B-179592, FEB 7, 1974, 53 COMP GEN 569

B-179592: Feb 7, 1974

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CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - ADDENDA ACKNOWLEDGMENT - WAIVER - CRITERIA THE FACT THAT AN AMENDMENT TO AN INVITATION FOR BIDS WHICH EXTENDED THE BID OPENING DATE AND MADE A MATERIAL CHANGE IN THE SPECIFICATIONS WAS NOT FORMALLY ACKNOWLEDGED BY THE LOW BIDDER DID NOT REQUIRE REJECTION OF THE LOW BID WHERE THE BID WAS DATED JUST 2 DAYS BEFORE THE EXTENDED BID OPENING DATE EVIDENCING THE BIDDER WAS AWARE OF THE EXISTENCE OF THE AMENDMENT. SINCE THE LOW BID SHOULD NOT HAVE BEEN REJECTED AS NONRESPONSIVE. IT IS RECOMMENDED THAT IF THE LOW BIDDER IS A RESPONSIBLE FIRM AND THE CONTRACTING AGENCY'S OPERATIONAL CAPABILITY WILL NOT BE DISRUPTED. WAS ISSUED BY THE ARMY MISSILE COMMAND.

B-179592, FEB 7, 1974, 53 COMP GEN 569

CONTRACTS - SPECIFICATIONS - FAILURE TO FURNISH SOMETHING REQUIRED - ADDENDA ACKNOWLEDGMENT - WAIVER - CRITERIA THE FACT THAT AN AMENDMENT TO AN INVITATION FOR BIDS WHICH EXTENDED THE BID OPENING DATE AND MADE A MATERIAL CHANGE IN THE SPECIFICATIONS WAS NOT FORMALLY ACKNOWLEDGED BY THE LOW BIDDER DID NOT REQUIRE REJECTION OF THE LOW BID WHERE THE BID WAS DATED JUST 2 DAYS BEFORE THE EXTENDED BID OPENING DATE EVIDENCING THE BIDDER WAS AWARE OF THE EXISTENCE OF THE AMENDMENT, AND WHERE THE BID DATE CONSTITUTED AN IMPLIED ACKNOWLEDGEMENT OF THE RECEIPT OF THE AMENDMENT, AND SINCE THE LOW BID SHOULD NOT HAVE BEEN REJECTED AS NONRESPONSIVE, IT IS RECOMMENDED THAT IF THE LOW BIDDER IS A RESPONSIBLE FIRM AND THE CONTRACTING AGENCY'S OPERATIONAL CAPABILITY WILL NOT BE DISRUPTED, THE ERRONEOUSLY AWARDED CONTRACT SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND AN AWARD MADE TO THE LOW BIDDER AT ITS BID PRICE.

IN THE MATTER OF INSCOM ELECTRONICS CORPORATION, FEBRUARY 7, 1974:

ON MAY 25, 1973, INVITATION FOR BIDS DAAHO1-73-B-0707 (IFB-0707), WAS ISSUED BY THE ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA. IT WAS AN ACCUMULATIVE QUANTITY REQUIREMENTS SOLICITATION FOR THE PROCUREMENT OF POWER SUPPLIES FOR THE IMPROVED CONTINUOUS WAVE ACQUISITION RADAR (ICWAR) UNITS FOR HAWK MISSILES, WHICH ENABLE THE MISSILES TO DETECT LOW FLYING AIRCRAFT.

ON JUNE 15, 1973, AMENDMENT 0001 TO THE IFB WAS ISSUED EXTENDING THE BID OPENING DATE TO JUNE 29, 1973. ON JUNE 25, 1973, AMENDMENT 0002 WAS ISSUED, EXTENDING THE BID OPENING TO JULY 18, 1973, AND REVISING THE DOCUMENTATION PACKAGE BY REPLACING DRAWING 10182795, REVISION K, WITH DRAWING 10182795, REVISION L. AMENDMENT 0003 WAS ISSUED JULY 10, 1973, FURNISHING PAGE 2 OF THE DRAWING LIST, WHICH HAD BEEN INADVERTENTLY OMITTED FROM THE ORIGINAL BID PACKAGE.

WHEN THE BIDS WERE OPENED ON JULY 18, 1973, IT WAS DETERMINED THAT INSCOM ELECTRONICS CORPORATION'S (INSCOM'S) LOW BID WAS NONRESPONSIVE FOR FAILURE TO ACKNOWLEDGE RECEIPT OF ANY OF THE SOLICITATION AMENDMENTS. THE NEXT LOW BIDDER WAS WOODARD ELECTRIC, INCORPORATED. ON AUGUST 15, 1973, INSCOM FORWARDED SIGNED COPIES OF ALL THREE AMENDMENTS TO THE PROCURING AGENCY, STATING THAT THEY HAD BEEN INADVERTENTLY OMITTED FROM THE BID PACKAGE DUE TO A CLERICAL ERROR. ON AUGUST 23, 1973, INSCOM WAS FORMALLY ADVISED BY LETTER FROM THE CONTRACTING OFFICER THAT ITS BID HAD BEEN DECLARED NONRESPONSIVE FOR FAILURE TO ACKNOWLEDGE RECEIPT OF THE AMENDMENTS, AND THAT THE CONTRACT HAD BEEN AWARDED TO WOODARD.

INSCOM RAISED TWO BASIC GROUNDS FOR PROTEST. FIRST IT MAINTAINED THAT THE FAILURE OF THE PROCURING ACTIVITY TO INDICATE UPON AMENDMENTS 0002 AND 0003 WHETHER OR NOT THOSE AMENDMENTS HAD TO BE SIGNED BY THE BIDDER AND RETURNED CREATED DOUBT AS TO THE NECESSITY FOR ACKNOWLEDGEMENT OF RECEIPT OF THOSE AMENDMENTS. IFB-0707 INCLUDED STANDARD FORM 33A (MARCH 1969 EDITION) AND THE THREE AMENDMENTS TO THE SOLICITATION WERE ISSUED UPON STANDARD FORM 30 (JULY 1966 EDITION). IN OUR DECISION OF JANUARY 17, 1972, REPORTED AT 51 COMP. GEN. 408, 410, WE OBSERVED:

*** BOTH OF THOSE PROVISIONS (PARAGRAPH 4 OF STANDARD FORM 33A AND BLOCK 9 OF STANDARD FORM 30) STATE THAT AN AMENDMENT "MUST" BE ACKNOWLEDGED BY ONE OF THREE METHODS, TWO OF WHICH DO NOT REQUIRE THE BIDDER TO SIGN AND RETURN THE AMENDMENT. THEREFORE, WHILE YOU WERE NOT REQUIRED TO SIGN THE AMENDMENT, ACKNOWLEDGMENT OF IT IN ANOTHER MANNER WAS NECESSARY FOR YOUR BID TO BE RESPONSIVE.

WE AGREE WITH INSCOM THAT THE PROCURING AGENCY SHOULD HAVE CHECKED THE APPLICABLE BOX IN BLOCK 13 OF AMENDMENTS 0002 AND 0003 TO ADVISE BIDDERS WHETHER THEY WERE REQUIRED TO ACKNOWLEDGE RECEIPT OF THE AMENDMENT BY ONE OF THE AVAILABLE METHODS: SIGNING AND RETURNING THE AMENDMENT. HOWEVER, THAT OMISSION DID NOT NEGATE THE GENERAL OBLIGATION OF BIDDERS TO ACKNOWLEDGE RECEIPT OF AMENDMENTS, NOR DID IT PREVENT THE BIDDER FROM MAKING ACKNOWLEDGMENT THROUGH ONE OF THE REMAINING TWO METHODS: (1) NOTATION ON THE REVERSE OF STANDARD FORM 33 OR (2) BY SEPARATE LETTER OR TELEGRAM.

INSCOM'S SECOND CONTENTION IS THAT THE CHANGES MADE BY THE AMENDMENTS WERE TRIVIAL AND, THEREFORE, ITS FAILURE TO ACKNOWLEDGE THEIR RECEIPT SHOULD HAVE BEEN WAIVED AS A MINOR INFORMALITY OR IRREGULARITY. IN THIS CONNECTION, INSCOM ALSO CONTENDS THAT THE ONLY IMPACT OF THE AMENDMENTS WHICH SHOULD BE CONSIDERED IS THAT UPON THE PRICE, WHICH INSCOM ESTIMATES TO BE $.50 PER UNIT, WHEREAS WOODARD'S PRICE IS APPROXIMATELY $425 PER UNIT MORE THAN INSCOM'S. ARMED SERVICES PROCUREMENT REGULATION 2- 405(IV)(B) STATES, IN PERTINENT PART, THAT THE CONTRACTING OFFICER MAY WAIVE THE FAILURE TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT 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 ***

THE LANGUAGE OF THIS SECTION, AND THE DECISIONS OF THIS OFFICE MAKE IT CLEAR THAT PRICE IS NOT THE ONLY CONSIDERATION IN DETERMINING WHETHER THE FAILURE TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT CONSTITUTES A MINOR INFORMALITY OR IRREGULARITY. SEE, E.G., B-162612, OCTOBER 11, 1967.

INSCOM ALLEGES THAT THE ONLY CHANGE OF ANY SIGNIFICANCE WAS THE DELETION BY AMENDMENT 0002 OF A WASHER, FIND NO. 35. IT IS CLEAR FROM THE CONTRACTING OFFICER'S REPORT THAT THIS AMENDMENT NOT ONLY ELIMINATED THE WASHER, BUT ALSO CHANGED THE NUT ON THE SAME STUD TO A SELF-LOCKING TYPE, WHICH IS CLEARLY SHOWN IN THE DRAWING, REVISION L, ACCOMPANYING AMENDMENT 0002. WHILE THESE CHANGES MAY HAVE HAD A TRIVIAL EFFECT ON THE PRICE OF EACH UNIT, THE EFFECT ON THE QUALITY OF THE UNITS WAS NOT CONSIDERED TRIVIAL BY THE CONTRACTING OFFICER FOR THE FOLLOWING REASONS:

*** THE REASONS FOR ISSUING THE AMENDMENT ARE FURTHER EXPLAINED AS FOLLOWS: (1) REVISION L TO APN10182795 WAS MADE TO ASSURE DIODE CR-13 WOULD BE LOCKED TO ITS MOUNTING SURFACE. THE PREVIOUS REVISION USED TWO WASHERS AND A PLAIN NUT TO SECURE THE DIODE. REVISION L REMOVED ONE WASHER AND CHANGED THE NUT TO A SELF-LOCKING TYPE. THIS PREVENTED THE PREVIOUS UNDER FLUSH CONDITION OF THE CR-13 STUD IN THE NUT WHICH WAS CAUSED BY STACK-UP. (2) FAILURE OF THE LOCKING MECHANISM WOULD RESULT IN FAILURE OF THE DIODE, DUE TO THE LOSS OF THE HEAT SINK. THIS IN TURN WOULD CAUSE THE POWER SUPPLY TO BE INOPERATIVE AND, IN TURN, THE ICWAR RADAR. TO PREVENT THE DIODE FROM WORKING LOOSE AS A RESULT OF THE DEFICIENT MOUNTING DESCRIBED IN REVISION K, REVISION L WAS ISSUED.

SINCE INSCOM HAS PRESENTED NO EVIDENCE TO DISPUTE THE IMPORTANCE OF THIS CHANGE IN THE SPECIFICATIONS REGARDING THE QUALITY OF THE ITEM BEING PROCURED, WE CONCLUDE THAT THE EFFECT OF AMENDMENT 0002 WAS NOT TRIVIAL. BECAUSE AMENDMENT 0002 CANNOT BE CONSIDERED TRIVIAL, INSCOM'S BID WOULD BE NONRESPONSIVE IN THE ABSENCE OF AN EXPLICIT OR IMPLICIT ACKNOWLEDGMENT OF RECEIPT OF THAT AMENDMENT. SEE 40 COMP. GEN. 458 (1961).

INSCOM DID NOT FORMALLY OR EXPLICITLY ACKNOWLEDGE RECEIPT OF THE THREE AMENDMENTS. THE FAILURE TO ACKNOWLEDGE AMENDMENT 0001, WHICH MERELY EXTENDED THE BID OPENING DATE, PROPERLY COULD HAVE BEEN WAIVED AS A MINOR INFORMALITY OR IRREGULARITY. 51 COMP. GEN. 408, 410 (1972), SUPRA. SIMILARLY, THE ARMY HAS CHARACTERIZED AMENDMENT 0003, WHICH PROVIDED AN INADVERTENTLY OMITTED PRINTOUT OF DRAWING NUMBERS, AS "ADMINISTRATIVE" IN NATURE. AMENDMENT 0002, HOWEVER, MADE A MATERIAL CHANGE IN THE SPECIFICATIONS AND EXTENDED THE BID OPENING DATE FROM JUNE 29, 1973, TO JULY 18, 1973. AN EXAMINATION OF INSCOM'S BID SHOWS THAT IT IS DATED JULY 16, 1973, JUST 2 DAYS BEFORE THE EXTENDED BID OPENING DATE. A VERY SIMILAR FACT SITUATION WAS CONSIDERED BY OUR OFFICE IN OUR DECISION B- 176462, OCTOBER 20, 1972, IN WHICH WE HELD:

*** THAT THE REFLECTION IN DIAMOND'S BID OF ONE OF THE SALIENT CHANGES EMBODIED BY AMENDMENT 0002 WAS SUFFICIENT TO CONSTITUTE CONSTRUCTIVE ACKNOWLEDGMENT OF RECEIPT OF THAT AMENDMENT, THEREBY BINDING DIAMOND TO PERFORM ALL OF THE OTHER CHANGES ENUMERATED IN THAT AMENDMENT AT THE PRICE SET OUT IN DIAMOND'S BID.

SEE ALSO B-179169, DECEMBER 21, 1973.

IN THE INSTANT CASE, THE DATE UPON INSCOM'S BID CLEARLY REFLECTED THAT FIRM'S KNOWLEDGE OF THE EXISTENCE OF AMENDMENT 0002 AND CONSTITUTED AN IMPLIED ACKNOWLEDGMENT OF THE RECEIPT OF THAT AMENDMENT. IN VIEW THEREOF, AND SINCE THAT AMENDMENT WAS THE ONLY ONE MATERIALLY AFFECTING THE PROCUREMENT, WE CONCLUDE THAT INSCOM'S BID SHOULD NOT HAVE BEEN REJECTED AS NONRESPONSIVE.

WE THEREFORE RECOMMEND, IF IT CAN BE ESTABLISHED THAT INSCOM IS A RESPONSIBLE FIRM AND THAT THE ARMY'S OPERATIONAL CAPABILITY WOULD NOT BE UNDULY DISRUPTED, THAT THE CONTRACT AWARDED TO WOODARD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND THAT A CONTRACT BE AWARDED TO INSCOM AT ITS BID PRICE.