B-231504, Aug 4, 1988, 67 Comp.Gen. 563

B-231504: Aug 4, 1988

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Allegation that a valid contract exists between the protester and the contracting agency is without merit where the agency made award contingent upon the inclusion of the protester's safety proposal into the resulting contract. Protester is not prejudiced by contracting agency's failure to formally amend a solicitation to require the submission of a safety proposal where the only available and appropriate remedy would be to cancel and reissue the solicitation with the requirement for a safety proposal. Any awardee under the IFB is to provide. The contractor is not required to perform unless it is "willing and able. The agency is not obligated to order helicopter services under the proposed contracts when other "government contract helicopters are reasonably available.".

B-231504, Aug 4, 1988, 67 Comp.Gen. 563

Procurement - Contract Formation - Principles - Contract Awards - Offers - Acceptance 1. Allegation that a valid contract exists between the protester and the contracting agency is without merit where the agency made award contingent upon the inclusion of the protester's safety proposal into the resulting contract, and the protester refused to agree to this new contingency. Procurement - Bid Protests - Non-Prejudicial Allegation - GAO Review 2. Protester is not prejudiced by contracting agency's failure to formally amend a solicitation to require the submission of a safety proposal where the only available and appropriate remedy would be to cancel and reissue the solicitation with the requirement for a safety proposal, the very requirement the protester objects to.

Minuteman Aviation, Inc.:

Minuteman Aviation, Inc. protests the rejection of its bid by the Forest Service, Department of Agriculture, under invitation for bids (IFB) No. R1 -04-88-31 for helicopter services for administrative and/or fire activity use.

We deny the protest.

The IFB, issued March 28, 1988, contemplated multiple awards and requested prices for helicopter services on a "flight rate per hour" basis. Any awardee under the IFB is to provide, on a "call-when needed" basis, helicopters for use in the Forest Service Northern Region, primarily in conjunction with forest fire suppression. The contractor is not required to perform unless it is "willing and able," and the Forest Service reserves the right to order helicopters from various "call-when- needed" contractors based on cost and other factors. Additionally, the agency is not obligated to order helicopter services under the proposed contracts when other "government contract helicopters are reasonably available." For safety purposes, and for determining each bidder's responsibility, the IFB required bidders to provide information for the previous 36 months concerning the number of hours flown, number of accidents and their causes, and the corrective action taken to eliminate the same kind of accident.

Bids were received and evaluated. On May 11, 1988, the contracting officer signed the contract the agency proposed to award to Minuteman, as well as a cover letter which stated that a safety proposal, dated March 25, 1988, and amended April 15, submitted by Minuteman in response to negotiations involving other contracts, was "incorporated by reference into the contract in its entirety." (The safety proposal had not been a requirement of the IFB). /1/ On the same day, the contracting officer advised Minuteman by telephone that award was contingent upon the inclusion of the safety proposal. The following day, May 12, the contracting officer hand-delivered the contract, with the cover letter, to the protester. Minuteman, previously aware of the new safety condition from the telephone conversation with the contracting officer, objected to the inclusion of the safety proposal, and the meeting with the contracting officer concluded without a resolution of this issue. The contracting officer subsequently advised the protester by letter dated May 13, that no contract would be awarded to Minuteman. Four of six other bidders received awards.

First, Minuteman contends that it submitted a bid that complied in every respect with the terms of the solicitation, that the contracting officer executed the contract documents, and that consequently a valid contract exists effective May 11. It is the agency's position that no contract exists and that the additional condition imposed on Minuteman was necessary for safety reasons.

The protester's argument that the Forest Service awarded it a contract on May 11 by the contracting officer's execution of the contract documents is without merit. It is a fundamental rule that the act necessary to bind the government is its acceptance of an offer, and the acceptance must be clear, unequivocal, and unconditional. Mil-Base Industry, B-218015, Apr. 12, 1985, 85-1 CPD Para. 421. Further, the solicitation provided that only a written award or acceptance "mailed or otherwise furnished" to the bidder (as opposed to mere execution of the contract documents) would "result in a binding contract." Here, the executed contract, with the cover letter imposing the additional condition, was furnished to the protester, which had knowledge of the new condition, on May 12, and the protester never agreed to the new condition. While it is clear that the Forest Service initially planned to make an award to Minuteman, it is also clear that the Forest Service acceptance depended on the inclusion of the safety proposal and that Minuteman was aware that the Forest Service never intended to award a contract without inclusion of the safety proposal, which Minuteman rejected. Thus, there was never an agreement as to a material term. Consequently, we find that no contract was ever entered into between the Forest Service and Minuteman.

Minuteman next contends that since its bid complied with all the terms of the IFB, it has been wrongfully deprived of a contract for which it competed and won. We do not agree. While we recognize that the Forest Service should have amended the solicitation to include the requirement for the submission of a safety proposal, we find that its failure to do so did not prejudice the protester given the nature of the requirement, i.e., to ensure the safe operation of helicopters. This is because the only appropriate remedy would be cancellation (which would be justified in view of the critical safety concerns) and reissuance of the solicitation with the safety proposal requirement, the very requirement the protester flatly refuses to comply with. In this regard, the protester does not allege that the safety proposal would have had any effect on its price. further find that the Forest Service actions did not prejudice other bidders, since none had more than one accident during the relevant time period. Under the circumstances, we do not feel the Forest Service actions were unreasonable and since Minuteman was aware of the agency's position and had an opportunity to comply or suggest an alternative method to eliminate a correctable deficiency, we find that it was not prejudiced.

Finally, it is Minuteman's position that the government's attempt to incorporate the safety proposal in the resulting contract is improper and is tantamount to a constructive or de facto nonresponsibility determination that should have been referred to the Small Business Administration (SBA) for a Certificate of Competency. "Responsibility" relates to a potential contractor's ability to meet certain general standards set forth in Federal Acquisition Regulation Sec. 9.104-1 (FAC 84-18) as well as any special standards set forth in a solicitation. The failure of the Forest Service to award a contract to Minuteman because of its refusal to incorporate the safety proposal was not, in our view, a responsibility determination. The facts are clear that the Forest Service was ready to award a contract to Minuteman and wanted to obtain Minuteman's promise and obligation, through the incorporation of the safety proposal, to improve its safety performance and standards. Thus, it was not Minuteman's responsibility, but its contractual obligations which were at issue.

The protest is denied.

/1/ The Forest Service reports that within the preceding 36 months timeframe, Minuteman has had four accidents resulting in seven deaths. The safety proposal in question directly addressed various operations within the Minuteman organization designed to obligate the firm to improve the safety performance of its operation. The Forest Service also reports that safety proposals were not required from other bidders since no other bidder had more than one accident within the preceding 36 months.