B-176462, OCT 20, 1972

B-176462: Oct 20, 1972

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RIESE & JONES: REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 8. THE SUBJECT SOLICITATION WAS ISSUED ON MARCH 28. THE OPENING OF BIDS WAS SCHEDULED FOR MAY 10. THE RECORD INDICATES THAT THE CONTRACT WAS AWARDED TO ARNOLD M. HOWEVER AMENDMENT 0002 WAS NOT ACKNOWLEDGED IN SUCH MANNER. WAS CROSSED OUT AND MAY 12. WAS SUBSTITUTED. 3. THE SAME DATE WAS INSERTED IN THE BLOCK ENTITLED "DATE BOND EXECUTED (MUST NOT BE LATER THAN BID OPENING DATE)". 4. WAS CROSSED OUT AND REPLACED WITH MAY 16. IT WAS DETERMINED BY THE PROCURING ACTIVITY THAT. THE ONLY REASONABLE CONCLUSION TO BE DERIVED FROM THE BID DOCUMENTS WAS THAT DIAMOND HAD RECEIVED THE AMENDMENT AND ITS ACKNOWLEDGMENT WAS NECESSARILY IMPLIED.

B-176462, OCT 20, 1972

BID PROTEST - FAILURE TO ACKNOWLEDGE RECEIPT OF AMENDMENT - CONSTRUCTIVE ACKNOWLEDGEMENT DENIAL OF PROTEST ON BEHALF OF R. C. HEDREEN COMPANY AGAINST THE AWARD OF A CONTRACT TO ARNOLD M. DIAMOND, INC., UNDER AN IFB ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND. FAILURE TO FORMALLY ACKNOWLEDGE RECEIPT OF AN AMENDMENT CAN PROPERLY BE WAIVED AS A "MINOR INFORMALITY" UNDER ASPR 2-405(IV)(A). WHERE THE BID ITSELF CONTAINS ONE OF THE ESSENTIAL ITEMS APPEARING ONLY IN THE AMENDMENT, SUCH ACTION OF THE BIDDER CONSTITUTES CONSTRUCTIVE ACKNOWLEDGEMENT OF RECEIPT OF THE AMENDMENT.

TO DAVIS, WRIGHT, TODD, RIESE & JONES:

REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 8, 1972, YOUR LETTER DATED JULY 7, 1972, AND SUBSEQUENT COMMUNICATIONS ON BEHALF OF R. C. HEDREEN COMPANY PROTESTING THE AWARD OF A CONTRACT TO ANOTHER FIRM PURSUANT TO INVITATION FOR BIDS N62474-71-B-4355, PREPARED BY THE DEPARTMENT OF THE NAVY, WESTERN DIVISION, NAVAL FACILITIES ENGINEERING COMMAND.

THE SUBJECT SOLICITATION WAS ISSUED ON MARCH 28, 1972, AND THE OPENING OF BIDS WAS SCHEDULED FOR MAY 10, 1972. AMENDMENT NO. 0001, WITH AN EFFECTIVE DATE OF APRIL 27, 1972, WARNED PROSPECTIVE BIDDERS OF THE POSSIBILITY THAT GROUND WATER MIGHT BE ENCOUNTERED IN EXCAVATIONS BELOW 121 FEET, AND SPECIFIED INSTRUCTIONS TO BE FOLLOWED IN THE EVENT OF SUCH CONTINGENCY. THAT AMENDMENT ALSO EFFECTED VARIOUS CHANGES PERTAINING TO THE HEATING, VENTILATING AND STEAM SYSTEMS, AND THE ELECTRICAL WORK.

AMENDMENT 0002, WITH AN EFFECTIVE DATE OF MAY 5, 1972, EXTENDED THE TIME FOR OPENING OF BIDS FROM MAY 10, 1972, TO MAY 16, 1972, AND SET FORTH ADDITIONAL CHANGES RELATING TO CRANES, HOISTS, AND ELECTRICAL WORK.

THE RECORD INDICATES THAT THE CONTRACT WAS AWARDED TO ARNOLD M. DIAMOND, INC. (DIAMOND). DIAMOND'S BID FORM REVEALS A FORMAL ACKNOWLEDGMENT OF AMENDMENT 0001 IN THE SPACE ALLOCATED FOR THE ACKNOWLEDGMENT OF RECEIPT OF AMENDMENTS; HOWEVER AMENDMENT 0002 WAS NOT ACKNOWLEDGED IN SUCH MANNER.

FURTHER EXAMINATION OF DIAMOND'S BID FORM REVEALS THE FOLLOWING:

1. DIAMOND HAD ORIGINALLY DATED THE BID FORM, STANDARD FORM 21, MAY 5, 1972, THEN CROSSED OUT THAT DATE AND INSERTED MAY 12, 1972.

2. ON STANDARD FORM 19-B, REPRESENTATIONS AND CERTIFICATIONS, IN THE SPACE ENTITLED "DATE OF BID", MAY 5, 1972, WAS CROSSED OUT AND MAY 12, 1972, WAS SUBSTITUTED.

3. STANDARD FORM 24, BID BOND, SHOWED MAY 12, 1972, AS "BID DATE", AND THE SAME DATE WAS INSERTED IN THE BLOCK ENTITLED "DATE BOND EXECUTED (MUST NOT BE LATER THAN BID OPENING DATE)".

4. DIAMOND'S SEALED BID ENVELOPE SHOWED THAT AN INDICATED "BID OPENING DATE" OF MAY 10, 1972, WAS CROSSED OUT AND REPLACED WITH MAY 16, 1972.

ON THE BASIS OF THE FOREGOING, IT WAS DETERMINED BY THE PROCURING ACTIVITY THAT, ALTHOUGH DIAMOND HAD NOT FORMALLY ACKNOWLEDGED AMENDMENT 0002, THE ONLY REASONABLE CONCLUSION TO BE DERIVED FROM THE BID DOCUMENTS WAS THAT DIAMOND HAD RECEIVED THE AMENDMENT AND ITS ACKNOWLEDGMENT WAS NECESSARILY IMPLIED. THE CONTRACTING OFFICER THEREFORE CONCLUDED THAT DIAMOND'S FAILURE TO FORMALLY ACKNOWLEDGE COULD PROPERLY BE WAIVED AS A MINOR INFORMALITY UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2- 405(IV)(A).

IN SUPPORT OF ITS CONCLUSION, THE PROCURING ACTIVITY EMPHASIZES THE REDATING OF DIAMOND'S BID TO MAY 12, 1972, AND ITS BID ENVELOPE TO MAY 16, 1972 (2 AND 6 DAYS RESPECTIVELY AFTER THE ORIGINAL TIME SET FOR BID OPENING). IT IS URGED THAT THESE CHANGES DEMONSTRATE DIAMOND'S KNOWLEDGE OF AND INTENT TO COMPLY WITH THE CONTENTS OF THE SECOND AMENDMENT.

IT IS YOUR CONTENTION THAT THE WAIVER PURSUANT TO ASPR 2-405(IV)(A) WAS IMPROPER, SINCE NOWHERE IS IT CLEARLY INDICATED THAT THE SECOND AMENDMENT WAS RECEIVED. YOU ALLEGE THAT THE TREATMENT OF DIAMOND'S BID AS RESPONSIVE AFFORDS THAT BIDDER AN ADVANTAGE NOT AVAILABLE TO OTHER BIDDERS, SPECIFICALLY, THE OPTION, AFTER REVIEWING BID PRICES, OF CLAIMING A MISTAKE IN ITS OWN BID PRICE DUE TO ITS FAILURE TO RECEIVE THE SECOND AMENDMENT. YOU ALSO QUESTION WHETHER DIAMOND IS LEGALLY BOUND TO PERFORM THE ADDITIONAL CHANGES SET FORTH IN THE SECOND AMENDMENT, WHICH YOU ALLEGE WOULD INCREASE PERFORMANCE COSTS BY $15,000 TO $20,000.

OUR OFFICE HAS STATED THAT THE FAILURE OF THE LOW BIDDER TO FORMALLY ACKNOWLEDGE THE RECEIPT OF ADDENDA TO THE SPECIFICATIONS MAY BE TREATED AS AN INFORMALITY AND WAIVED WHERE THE BID ITSELF INCLUDES ONE OF THE ESSENTIAL ITEMS APPEARING ONLY IN THE ADDENDUM. SEE 34 COMP. GEN. 581, 582 (1955). IN THAT DECISION, WE CONCLUDED THAT SUCH ACTION OF THE BIDDER CONSTITUTED CONSTRUCTIVE ACKNOWLEDGMENT OF RECEIPT OF THE ADDENDUM.

IN THE INSTANT CASE, THE ENUMERATED CANCELLATIONS AND POSTDATINGS ON DIAMOND'S BID AND BID ENVELOPE REFLECT ACTUAL KNOWLEDGE OF ONE OF THE ESSENTIAL TERMS OF AMENDMENT 0002, NAMELY THE EXTENSION OF BID OPENING FROM MAY 10 TO MAY 16, 1972. ASPR 2-208(A) CLEARLY REQUIRES A CHANGE IN BID OPENING DATE TO BE ACCOMPLISHED BY ISSUANCE OF AN AMENDMENT TO THE INVITATION, AND ALL BIDDERS ARE CHARGEABLE WITH KNOWLEDGE OF THAT REQUIREMENT. SINCE THE EXTENSION IN THE INSTANT CASE APPEARS ONLY IN THE SECOND AMENDMENT, IT FOLLOWS THAT DIAMOND IS CHARGEABLE WITH KNOWLEDGE THAT SUCH AN AMENDMENT HAD BEEN ISSUED.

IN VIEW THEREOF, IT IS OUR CONCLUSION 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.

ACCORDINGLY, WE MUST CONCUR WITH THE DECISION TO TREAT DIAMOND'S FAILURE TO FORMALLY ACKNOWLEDGE THAT AMENDMENT AS A MINOR INFORMALITY, AND YOUR PROTEST MUST THEREFORE BE DENIED.

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