARS TO REQUIRE A HARSH RESULT IN A GIVEN CASE.

IT IS URGED ON SMITH'S BEHALF THAT THE INCLUSION UNDER PARAGRAPHS (A) AND (B) OF THE "DESCRIPTION" SECTION ON STANDARD FORM 21 OF THE COMMITMENTS TO FURNISH ALL OF THE WORK AT ITS STATED PRICE OF $500,000 CONSTITUTED AN AFFIRMATIVE INDICATION OF ITS INTENTION TO PERFORM THE WORK CALLED FOR UNDER ITEM NO. 2 WITHIN THE ABOVE-CITED RULE. THE PURPOSE OF THE PROVISION WAS TO OBTAIN INFORMATION ON THE EXTENT TO WHICH THE BIDDER PROPOSED TO SUBCONTRACT. IN OUR OPINION, THE LANGUAGE CAN REASONABLY BE CONSTRUED TO MEAN ONLY THAT SMITH INTENDED TO PERFORM WITH HIS OWN FORCES ALL OF THE WORK BID ON; WE FIND NOTHING WHICH COULD BE CONSTRUED AS AN AFFIRMATIVE INDICATION OF INTENT TO BE BOUND TO PERFORM ITEM NO. 2.

SMITH'S WORKPAPER AND SMITH'S AFFIDAVIT FURNISHED BY ITS COUNSEL CANNOT BE CONSIDERED TO ESTABLISH SMITH'S OBLIGATION SINCE THESE ARE EXTRANEOUS TO THE BID. SEE 45 COMP. GEN. 221 (1965); B-166603, MAY 16, 1969, AND B- 173823, SEPTEMBER 2, 1971.

THE CASES CITED IN SMITH'S BEHALF ARE B-173823, SUPRA; B-169530, JULY 27, 1970; B-166603, SUPRA; B-161012, JUNE 13, 1967; B-157494, SEPTEMBER 22, 1965, AND B-151276, MAY 28, 1963. ALL OF THESE CASES ARE DISTINGUISHABLE. IN B-173823 AND B-166603, SUPRA, THE TOTAL PRICE EXCEEDED THE SUM OF THE ITEMS BID ON AND IT WAS CLEARLY ESTABLISHED THAT THE EXCESS AMOUNT INSERTED FOR THE TOTAL WAS INTENDED TO COVER THE ITEM FOR WHICH THE PRICE HAD BEEN OMITTED. IN THIS CASE THE SUM OF THE SUB- ITEMS UNDER ITEM 1 EXACTLY EQUALS THE TOTAL OF SMITH'S BID. IN B 173823, SUPRA, THE BIDDER FURTHER ESTABLISHED ITS OBLIGATION BY INSERTING NEXT TO THE TOTAL THAT THE BID WAS BASED ON AWARD OF ALL ITEMS. IN B-161012, SUPRA, THE BIDDER'S INTENTION TO FURNISH THE DATA ITEM FOR WHICH NO PRICE HAD BEEN QUOTED WAS AFFIRMATIVELY DEMONSTRATED BY THE BIDDER'S DELIVERY SCHEDULE. IN B-169530, SUPRA, THE BIDDER'S OBLIGATION FOR THE ITEMS ON WHICH PRICE HAD BEEN OMITTED WAS ESTABLISHED THROUGH A MODIFICATION BY THE BIDDER PRIOR TO BID OPENING. IN B-157494, SUPRA, THE BIDDER MADE AN AFFIRMATIVE STATEMENT ON THE BID THAT THE TOTAL INCLUDED ALL THE SUB-ITEMS FOR WHICH A PRICE HAD BEEN OMITTED. IN B-151276, SUPRA, THE BID SPECIFICALLY ADVISED THAT AWARD WOULD BE MADE ON THE BASIS OF AN ENTIRE SCHEDULE; THEREFORE, BY INSERTING A TOTAL PRICE FOR THE SCHEDULE THE BIDDER WAS OBLIGATED TO FURNISH ALL THE ITEMS WITHIN THE SCHEDULE EVEN THOUGH SEPARATE PRICES WERE NOT QUOTED FOR THEM. ALSO, THAT CASE DID NOT INVOLVE A SITUATION WHERE THE TOTAL PRICE WAS EXACTLY EQUAL TO THE SUM OF THE UNITS FOR WHICH PRICES WERE SHOWN.

FOR THESE REASONS WE CONCLUDE THAT SMITH'S BID IS NONRESPONSIVE.