B-174647, FEB 10, 1972, 51 COMP GEN 500

B-174647, FEB 10, 1972, 51 COMP GEN 500

CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - ADDENDA ACKNOWLEDGMENT - WAGE DETERMINATIONS THE GENERAL RULE THAT THE FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT WHICH COULD AFFECT THE PRICE, QUALITY, OR QUANTITY OF THE PROCUREMENT BEING SOLICITED, RENDERS A BID NONRESPONSIVE BECAUSE THE BIDDER WOULD HAVE AN OPTION TO DECIDE AFTER BID OPENING TO BECOME ELIGIBLE FOR AWARD BY FURNISHING EXTRANEOUS EVIDENCE THAT THE ADDENUM HAD BEEN CONSIDERED OR TO AVOID AWARD BY REMAINING SILENT, IS FOR APPLICATION TO THE LOW BID FOR CONSTRUCTION OF A PREFABRICATED METAL BUILDING AS THE UNACKNOWLEDGED AMENDMENT INCORPORATED A WAGE DETERMINATION THAT AFFECTED THE CONTRACT PRICE, NOTWITHSTANDING THAT EXECUTIVE ORDER 11615, DATED AUGUST 15, 1971, CONCERNING STABILIZATION OF PRICES, RENTS, WAGES AND SALARIES WAS IN EFFECT, SINCE THE EXECUTIVE ORDER DOES NOT OBVIATE IMPLEMENTATION OF THE RATES IN THE WAGE DETERMINATION AND, THEREFORE, THE FAILURE TO ACKNOWLEDGE THE AMENDMENT MAY NOT BE WAIVED.

TO GEORGE W. KROG, FEBRUARY 10, 1972:

REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 1, 1971, AND SUBSEQUENT CORRESPONDENCE ON BEHALF OF JOHN R. LAVIS GENERAL CONTRACTOR, INCORPORATED, IN WHICH YOU PROTEST REJECTION OF YOUR CLIENT'S BID AND AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS (IFB) NO. F29651-72-B-0065, ISSUED BY HOLLOMAN AIR FORCE BASE, NEW MEXICO.

THE SOLICITATION, FOR THE CONSTRUCTION OF A PREFABRICATED METAL BUILDING, WAS ISSUED OCTOBER 8, 1971. STANDARD FORM 19-A OF THE IFB INCLUDED THE DAVIS-BACON ACT REQUIREMENT THAT WAGES BE PAID IN ACCORDANCE WITH "WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR WHICH IS ATTACHED HERETO AND MADE A PART HEREOF." HOWEVER, INSTEAD OF A WAGE DETERMINATION, THE FOLLOWING STATEMENT WAS ATTACHED:

WAGE DETERMINATION NOT AVAILABLE FOR THIS PROJECT AT THIS TIME. INVITATION FOR BID WILL BE MODIFIED WHEN WAGE DETERMINATION IS RECEIVED.

AMENDMENT MO-1, INCORPORATING WAGE DETERMINATION NO. AM-3683, WAS SUBSEQUENTLY ISSUED ON OCTOBER 28, 1971. IT STATED THAT FAILURE TO ACKNOWLEDGE THE AMENDMENT PRIOR TO OPENING MIGHT RESULT IN REJECTION OF THE OFFER. AT BID OPENING ON NOVEMBER 8, 1971, IT WAS DISCOVERED THAT YOUR CLIENT HAD FAILED TO ACKNOWLEDGE THE AMENDMENT, AND ALTHOUGH LAVIS WAS THE APPARENT LOW BIDDER, ITS BID WAS REJECTED. YOU THEN PROTESTED, AND AWARD HAS BEEN HELD UP PENDING RESOLUTION OF THIS PROTEST.

THE GENERAL RULE IS THAT THE FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT WHICH COULD AFFECT THE PRICE, QUALITY OR QUANTITY OF THE PROCUREMENT RENDERS THE BID NONRESPONSIVE. 37 COMP. GEN. 785 (1958). THE BASIS FOR THIS RULE IS THAT GENERALLY THE BIDDER WOULD HAVE AN OPTION TO DECIDE AFTER BID OPENING TO BECOME ELIGIBLE FOR AWARD BY FURNISHING EXTRANEOUS EVIDENCE THAT THE ADDENDUM HAD BEEN CONSIDERED OR TO AVOID AWARD BY REMAINING SILENT. SEE 41 COMP. GEN. 550 (1962) AND DECISIONS CITED THEREIN.

YOU URGE, HOWEVER, THAT LAVIS' FAILURE TO ACKNOWLEDGE THE AMENDMENT WAS A MINOR INFORMALITY WHICH MAY BE WAIVED UNDER ARMED SERVICES PROCUREMENT REGULATION 2.405. THAT SECTION ALLOWS FOR CORRECTION OR WAIVER OF MINOR INFORMALITIES AND IRREGULARITIES WHEN IT WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS, AND SPECIFICALLY ALLOWS WAIVER OF A FAILURE TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT IF:

(1) THE BID RECEIVED CLEARLY INDICATES THAT THE BIDDER RECEIVED THE AMENDMENT, SUCH AS WHERE THE AMENDMENT ADDED ANOTHER ITEM TO THE INVITATION FOR BID AND THE BIDDER SUBMITTED A BID THEREON, OR

(2) THE AMENDMENT CLEARLY WOULD HAVE NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, AND NO EFFECT ON QUALITY, QUANTITY, OR DELIVERY, OR THE RELATIVE STANDING OF BIDDERS *** .

THIS POINT WAS CAREFULLY CONSIDERED IN SEVERAL OF OUR PRIOR DECISIONS WHICH INVOLVED SITUATIONS NEARLY IDENTICAL TO THAT IN THE INSTANT CASE. IN B-157832, NOVEMBER 9, 1965, WE STATED:

SINCE THE WAGE RATES PAYABLE UNDER A CONTRACT DIRECTLY AFFECT THE CONTRACT PRICE, THERE CAN BE NO QUESTION THAT THE IFB PROVISION REQUIRING THE PAYMENT OF MINIMUM WAGES TO BE PRESCRIBED BY THE SECRETARY OF LABOR WAS A MATERIAL REQUIREMENT OF THE IFB AS AMENDED. AS STATED PREVIOUSLY, THE REQUIREMENTS OF THE DAVIS-BACON ACT WERE MET WHEN THE AMENDMENT FURNISHING THE MINIMUM WAGE SCHEDULE WAS ISSUED, THE PURPOSE OF THE ACT BEING TO MAKE DEFINITE AND CERTAIN AT THE TIME OF THE CONTRACT AWARD THE CONTRACT PRICE AND THE MINIMUM WAGES TO BE PAID THEREUNDER. 17 COMP. GEN. 471, 473. IN SUCH CIRCUMSTANCES, IT IS OUR VIEW THAT A BIDDER WHO FAILED TO INDICATE BY ACKNOWLEDGMENT OF THE AMENDMENT OR OTHERWISE THAT HE HAD CONSIDERED THE WAGE SCHEDULE COULD NOT, WITHOUT HIS CONSENT, BE REQUIRED TO PAY WAGE RATES WHICH WERE PRESCRIBED THEREIN BUT WHICH WERE NOT SPECIFIED IN THE ORIGINAL IFB, NOTWITHSTANDING THAT HE MIGHT ALREADY BE PAYING THE SAME OR HIGHER WAGE RATES TO HIS EMPLOYEES UNDER AGREEMENTS WITH LABOR UNIONS OR OTHER ARRANGEMENTS. ACCORDINGLY, IN OUR OPINION, THE DEVIATION WAS MATERIAL AND NOT SUBJECT TO WAIVER UNDER THE PROCUREMENT REGULATION. B-138242, JANUARY 2, 1959. FURTHERMORE, TO AFFORD YOU AN OPPORTUNITY AFTER BID OPENING TO BECOME ELIGIBLE FOR AWARD BY AGREEING TO ABIDE BY THE WAGE SCHEDULE WOULD BE UNFAIR TO THE OTHER BIDDERS WHOSE BIDS CONFORMED TO THE REQUIREMENTS OF THE AMENDED IFB AND WOULD BE CONTRARY TO THE PURPOSE OF THE PUBLIC PROCUREMENT STATUTES. B-149315, AUGUST 28, 1962; B-146354, NOVEMBER 27, 1961.

SEE ALSO B-157894, NOVEMBER 30, 1965; B-160257, DECEMBER 15, 1966; B 171062, DECEMBER 17, 1970.

YOU CLAIM THAT THE AMENDMENT DID NOT AFFECT THE APPLICABLE WAGE RATES BECAUSE EXECUTIVE ORDER 11615, DATED AUGUST 15, 1971, CONCERNING STABILIZATION OF PRICES, RENTS, WAGES, AND SALARIES, WAS IN EFFECT AND REFERENCED IN THE IFB. HOWEVER, THE CONTRACTING OFFICER REPORTS THAT WAGE DETERMINATION AM-3683 CONTAINED APPROXIMATELY 17 INCREASES OVER THE PREVIOUS WAGE DETERMINATION DATED MAY 27, 1971. WE DO NOT BELIEVE THAT THE EXISTENCE OF THE EXECUTIVE ORDER NECESSARILY OBVIATES IMPLEMENTATION OF THE RATES IN THE WAGE DETERMINATION. WITHIN THE LIMITATIONS OF THE FREEZE THE CONTRACTOR SHOULD BE OBLIGATED TO PAY NOT LESS THAN THE WAGE RATES SPECIFIED IN THE DETERMINATION. HE COULD BE SO OBLIGATED UNDER HIS BID ONLY IF RECEIPT OF THE AMENDMENT WAS ACKNOWLEDGED PRIOR TO BID OPENING.

IN YOUR LETTER OF NOVEMBER 22, 1971, TO THE CONTRACTING OFFICER, YOU RELY ON OUR DECISION IN 40 COMP. GEN. 48 (1960). THAT CASE INVOLVED AN ADDENDUM WHICH CONTAINED WAGE RATES AND WHICH WAS PHYSICALLY ATTACHED TO THE SPECIFICATIONS PRIOR TO ISSUANCE OF THE IFB AND DELIVERED TO THE BIDDER AS A PART OF THE TOTAL BID PACKAGE. WE CONCLUDED THAT THE BIDDER MUST HAVE HAD ACTUAL KNOWLEDGE OF THE ADDENDUM AND THAT BY SUBMITTING A BID ON THE BASIS OF THE BIDDING DOCUMENTS WHICH INCLUDED THE ADDENDUM, HE HAD AGREED, IN EFFECT, TO PAY THE MINIMUM WAGES SET FORTH IN THE ADDENDUM. WE HELD THAT IN THOSE CIRCUMSTANCES THE BIDDER HAD MANIFESTED HIS ASSENT TO THE TERMS OF THE ADDENDUM PRIOR TO BID OPENING AND THAT THE FAILURE TO OTHERWISE FORMALLY ACKNOWLEDGE THE ADDENDUM COULD BE WAIVED. THAT DECISION IS NOT APPLICABLE HERE, SINCE THE WAGE AMENDMENT WAS ISSUED SEPARATELY AT A LATER DATE AND YOUR CLIENT DID NOT IN ANY WAY MANIFEST ASSENT TO BE BOUND THEREBY PRIOR TO BID OPENING. SEE B-160257, DECEMBER 15, 1966.

AS WE STATED IN B-171062, DECEMBER 17, 1970:

*** THE CONTROLLING CONSIDERATION IN THIS AND SIMILAR CASES IS THAT WHERE A BIDDER FAILS TO ACKNOWLEDGE AN AMENDMENT OF SUBSTANCE, HIS BID IS NONRESPONSIVE BECAUSE ACCEPTANCE OF THE BID IN THE FORM IT EXISTS AT THE TIME OF OPENING WOULD NOT RESULT IN A CONTRACT CONTAINING A STATEMENT OF THE MINIMUM WAGE RATES TO BE PAID AS REQUIRED BY THE DAVIS BACON ACT, 40 U.S.C. 276A. SEE B-168581, MAY 8, 1970.

FOR THE FOREGOING REASONS, WE MUST CONCUR WITH THE CONTRACTING OFFICER'S DECISION TO REJECT YOUR CLIENT'S BID AND YOUR PROTEST IS ACCORDINGLY DENIED.