B-183173, MAR 11, 1975

B-183173, MAR 11, 1975

LOW BID THAT DOES NOT CONTAIN CERTIFICATION OF COMPLIANCE WITH AFFIRMATIVE ACTION PROVISIONS OF SOLICITATION MAY NOT BE CONSIDERED FOR AWARD, SINCE COMMITMENT TO SUCH PROVISIONS IS A MATERIAL REQUIREMENT WHICH MAY NOT BE WAIVED, AND TO PERMIT A BIDDER, AFTER BID OPENING, TO FURNISH CERTIFICATION WOULD BE CONTRARY TO PRINCIPLES OF COMPETITIVE BIDDING.

VETERANS ADMINISTRATION RE WELCH CONSTRUCTION, INC.:

THE VETERANS ADMINISTRATION (VA) HAS REQUESTED OUR ADVICE AS TO THE RESPONSIVENESS OF BIDS WHICH DID NOT INCLUDE A CERTIFICATE OF COMPLIANCE WITH THE SANTA CLARA (CALIFORNIA) PLAN AS REQUIRED BY THE AFFIRMATIVE ACTION-EQUAL OPPORTUNITY PROVISIONS OF A SOLICITATION FOR EXPANSION OF THE OUTPATIENT CLINIC AT THE VA HOSPITAL IN PALO ALTO, CALIFORNIA.

IT IS REPORTED THAT 12 BIDS WERE RECEIVED IN RESPONSE TO INVITATION FOR BIDS (IFB) NO. 640-016, BUT THAT 7 OF THEM, INCLUDING THE 4 LOWEST, DID NOT CONTAIN THE REQUIRED CERTIFICATION. VA SUGGESTS THAT THE LOW BID MAY BE ACCEPTED FOR THE FOLLOWING REASONS:

1. "7 OF THE 12 BIDDERS FAILED TO SUBMIT THE CERTIFICATION, DEMONSTRATING THAT THERE WAS NO FRAUD OR FAILURE TO SECURE FAIR PRICES."

2. ALLOWING THE 4 LOWEST BIDDERS TO SUBMIT THE CERTIFICATION AFTER BID OPENING WOULD "NOT PREJUDICE OR WORK AN INJUSTICE TO THE BIDDERS WHOSE HIGHER PRICE TOOK THEM OUT OF THE ZONE OF CONTENTION, NOR WILL IT AFFECT THESE BIDDERS' RIGHT TO AN EQUAL OPPORTUNITY TO COMPETE."

3. "*** SINCE THE LOWEST BIDDER HAS NOW SUBMITTED HIS CERTIFICATION (6 DAYS AFTER BID OPENING), HE WILL NOT HAVE AN OPPORTUNITY TO REJECT THE CONTRACT ***."

4. IT WOULD BE IN THE BEST INTERESTS OF THE UNITED STATES TO WAIVE THE CERTIFICATION REQUIREMENT BECAUSE THERE IS A DIFFERENCE OF $145,475 BETWEEN THE LOW BID AND FIFTH LOWEST BID.

AFTER SUBMISSION OF VA'S REQUEST, THE SIX LOWEST BIDDERS WERE GIVEN AN OPPORTUNITY TO COMMENT. COUNSEL FOR THE LOW BIDDER, WELCH CONSTRUCTION, INC., RESPONDED WITH THE FOLLOWING ASSERTIONS:

1. THE IFB DID NOT REQUIRE SUBMISSION OF THE CERTIFICATION WITH THE BID.

2. IF THE IFB DID SO REQUIRE, THEN THE FAILURE TO SUBMIT THE CERTIFICATION SHOULD BE WAIVED AS A MINOR INFORMALITY, ESPECIALLY SINCE THE IFB INDICATES ONLY THAT BIDS MAY BE REJECTED FOR FAILURE TO COMPLY WITH BID CONDITIONS.

3. BIDDERS DID NOT SUBMIT THE CERTIFICATION BECAUSE, WHILE IT WAS INCLUDED IN THE IFB, IT WAS NOT CONTAINED IN A SEPARATELY FURNISHED "BID PACKET".

FOR THE REASONS INDICATED BELOW, WE BELIEVE THAT THE BIDS SUBMITTED WITHOUT THE CERTIFICATION ARE NONRESPONSIVE AND CANNOT BE ACCEPTED.

THE SOLICITATION "CAUTIONED" BIDDERS THAT THEIR BIDS "MAY BE REJECTED UNLESS THEY COMPLY IN EVERY RESPECT WITH THE APPLICABLE REQUIREMENTS OF SECTION BD, BID CONDITIONS - AFFIRMATIVE ACTION REQUIREMENTS - EQUAL EMPLOYMENT OPPORTUNITY." THE BID CONDITIONS PROVIDED THAT "TO BE ELIGIBLE FOR AWARD OF A CONTRACT *** A BIDDER *** MUST EXECUTE THE CERTIFICATION ***," AND THAT:

"A BIDDER WILL NOT BE ELIGIBLE FOR AWARD OF A CONTRACT UNDER THIS INVITATION FOR BIDS UNLESS SUCH BIDDER HAS SUBMITTED AS A PART OF HIS BID THE FOLLOWING CERTIFICATION, WHICH WILL BE DEEMED A PART OF THE RESULTING CONTRACT."

IT WAS FURTHER PROVIDED THAT:

"THE CERTIFICATION REQUIRED TO BE MADE BY THE BIDDERS PURSUANT TO THESE BID CONDITIONS IS MATERIAL, AND WILL GOVERN THE BIDDERS' PERFORMANCE ON THE PROJECT AND WILL BE MADE A PART OF ITS BID. FAILURE TO SUBMIT THE CERTIFICATION WILL RENDER THE BID NONRESPONSIVE."

WE DO NOT AGREE WITH COUNSEL FOR WELCH THAT THE IFB DID NOT CLEARLY REQUIRE THE SUBMISSION OF THE CERTIFICATION WITH THE BIDS. WE HAVE CONSTRUED SIMILAR OR IDENTICAL LANGUAGE IN OTHER SOLICITATIONS AS UNAMBIGUOUSLY REQUIRING THAT BIDDERS COMMIT THEMSELVES TO AFFIRMATIVE ACTION REQUIREMENTS PRIOR TO BID OPENING, AND THAT BIDS NOT CONTAINING SUCH A COMMITMENT BE REJECTED AS NONRESPONSIVE. 50 COMP. GEN. 844 (1971); 52 ID. 874 (1973); B-176487, SEPTEMBER 28, 1972; MATTER OF LOCASCIO ELECTRIC CO., B-181746, DECEMBER 13, 1974. WE HAVE FURTHER HELD THAT SINCE AFFIRMATIVE ACTION REQUIREMENTS ARE MATERIAL, A BIDDER WHO FAILS TO MAKE THE REQUISITE "PREBID OPENING COMMITMENT MAY NOT HAVE THE DEVIATION WAIVED, NOR MAY THE BIDDER BE PERMITTED TO CORRECT THE DEFICIENCY AFTER BID OPENING SO AS TO RENDER THE BID ELIGIBLE FOR CONSIDERATION FOR AWARD." MATTER OF MANN CONSTRUCTION COMPANY; SARGENT CONSTRUCTION COMPANY, B-180324, JANUARY 16, 1974. THE COURTS HAVE SIMILARLY RECOGNIZED THAT A FAILURE TO COMPLY WITH AN AFFIRMATIVE ACTION REQUIREMENT MAY NOT BE TREATED AS A MINOR INFORMALITY. SEE NORTHEAST CONSTRUCTION CO. V. ROMNEY, 485 F.2D 752 (D. C. CIR. 1972); ROSSETTI CONTRACTING CO., INC. V. BRENNAN, NOS. 74-1850, 74-1851 AND 74 1853 (7TH CIR. FILED JANUARY 9, 1975).

WITH REGARD TO THE ASSERTION THAT THE IFB DOES NOT REQUIRE REJECTION OF THE WELCH BID BECAUSE OF THE USE OF THE PHRASE "MAY BE REJECTED," WE HAVE HELD THAT A BID MAY NOT BE REJECTED WHEN THE BIDDER, ALTHOUGH NOT COMMITTING ITSELF TO AFFIRMATIVE ACTION REQUIREMENTS IN THE MANNER SPECIFIED BY THE SOLICITATION, DID CLEARLY COMMIT ITSELF, PRIOR TO BID OPENING, IN SOME OTHER WAY TO THOSE REQUIREMENTS. SEE MATTER OF BARTLEY, 53 COMP. GEN. 451 (1974) AND CASES CITED THEREIN. THUS, A FAILURE TO COMPLY WITH EACH SPECIFIC PROCEDURAL REQUIREMENT OF THE BID CONDITIONS NEED NOT RESULT IN BID REJECTION SO LONG AS THE MATERIAL COMMITMENT TO THE AFFIRMATIVE ACTION PROVISIONS IS PRESENT. HERE, OF COURSE, THERE IS NO SUCH COMMITMENT EVIDENT IN THE WELCH BID, AND THEREFORE THE BID MUST BE REJECTED.

THE OTHER POINT RELIED ON BY WELCH CONCERNS THE "BID PACKET." COUNSEL FOR WELCH STATES THAT BIDDERS RECEIVED TWO SETS OF DOCUMENTS FROM THE PROJECT ARCHITECT. THE FIRST SET INCLUDED BID FORMS, INSTRUCTIONS, SPECIFICATIONS, AND THE BID CONDITIONS WHICH SET FORTH THE AFFIRMATIVE ACTION REQUIREMENTS. THE SECOND SET, RECEIVED SEVERAL DAYS AFTER RECEIPT OF THE FIRST SET, WAS A "BID PACKET" CONSISTING OF BID FORMS, A REPRESENTATIONS AND CERTIFICATIONS FORM, AND A BID BOND. IT WAS THESE "BID PACKET" DOCUMENTS WHICH WERE EXECUTED AND SUBMITTED BY WELCH.

IT APPEARS THAT THE ABSENCE FROM THE "BID PACKET" OF THE AFFIRMATIVE ACTION PROVISIONS AND CERTIFICATION MAY WELL HAVE CONTRIBUTED TO THE FAILURE OF SEVERAL BIDDERS TO RETURN THE CERTIFICATION. NEVERTHELESS, THE REQUIREMENT FOR SUBMISSION OF THE CERTIFICATION WAS CLEARLY SPELLED OUT IN THE IFB AND CANNOT BE WAIVED MERELY BECAUSE SOME OF THE BIDDERS CHOSE TO RELY SOLELY ON WHAT WAS IN THE SUBSEQUENTLY FURNISHED "BID PACKET". SEE, IN THIS CONNECTION, OUR DECISION B-176328, NOVEMBER 8, 1972, INVOLVING SOMEWHAT SIMILAR CIRCUMSTANCES, IN WHICH WE HELD THAT BIDDERS COULD NOT BE EXCUSED FROM THEIR FAILURE TO COMMIT THEMSELVES TO AFFIRMATIVE ACTION REQUIREMENTS MERELY BECAUSE THE FORM ON WHICH THAT COMMITMENT WAS TO BE MANIFESTED WAS PLACED IN THE GENERAL PROVISIONS SECTION OF A SOLICITATION AMENDMENT RATHER THAN IN THE BID DOCUMENTS SECTION.

SINCE WELCH AND CERTAIN OTHER BIDDERS DID NOT COMPLY WITH A MATERIAL REQUIREMENT OF THE IFB, WE CANNOT AGREE WITH THE VA THAT UNDER THE CIRCUMSTANCES THE LOW BID MAY BE ACCEPTED. THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM DEMANDS THAT ALL BIDDERS BE TREATED EQUALLY AND THAT ALL BE ALLOWED TO COMPETE ON AN EQUAL BASIS. 40 COMP. GEN. 321 (1960). AN ESSENTIAL ELEMENT OF THIS CONCEPT IS THAT BIDDERS NOT BE PERMITTED TO DECIDE, AFTER BID OPENING, WHETHER OR NOT TO HAVE THEIR BIDS REJECTED. ANY SUCH PROCEDURE, "WHICH PERMITS A BIDDER 'TWO BITES AT THE APPLE,' TENDS TO SUBVERT THE PURPOSES OF THE STATUTES GOVERNING PROCUREMENT UNDER COMPETITIVE PROCEDURES." 38 COMP. GEN. 532, 535 (1959). ALTHOUGH HERE VA STATES THAT THE LOW BIDDER DOES NOT HAVE THE OPPORTUNITY OF REJECTING THE CONTRACT SINCE VA NOW HAS A SIGNED CERTIFICATION FROM WELCH, IT IS CLEAR THAT IF SUCH A POST-BID OPENING CERTIFICATION COULD BE CONSIDERED, WELCH DID HAVE THE OPTION OF FURNISHING OR NOT FURNISHING THE CERTIFICATION AFTER BID PRICES HAD BEEN EXPOSED. THIS IS PRECISELY THE "TWO BITES AT THE APPLE" SITUATION THAT THE BID RESPONSIVENESS RULES ARE INTENDED TO PRECLUDE.

FINALLY, WITH REGARD TO THE SAVINGS POSSIBLE BY ACCEPTANCE OF THE LOW BID, IT IS WELL SETTLED THAT "THE MAINTENANCE OF THE INTEGRITY OF THE (COMPETITIVE BIDDING) SYSTEM IS INFINITELY MORE IN THE PUBLIC INTEREST THAN A FINANCIAL SAVING IN AN INDIVIDUAL CASE." 38 COMP. GEN., SUPRA., AT 536.

ACCORDINGLY, IT IS OUR VIEW THAT ANY BID WHICH DID NOT INCLUDE A COMMITMENT TO THE SANTA CLARA PLAN OR OTHER AFFIRMATIVE ACTION REQUIREMENTS OF THE SOLICITATION MUST BE REGARDED AS NONRESPONSIVE AND MAY NOT BE CONSIDERED FOR AWARD UNDER THE INSTANT SOLICITATION.