B-147106, SEP. 25, 1961

B-147106, SEP. 25, 1961

TO MR. J. C. CLARKE, CONTRACTING OFFICER, UNITED STATES ATOMIC ENERGY COMMISSION, NEW YORK OPERATIONS OFFICE:

BY LETTER OF SEPTEMBER 1, 1961, WITH ENCLOSURES, YOU HAVE REQUESTED OUR DECISION PURSUANT TO 36 COMP. GEN. 513 AS TO THE PROPER DISPOSITION OF BIDS SUBMITTED IN RESPONSE TO INVITATION NO. NY-3-62 62, ISSUED JULY 28, 1961, FOR CONSTRUCTION WORK AT NATICK, MASSACHUSETTS.

THE ORIGINAL INVITATION WAS MODIFIED BY TWO ADDENDA ISSUED RESPECTIVELY ON AUGUST 11 AND AUGUST 22, 1961. THE SECOND ADDENDUM HAS BEEN DETERMINED BY YOUR ENGINEERING AND CONSTRUCTION DIVISION TO REPRESENT ADDITIONAL WORK APPROXIMATING $2,300 IN VALUE.

AFTER BID OPENING IT WAS DETERMINED, BASED PRIMARILY UPON THE AVAILABILITY OF FUNDS, THAT AWARD WOULD BE MADE ON THE BASIC WORK PLUS ALTERNATE (A), ONE OF A NUMBER OF POSSIBLE ADDITIONS TO THE BASIC WORK ON WHICH BIDS WERE SOLICITED BY THE INVITATION. THE LOW BID FOR THE PROJECT INCLUDING ALTERNATE (A), AT $808,712, WAS SUBMITTED BY THE NATIONAL CONSTRUCTION COMPANY. HOWEVER, THAT FIRM FAILED TO ACKNOWLEDGE RECEIPT OF THE SECOND ADDENDUM. IN A LETTER OF SEPTEMBER 2, 1961, TO US THE PRESIDENT OF THAT FIRM STATED THAT THE FAILURE TO ACKNOWLEDGE THE SECOND ADDENDUM WAS DUE TO A CLERICAL OVERSIGHT. IT IS NOTED FURTHER THAT THE VALUE OF THE WORK REPRESENTED BY THAT ADDENDUM IS CONSIDERABLY LESS THAN THE DIFFERENCE IN PRICE BETWEEN THE LOW BID AND THE SECOND LOW BID. FINALLY, AN UNQUALIFIED OFFER IS MADE IN THE LETTER TO PERFORM INCLUDING THE WORK REPRESENTED BY ADDENDUM NO. 2 AT THE BID PRICE.

THE FAILURE TO ACKNOWLEDGE RECEIPT OF AN ADDENDUM WHICH HAS THE EFFECT OF CHANGING THE PRICE, QUANTITY OR QUALITY OF THE WORK IS A MATERIAL DEVIATION WHICH REQUIRES REJECTION OF THE BID WHEN THE TERMS OF THE INVITATION, AS IN THIS CASE, SO PROVIDE. IN VIEW OF THE CIRCUMSTANCES WE CONCUR IN YOUR POSITION THAT THE LOW BID SHOULD BE REJECTED FOR FAILURE TO ACKNOWLEDGE THE ADDENDUM. SEE 33 COMP. GEN. 508, B-144147, NOVEMBER 15,1960.

THE SECOND LOW BID, IN THE AMOUNT OF $840,700, WAS QUALIFIED BY A STATEMENT IN THE BID FORM TO THE EFFECT THAT THE PRICE STATED WOULD NOT INCLUDE ANY WORK IN SECTIONS 31 AND 35. A BID WHICH EXPRESSLY EXCLUDES A MATERIAL ITEM OF WORK CALLED FOR BY THE TERMS OF THE INVITATION IS NON- RESPONSIVE AND, ACCORDINGLY, MUST BE REJECTED. 36 COMP. GEN. 1, 3.

THE THIRD LOW BID INCLUDING ALTERNATE (A), IN THE AMOUNT OF $842,580,WAS SUBMITTED BY THE GEORGE A. FULLER COMPANY. TWO QUESTIONS ARE RAISED AS TO THE ACCEPTABILITY OF THE THIRD LOW BID. THE FIRST IS THAT THE ORIGINAL PRICE INSERTED IN THE BID WAS LINED OUT AND REPLACED BY ANOTHER FIGURE WITHOUT MEETING THE REQUIREMENT IN PARAGRAPH 5 (A) OF THE INSTRUCTIONS TO BIDDERS THAT IN SUCH CASES THE CHANGE MUST BE INITIALED BY THE PERSON SIGNING THE BID. NO INITIALS APPEAR AT OR NEAR THE CHANGE IN AMOUNT.

IT IS WELL ESTABLISHED THAT THE REQUIREMENTS OF A BID MAY BE WAIVED WHERE THEY DO NOT AFFECT THE PRICE, QUANTITY OR QUALITY OF THE ARTICLES OFFERED TO THE PREJUDICE OF OTHER BIDDERS. 37 COMP. GEN. 763, 765; 30 COMP. GEN. 179. CLEARLY IN THIS CASE THE FAILURE TO CONFORM MAY BE WAIVED UNDER THAT RULE. IN ADDITION, THE FAILURE TO INITIAL ERASURES OR CHANGES HAS BEEN REGARDED BY THE STATE COURTS AS AN INFORMALITY WHICH MAY BE WAIVED. SEE IN RE CLAMP, 68 N.Y.S. 345. ACCORDINGLY IT IS OUR VIEW THAT THE FULLER BID SHOULD NOT BE REJECTED FOR FAILURE TO INITIAL THE CHANGED AMOUNT.

THE INVITATION REQUIRES THE SUBMISSION OF A BID GUARANTEE IN AN AMOUNT NOT LESS THAN 20 PERCENT OF THE LUMP SUM BID, I.E. THE BID ON THE BASIC WORK WITHOUT THE ALTERNATES. THE BID BOND SUBMITTED WITH THE FULLER BID WAS ORIGINALLY STATED IN THE AMOUNT OF $165,000 WHICH WOULD NOT HAVE MET THE MINIMUM REQUIREMENT FOR THE LUMP SUM BID AS CHANGED. HOWEVER, THE INITIAL AMOUNT WAS CROSSED OUT AND $170,000 SUBSTITUTED THEREFOR IN WHAT IS OBVIOUSLY THE SAME HAND. AS WE HAVE STATED, THE CRITERION FOR DETERMINING ACCEPTABILITY OF A BID BOND IS THAT THE SURETY BE BOUND UPON IT IN THE REQUIRED AMOUNT IN THE EVENT OF A FAILURE BY THE SUCCESSFUL BIDDER TO PROCEED. ABSENT FRAUD, THE COMPLETION OF THE BLANKS BY ONE OTHER THAN THE SURETY DOES NOT AFFECT THE SURETY'S LIABILITY. 11 C.J.S. BONDS SECTION 20. IN THIS CASE IT SEEMS CLEAR THAT THE AMOUNT OF THE BOND WAS LEFT BLANK TO BE COMPLETED BY THE BIDDER AS THE AGENT OF THE SURETY. IT IS OUR UNDERSTANDING THAT THIS PROCEDURE IS NOT UNUSUAL AND IS UTILIZED IN ORDER TO AVOID ANY POSSIBILITY OF A LEAK THROUGH THE SURETY AS TO THE AMOUNT OF THE BID. SEE B-143404, SEPTEMBER 15, 1960. THEREFORE, THE INSERTION OF THE ORIGINAL FIGURE OF $165,000 WOULD HAVE BOUND THE SURETY COMPANY TO THAT AMOUNT. SINCE THE HIGHER FIGURE IS IN THE SAME HAND, WE SEE NO REASON WHY IT SHOULD NOT BE EQUALLY BINDING. HOWEVER, IT IS NOT NECESSARY TO DECIDE THIS MATTER SINCE, UNDER THE TERMS OF FPR 1-10.102 5 (B), THE FAILURE OF THE BID BOND TO BE IN THE STATED AMOUNT MAY BE WAIVED WHERE THE ACTUAL AMOUNT IS EQUAL TO OR GREATER THAN THE DIFFERENCE BETWEEN THE BID PRICE AND THE NEXT HIGHER ACCEPTABLE BID. IN THIS INSTANCE THE DIFFERENCE BETWEEN THE FULLER BID AND THE HIGHEST BID, WHICH APPEARS TO BE PROPER IN ALL RESPECTS, IS LESS THAN $8,000. THEREFORE THE FULLER BID NEED NOT BE REJECTED FOR THE REASONS CONSIDERED ABOVE.