B-183364, AUG 13, 1975

B-183364: Aug 13, 1975

Additional Materials:

Contact:

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

 

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

WHICH WAS $284 LESS THAN THE AMOUNT PRESCRIBED BY IFB. WAS PROPER. BECAUSE DISCREPANCY IN AMOUNT OF BOND WAS DE MINIMIS AND COULD BE WAIVED AS A MINOR INFORMALITY. WAS ISSUED BY THE OMAHA DISTRICT. BIDDERS WERE REQUIRED TO ENTER PRICES FOR THE BASIC ITEM AND EACH OF FIVE ADDITIVE ITEMS IN THE SCHEDULE. THE METHOD OF EVALUATING BIDS WAS SET OUT AS FOLLOWS IN THE SOLICITATION CLAUSE ENTITLED "ADDITIVE OR DEDUCTIVE ITEMS (1968 ASPR)": "THE LOW BIDDER FOR PURPOSES OF AWARD SHALL BE THE CONFORMING RESPONSIBLE BIDDER OFFERING THE LOW AGGREGATE AMOUNT FOR THE FIRST OR BASE BID ITEM. PLUS OR MINUS (IN THE ORDER OF PRIORITY LISTED IN THE SCHEDULE) THOSE ADDITIVE OR DEDUCTIVE BID ITEMS PROVIDING THE MOST FEATURES WITHIN THE FUNDS DETERMINED BY THE GOVERNMENT TO BE AVAILABLE BEFORE BIDS ARE OPENED. *** THE LISTED ORDER OF PRIORITY NEED BE FOLLOWED ONLY FOR DETERMINING THE LOW BIDDER.

B-183364, AUG 13, 1975

ACCEPTANCE OF BID ACCOMPANIED BY $55,000 BID BOND, WHICH WAS $284 LESS THAN THE AMOUNT PRESCRIBED BY IFB, WAS PROPER, BECAUSE DISCREPANCY IN AMOUNT OF BOND WAS DE MINIMIS AND COULD BE WAIVED AS A MINOR INFORMALITY.

ARCH ASSOCIATES, INC.:

INVITATION FOR BIDS (IFB) NO. DACA45-75-B-0087, FOR THE PARTIAL REHABILITATION OF AN OFFICE BUILDING, WAS ISSUED BY THE OMAHA DISTRICT, ARMY CORPS OF ENGINEERS. BIDDERS WERE REQUIRED TO ENTER PRICES FOR THE BASIC ITEM AND EACH OF FIVE ADDITIVE ITEMS IN THE SCHEDULE, AND TO SUBMIT A BID BOND IN THE AMOUNT OF TWENTY PERCENT "OF THE BID PRICE."

THE METHOD OF EVALUATING BIDS WAS SET OUT AS FOLLOWS IN THE SOLICITATION CLAUSE ENTITLED "ADDITIVE OR DEDUCTIVE ITEMS (1968 ASPR)":

"THE LOW BIDDER FOR PURPOSES OF AWARD SHALL BE THE CONFORMING RESPONSIBLE BIDDER OFFERING THE LOW AGGREGATE AMOUNT FOR THE FIRST OR BASE BID ITEM, PLUS OR MINUS (IN THE ORDER OF PRIORITY LISTED IN THE SCHEDULE) THOSE ADDITIVE OR DEDUCTIVE BID ITEMS PROVIDING THE MOST FEATURES WITHIN THE FUNDS DETERMINED BY THE GOVERNMENT TO BE AVAILABLE BEFORE BIDS ARE OPENED. *** THE LISTED ORDER OF PRIORITY NEED BE FOLLOWED ONLY FOR DETERMINING THE LOW BIDDER. AFTER DETERMINATION OF THE LOW BIDDER AS STATED, AWARD IN THE BEST INTERESTS OF THE GOVERNMENT MAY BE MADE TO HIM ON HIS BASE BID AND ANY COMBINATION OF HIS ADDITIVE OR DEDUCTIVE BID FOR WHICH FUNDS ARE DETERMINED TO BE AVAILABLE AT THE TIME OF AWARD, PROVIDED THAT AWARD ON SUCH COMBINATION OF BID ITEMS DOES NOT EXCEED THE AMOUNT OFFERED BY ANY OTHER CONFORMING RESPONSIBLE BIDDER FOR THE SAME COMBINATION OF BID ITEMS."

AT THE TIME OF BID OPENING, $374,680 WAS AVAILABLE FOR AWARD. OF THE TEN BIDS RECEIVED, THREE FOR THE BASIC BID PLUS ALL FIVE ADDITIVE ITEMS WERE WITHIN THE FUNDS AVAILABLE:

MALAWSKI AND SONS CONSTR. CO. $276,422

ARCH ASSOCIATES, INC. 360,700

J.W. HALM CONSTR. 364,632

IN VIEW OF THE DISCREPANCY BETWEEN THE MALAWSKI BID AND THE OTHER BIDS AND THE GOVERNMENT ESTIMATE ($379,669), CONFIRMATION OF MALAWSKI'S BID PRICE WAS OBTAINED.

SHORTLY AFTER BID OPENING, IT WAS OBSERVED THAT THE $55,000 BID BOND WHICH ACCOMPANIED MALAWSKI'S BID WAS $284 LESS THAN THE AMOUNT REQUIRED BY THE 20 PERCENT FORMULA SET FORTH IN THE SOLICITATION. INITIALLY, THE CONTRACTING OFFICER ORALLY EXPRESSED THE OPINION THAT MALAWSKI'S BID WAS NONRESPONSIVE BECAUSE OF THE INADEQUACY OF THE BID BOND. MALAWSKI PROTESTED TO THE CONTRACTING OFFICER WHO, UPON RECONSIDERATION, DETERMINED THAT THE FIRM'S BID WAS RESPONSIVE INSOFAR AS THE BASIC BID AND THE FIRST FOUR ADDITIVES WERE CONCERNED, SINCE THE BID BOND SUPPLIED WAS SUFFICIENT TO COVER THOSE ITEMS. AWARD WAS THEN MADE TO MALAWSKI FOR THE BASIC BID ITEM AND ADDITIVE ITEMS 1 THROUGH 4. THEREAFTER, ARCH ASSOCIATES PROTESTED THE CONTRACTING OFFICER'S DETERMINATION AND REQUESTED THAT THE PROTEST BE FORWARDED TO OUR OFFICE FOR DECISION.

ARCH ASSOCIATES CONTENDS THAT IT, RATHER THAN MALAWSKI, WAS THE LOW BIDDER FOR PURPOSES OF AWARD ACCORDING TO THE METHOD OF SELECTION ESTABLISHED BY THE FIRST SENTENCE OF THE "ADDITIVE OR DEDUCTIVE ITEMS" CLAUSE, QUOTED ABOVE. ARCH NOTES THAT THREE BIDS INCLUDING ALL ADDITIVE ITEMS WERE SUBMITTED WHICH WERE WITHIN THE FUNDS AVAILABLE AT THE TIME OF BID OPENING. THE "LOW BIDDER FOR PURPOSES OF AWARD," THEREFORE, IS THAT "CONFORMING" RESPONSIBLE BIDDER WHOSE AGGREGATE BID FOR ALL ITEMS WAS LOW. ARCH ARGUES THAT MALAWSKI WAS NOT THE LOW, "CONFORMING" (OR RESPONSIVE) BIDDER BECAUSE ITS BID BOND WAS $284 LESS THAN THE AMOUNT REQUIRED BY THE IFB.

WE AGREE WITH THE PROTESTER'S UNDERSTANDING OF THE GENERAL OPERATION OF THE "ADDITIVE AND DEDUCTIVE ITEMS" CLAUSE. NEVERTHELESS, FOR THE REASON STATED BELOW, WE BELIEVE THE AWARD TO MALAWSKI WAS PROPER.

THE PURPOSE OF A BID BOND IS TO ASSURE THE GOVERNMENT THAT THE SUCCESSFUL BIDDER WILL EXECUTE THE CONTRACT AND GIVE THE NECESSARY PERFORMANCE BOND. IN THE INSTANT CASE, THE GOVERNMENT'S INTERESTS WERE PROTECTED BY A BID BOND IN THE AMOUNT OF $55,000, WHICH WAS $284 BELOW THE SPECIFIED 20 PERCENT OF MALAWSKI'S BID OF $276,422 ON ALL ITEMS. WE BELIEVE THE GOVERNMENT'S INTERESTS WERE ADEQUATELY PROTECTED BY MALAWSKI'S BID BOND, THAT THE DISCREPANCY OF $284 WAS DE MINIMIS AND COULD HAVE BEEN WAIVED AS A MINOR INFORMALITY UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 2-405 (1974 ED.). SEE B-140624, NOVEMBER 23, 1959.

IF THE DEFICIENCY IN ITS BID BOND WERE WAIVED AS A MINOR INFORMALITY, MALAWSKI WOULD BE THE "LOW BIDDER FOR PURPOSES OF AWARD" AS PROVIDED BY THE FIRST SENTENCE OF THE "ADDITIVE AND DEDUCTIVE ITEMS" CLAUSE. IN THE LAST SENTENCE OF THAT CLAUSE, THE GOVERNMENT RESERVED THE RIGHT TO AWARD TO THE LOW BIDDER ITS BASE BID AND ANY COMBINATION OF ITS ADDITIVE BIDS FOR WHICH FUNDS WERE AVAILABLE AT THE TIME OF AWARD, PROVIDING THAT NO OTHER BIDDER OFFERED A LOWER PRICE FOR THE SAME COMBINATION OF BID ITEMS. THE AWARD TO MALAWSKI OF ITS BASE BID PLUS ADDITIVE ITEMS 1 THROUGH 4 SATISFIED THESE CRITERIA. THE AWARD WAS THEREFORE PROPER AND THE PROTEST IS DENIED.