B-175420, MAY 22, 1972

B-175420, MAY 22, 1972

BID PROTEST - NONRESPONSIVENESS - FAILURE TO ACKNOWLEDGE AMENDMENT DECISION DENYING THE PROTEST OF INDIAN PRODUCTS COMPANY AGAINST AWARD OF AN INDEFINITE-QUANTITY CONTRACT TO ANOTHER FIRM UNDER AN IFB ISSUED BY THE GENERAL SERVICES ADMINISTRATION FOR A QUANTITY OF MECHANICAL PENCILS AND LEAD. AS A GENERAL RULE, A BIDDER'S FAILURE TO ACKNOWLEDGE AN AMENDMENT WHICH AFFECTS THE PRICE, QUANTITY, OR QUALITY OF A PROCUREMENT RENDERS THE BID NONRESPONSIVE. 37 COMP. GEN. 785 (1958). SINCE THE SUBJECT AMENDMENT CONCERNED COMPLIANCE WITH THE PRICE REQUIREMENTS OF EXECUTIVE ORDER 11615, AUGUST 15, 1971, THERE EXISTS NO LEGAL BASIS FOR OBJECTION TO THE AGENCY'S DECISION AND THE PROTEST MUST BE DENIED.

TO INDIAN PRODUCTS COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF MARCH 7 AND 17, 1972, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER INVITATION FOR BIDS (IFB) FPNSO-EP-2035A, ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA).

THE INVITATION, ISSUED ON AUGUST 13, 1971, AND OPENED ON SEPTEMBER 14, 1971, WAS AN INDEFINITE-QUANTITY CONTRACT COVERING THE ESTIMATED REQUIREMENTS OF GSA SUPPLY DEPOTS FOR MECHANICAL PENCILS AND LEAD.

WHEN THE BIDS WERE OPENED IT WAS DETERMINED THAT YOUR FIRM WAS THE LOW BIDDER ON ITEMS 1 THROUGH 4 AND 6 THROUGH 10 AND THAT J. S. STAEDTLER, INC. (STAEDTLER), WAS THE SECOND LOW BIDDER FOR ITEMS THROUGH 10. HOWEVER, NEITHER YOUR FIRM NOR STAEDTLER SUBMITTED AMENDMENT NO. 1 WITH ITS BID. AMENDMENT NO. 1, EFFECTIVE AUGUST 26, 1971, WAS ISSUED PURSUANT TO FEDERAL SUPPLY SERVICE (FSS) MEMO DATED AUGUST 23, 1971, AND PROVIDED AS FOLLOWS:

"THE FOLLOWING PRICE CERTIFICATION IS TO BE INCLUDED IN THIS SOLICITATION TO IMPLEMENT THE PRESIDENT'S EXECUTIVE ORDER NO. 11615 REGARDING PRICES.

PRICE CERTIFICATION

(A) BY SUBMISSION OF THIS BID (OFFER) BIDDER (OFFEROR) CERTIFIED THAT HE IS IN COMPLIANCE AND WILL CONTINUE TO COMPLY WITH THE REQUIREMENTS OF EXECUTIVE ORDER 11615, AUGUST 15, 1971, FOR THE DURATION THEREOF, AND FURTHER CERTIFIES THAT THE PRICES BID (OFFERED) HEREIN EITHER CONFORM TO THE REQUIREMENTS OF EXECUTIVE ORDER 11615 OR SHALL BE REDUCED ACCORDINGLY AT THE TIME OF ANY BILLINGS THAT ARE MADE DURING THE EFFECTIVE PERIOD OF THE EXECUTIVE ORDER.

(B) PRIOR TO THE PAYMENT OF INVOICES UNDER THIS CONTRACT, THE CONTRACTOR SHALL EITHER:

(1) SUBMIT A LETTER TO THE PAYMENT OFFICE CONTAINING THE FOLLOWING CERTIFICATION:

'I HEREBY CERTIFY THAT AMOUNTS INVOICED ON AND AFTER AUGUST 15, 1971, UNDER CONTRACT OR PURCHASE ORDER NUMBERS) WILL NOT EXCEED THE LOWER OF (I) THE CONTRACT PRICE, OR (II) MAXIMUM LEVELS ESTABLISHED IN ACCORDANCE WITH EXECUTIVE ORDER 11615, DATED AUGUST 15, 1971, OR

(2) PLACE ON EACH INVOICE SUBMITTED THE FOLLOWING CERTIFICATION:

'I HEREBY CERTIFY THAT AMOUNTS INVOICED HEREIN DO NOT EXCEED THE LOWER OF (I) THE CONTRACT PRICE, OR (II) MAXIMUM LEVELS ESTABLISHED IN ACCORDANCE WITH EXECUTIVE ORDER 11615 DATED AUGUST 15, 1971.'

(C) THE CONTRACTOR AGREES TO INSERT THE SUBSTANCE OF THIS CLAUSE, INCLUDING THIS PARAGRAPH (C), IN ALL SUBCONTRACTS FOR SUPPLIES OR SERVICES ISSUED UNDER THIS CONTRACT.

(D) BIDS (OFFERS) WHICH DO NOT CONTAIN THE PRICE CERTIFICATION SET FORTH ABOVE ARE NON-RESPONSIVE."

BECAUSE OF THE FAILURE TO SUBMIT AMENDMENT NO. 1, BOTH YOUR FIRM AND STAEDTLER WERE DETERMINED TO BE NONRESPONSIVE PURSUANT TO FEDERAL PROCUREMENT REGULATIONS (FPR) TEMPORARY REGULATIONS 22, SECTION 1-1. 321- 3(C) DATED SEPTEMBER 9, 1971, WHICH IMPLEMENTED THE FSS MEMO OF AUGUST 23, 1971. SECTION 1-1.321-3(C) STATES:

"(C) WHERE INVITATIONS FOR BIDS AND REQUESTS FOR PROPOSALS INCLUDE THE CERTIFICATION REQUIREMENT AND BIDDERS AND OFFERORS DECLINE TO COMPLY WITH THE CERTIFICATION, THEIR BIDS AND OFFERS SHALL BE DEEMED TO BE NONRESPONSIVE."

IN VIEW OF THE FINDING OF NONRESPONSIVENESS, THE BID OFFERS OF BOTH YOUR FIRM AND STAEDTLER WERE ALLOWED TO EXPIRE.

IT IS YOUR CONTENTION THAT SINCE YOU WERE THE LOW BIDDER AND HAD OFFERED A GOOD PRODUCT, YOU WERE ENTITLED TO THE AWARD. HOWEVER, YOU IGNORE THE FACT THAT IN ORDER FOR A BID TO BE CONSIDERED FOR AWARD, IT MUST COMPLY IN ALL MATERIAL RESPECTS WITH THE INVITATION FOR BIDS. SEE FPR 1-2.301(A). AS TO WHAT IS MATERIAL WE HAVE HELD THAT IF AN ADDENDUM TO AN INVITATION AFFECTS PRICE, QUANTITY OR QUALITY, IT CONCERNS MATERIAL MATTERS WHICH MAY NOT BE WAIVED, AND FAILURE BY A BIDDER TO ACKNOWLEDGE ITS RECEIPT IN THE MANNER REQUIRED BY THE INVITATION RENDERS THE BID NONRESPONSIVE. 37 COMP. GEN. 785 (1958). THE BASIS FOR SUCH A RULE IS THAT A BIDDER WOULD OTHERWISE HAVE AN OPTION TO DECIDE AFTER BID OPENING TO BECOME ELIGIBLE FOR THE AWARD BY COMING FORTH WITH EVIDENCE OUTSIDE THE BID ITSELF ESTABLISHING THAT THE ADDENDUM HAD BEEN CONSIDERED, OR TO AVOID AWARD BY REMAINING SILENT. IN THE PRESENT CASE THE CERTIFICATION CLEARLY RELATES TO PRICE INASMUCH AS IT BOUND THE BIDDER TO REDUCE, AT THE TIME OF BILLING, ANY PRICES OFFERED IN THE BID WHICH DID NOT CONFORM TO THE REQUIREMENTS OF EXECUTIVE ORDER 11615. THEREFORE, WE CANNOT CONCLUDE THAT YOUR FAILURE TO ACKNOWLEDGE AMENDMENT NO. 1 WAS A MINOR INFORMALITY WHICH COULD BE WAIVED OR THAT GSA'S DETERMINATION THAT YOUR BID WAS NONRESPONSIVE IN SUCH RESPECT WAS ERRONEOUS. SEE B-174366, DECEMBER 10, 1971.

WHILE WE REALIZE THAT YOUR BID WAS LOW ON SEVERAL ITEMS, IT HAS BEEN OUR CONSISTENT POSITION THAT STRICT MAINTENANCE OF THE ESTABLISHED PRINCIPLES OF COMPETITIVE PROCUREMENT BY THE GOVERNMENT AGENCIES IS INFINITELY MORE IN THE PUBLIC INTEREST THAN FOR THE GOVERNMENT TO OBTAIN A PECUNIARY ADVANTAGE IN A PARTICULAR CASE BY VIOLATION OF THE RULES. 43 COMP. GEN. 268 (1963).