B-193238, FEBRUARY 27, 1979

B-193238, FEBRUARY 27, 1979

DIGEST: FAILURE TO SUBMIT PRICE FOR DATA SUBITEM IN SECOND STEP IFB OF TWO STEP PROCUREMENT RENDERS BID NONRESPONSIVE WHERE ACCORDING TO AGENCY TECHNICAL PERSONNEL, ITEM IS MATERIAL REQUIREMENT, AND NO MENTION OF ITEM IS CONTAINED IN STEP ONE TECHNICAL PROPOSAL. HOWEVER, WHERE OTHER BIDDER OMITS PRICE FOR SAME ITEM, BUT SPECIFICALLY DISCUSSES ITEM IN STEP ONE PROPOSAL, BID MAY BE CONSIDERED FOR AWARD SINCE A BIDDER, FOUND ACCEPTABLE UNDER STEP ONE, WOULD NOT LIKELY DISQUALIFY BID BY INSERTING CONDITION IN CONTRADICTION OF ACCEPTED STEP ONE PROPOSAL.

FEDERAL AVIATION ADMINISTRATION:

THIS DECISION RESPONDS TO THE FEDERAL AVIATION ADMINISTRATION'S (FAA) REQUEST OF OCTOBER 27, 1978, FOR AN ADVANCE DECISION CONCERNING THE RESPONSIVENESS OF THE APPARENT LOW BID AND SECOND LOW BID FOR THE SUPPLY OF TONE SUPPRESSION AMLIFIERS UNDER A TWO-STEP PROCUREMENT. PRIOR TO RECEIPT OF FAA'S REQUEST, THE APPARENT LOW BIDDER, TM SYSTEMS INC. (TM), FILED A PROTEST IN GAO, REQUESTING SUSPENSION OF ITS CONSIDERATION PENDING FORMAL ACTION BY THE FAA. UNIVOX-CALIFORNIA INC. (UNIVOX), THE SECOND LOW BIDDER, AS WELL AS TARGET CORPORATION (TARGET) RESPONDED TO OUR INVITATION FOR COMMENTS.

SEVEN PROPOSALS WERE RECEIVED IN RESPONSE TO A REQUEST FOR TECHNICAL PROPOSALS (RFTP) ISSUED IN A LETTER BY FAA ON MARCH 14, 1978, UNDER SUBPART 1-2.5 OF THE FEDERAL PROCUREMENT REGULATIONS. 41 C.F.R. 1-2.5 (FPR). FOUR PROPOSALS WERE FOUND TECHNICALLY ACCEPTABLE, ALTHOUGH ONLY TM, UNIVOX AND TARGET SUBMITTED BIDS IN RESPONSE TO SOLICITATION LGM-8 7025, (IFB) WHICH WAS ISSUED UNDER STEP TWO. THE TOTAL BID PRICES WERE AS FOLLOWS:

TM $ 632,661.00

UNIVOX 810,316.00

TARGET $1,152,891.31

THE QUESTION OF WHETHER THE BIDS OF TM AND UNIVOX ARE RESPONSIVE ARISES BECAUSE THE PRICE FOR A SUBITEM IN THE IFB WAS OMITTED FROM THEIR RESPECTIVE BIDS.

THE IFB, WHICH ALSO WAS PART OF THE RFTP, CONTAINED 14 LINE ITEMS WITH SEVERAL SUBITEMS; IT CONTAINED FOR ITEM 10 A PRICE LINE ADJACENT TO EACH SUBITEM, EXCEPT SUBITEM 10F, WHICH REQUIRES THE FURNISHING OF A MASTER PATTERN AND PLAN VIEW OF PARTS LAYOUT (LAYOUT). THE ABSENCE OF THE PRICE LINE WAS INADVERTENT. FAA'S QUESTION CONCERNS THE OMISSION OF A PRICE FOR SUBITEM 10F IN THE TM AND UNIVOX BIDS, IN THE LIGHT OF ARTICLE V OF THE IFB, WHICH READS;

"AWARD

AWARD WILL BE MADE ON THE BASIS OF THE LOWEST AGGREGATE BID RECEIVED FOR ALL ITEMS AND TWENTY-FIVE (25) EACH ITEM IDENTIFICATIONS. FOR A BID TO BE CONSIDERED RESPONSIVE, IT MUST CONTAIN PRICES FOR ALL ITEMS AND QUANTITIES, EXCEPT ITEM 11."

ITEM 10 OF THE BIDS SUBMITTED BY TM AND UNIVOX FOLLOWS:

TM (TABLE OMITTED)

UNIVOX (TABLE OMITTED)

FAA BELIEVES THAT THE BIDS OF TM AND UNIVOX ARE RESPONSIVE. THE AGENCY STRESSES THE PECULIAR CIRCUMSTANCES OF A TWO-STEP PROCUREMENT AS A BASIS FOR CONCLUDING THAT A BIDDER, HAVING INCURRED CONSIDERABLE EXPENSE IN SUBMITTING AN ACCEPTABLE UNPRICED TECHNICAL PROPOSAL UNDER STEP ONE, WOULD NOT CONSCIOUSLY OMIT A PRICE ON THE IFB UNDER STEP TWO. THIS IS PARTICULARLY APPLICABLE, ACCORDING TO FAA, WHERE THE ITEM IS OF SMALL VALUE. WHILE THE AGENCY'S INITIAL ESTIMATE FOR THE LAYOUT WAS $3,000, TARGET ENTERED A PRICE OF $200.

FAA BELIEVES THAT THE CASE OF UNIVOX IS STRONGER THAN TM'S BECAUSE, UNLIKE TM, UNIVOX IN ITS TECHNICAL PROPOSAL OFFERED TO FURNISH THE LAYOUT SPECIFIED IN PARAGRAPH 3.11 OF SPECIFICATION FAA-E-1210C. FROM THIS, FAA ASSUMES THAT IN VIEW OF THE MISSING PRICE LINE FOR SUBITEM 10F, UNIVOX BELIEVED THAT THE PRICE FOR THE LAYOUT WAS INCLUDED IN ANOTHER PRICING ITEM.

FAA URGES THAT TM COULD HAVE ASSUMED THE SAME FACTS AS UNIVOX. TM, IN EFFECT, AGREES, STATING THAT PARAGRAPH 3.16 OF SPECIFICATION FAA-E 1210C SHOWS THAT SUBITEM 10F REQUIRES TWO COPIES OF DRAWINGS ALREADY REQUIRED UNDER SUBITEM 10D, FOR WHICH TM BID NO CHARGE; THEREFORE, STATES TM, THE OMISSION CONSTITUTES A MERE INFORMALITY THAT MAY BE WAIVED UNDER SECTION 1 -2.405 OF THE FPR. IN SUPPORT OF ITS CONTENTION TM CITES 52 COMP.GEN. 604 (1973), AND 52 COMP.GEN. 544 (1973).

SECTION 1-2.405 OF THE FPR READS IN PERTINENT PART:

"A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER OF FORM AND NOT OF SUBSTANCE OR PERTAINS TO SOME IMMATERIAL OR INCONSEQUENTIAL DEFECT OR VARIATION OF A BID FROM THE EXACT REQUIREMENT OF THE INVITATION FOR BIDS, THE CORRECTION OR WAIVER OF WHICH WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS. THE DEFECT OR VARIATION IN THE BID IS IMMATERIAL AND INCONSEQUENTIAL WHEN ITS SIGNIFICANCE AS TO PRICE, QUANTITY, QUALITY, OR DELIVERY IS TRIVIAL OR NEGLIGIBLE WHEN CONTRASTED WITH THE TOTAL COST OR SCOPE OF THE SUPPLIES OR SERVICES BEING PROCURED.

WHILE IN 52 COMP.GEN. 544 (1973, CITED BY TM AND BY FAA, WE MADE IT CLEAR THAT NO SPECIFIC VALUE HAS BEEN ESTABLISHED AS THE STANDARD FOR DETERMINING "TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE," THE CASE INVOLVED A FAILURE TO ACKNOWLEDGE AN AMENDMENT AND THE ONLY ISSUE CONSIDERED WAS WHETHER THE OMISSION HAD ANY EFFECT ON THE COMPETITIVE STANDING OF THE BIDDERS. IN 52 COMP.GEN. 886, WHICH WE FIND DISPOSITIVE OF TM'S BID, WE POINTED OUT THAT THE REGULATION PERMITTING WAIVER OR CORRECTION GOES BEYOND CONSIDERATION OF THE IMPACT ON THE RELATIVE STANDING OF BIDDERS AND PRICE, TO INCLUDE IMPACT ON QUALITY, QUANTITY AND DELIVERY. THERE A BIDDER FAILED TO QUOTE A PRICE FOR A FIRST ARTICLE TEST REPORT (VALUE APPROXIMATELY $2,000) IN A $14,000 PROCUREMENT. NO SPACE HAD BEEN PROVIDED TO INSERT A PRICE FOR THE REPORT AND OUR OFFICE FOUND THE BIDDER NONRESPONSIVE AND THE MISTAKE NOT ELIGIBLE FOR WAIVER.

THE SAME RESULT IS REQUIRED HERE. CONTRARY TO CONTENTIONS OF TM THAT THE ITEM IS NOT MATERIAL, FAA ENGINEERS HAVE ADVISED OUR OFFICE THAT WITHOUT THE ITEM, REVERSE ENGINEERING WOULD BE NECESSARY FOR REPAIR AND SUPPORT SERVICES. MOREOVER, AS PARAGRAPH 3.11 OF THE SPECIFICATIONS CONTAINED EXTENSIVE DETAILS REGARDING ITEM 10F, IN ADDITION TO THOSE CONTAINED IN PARAGRAPH 3.16 RELATING TO ITEM 10D, WE DO NOT BELIEVE IT CAN BE SAID THAT ITEM 10F WAS INCLUDED IN THE ITEM 10D PRICING. FURTHER, WE FIND NO CONSISTENT PRICING PATTERN UNDER ITEM 10 OF TM'S BID. COMPARE 52 COMP.GEN. 604 (1973).

WE HAVE RECOGNIZED, AS ASSERTED BY FAA, THAT IN A TWO-STEP PROCUREMENT, A BIDDER EXPENDS MORE EFFORT THAN A BIDDER WHO COMPETES IN A SINGLE-STEP ADVERTISED PROCUREMENT, SO WE HAVE PRESUMED THAT A BIDDER FOUND ACCEPTABLE UNDER STEP ONE WOULD NOT LIKELY DISQUALIFY ITS STEP TWO BID BY INSERTING A CONDITION IN CONTRADICTION WITH ITS ACCEPTED STEP-ONE PROPOSAL AND THE REQUIREMENTS OF THE SPECIFICATIONS. SPECTROLAB, A DIVISION OF TEXTRON, INC., B-180008, JUNE 12, 1974, 74-1 CPD 321. WHERE IN STEP ONE THE BIDDER SPECIFICALLY ADDRESSES THE ITEM OF PROCUREMENT FOR WHICH A PRICE IS OMITTED IN STEP TWO, IT IS CLEAR THAT THE BIDDER INTENDED TO BE BOUND BY THE TERMS THEREOF. COMPARE 52 COMP.GEN. 821, 826 (1973).

THESE PRINCIPLES DO NOT APPLY TO TM'S BID BECAUSE ITS TECHNICAL PROPOSAL FAILED TO ADDRESS THE REQUIREMENT FOR THE LAYOUT. AS A RESULT, TM'S PROPOSAL IS NONRESPONSIVE, DESPITE THE STEP-TWO STATUS OF THE PROCUREMENT. SEE 45 COMP.GEN. 487 (1966). THE FACTS ARE DIFFERENT WITH RESPECT TO UNIVOX.

VOLUME I OF THE TECHNICAL PROPOSAL SUBMITTED BY UNIVOX CONTAINS DETAILED DESCRIPTIONS OF THE PROVISIONING DOCUMENTATION. PARAGRAPH 1.8.7 STATES IN PART THAT "UNIVOX WILL PROVIDE MASTER PATTERNS AND COPIES OF A PLAN VIEW OF THE PARTS LAYOUT FOR EACH PRINTED CIRCUIT BOARD." THE PARAGRAPH GOES ON TO STATE THAT THE MASTER PATTERN AND PLAN VIEW WILL BE DEFINED, AND THE PHOTOGRAPHIC FILM WILL BE SUPPLIED IN ACCORDANCE WITH THE STANDARDS SPECIFIED IN PARAGRAPH 3.11 OF SPECIFICATION FA-E01210C. FROM THIS IT IS CLEAR THAT UNIVOX INTENDED TO BE BOUND BY THE TERMS OF THE SPECIFICATION. UNDER THESE CIRCUMSTANCES IT IS HIGHLY UNLIKELY THAT UNIVOX INTENDED THE OMISSION OF THE PRICE AS A CONDITION QUALIFYING THE OFFER TO SUPPLY THE LAYOUT DESCRIBED IN ITS TECHNICAL PROPOSAL. FOR THE SAME REASON WE DO NOT BELIEVE, AS CONTENDED BY TARGET, THAT THE COVER LETTER OF SEPTEMBER 5, 1978, FROM UNIVOX WAS INTENDED TO QUALIFY THE DELIVERY PREPARATIONS REQUIREMENTS OF ARTICLE XI.

WE CONCLUDE THAT THE OMISSION OF THE PRICE FOR SUBITEM 10F DOES NOT AFFECT THE OBLIGATION OF UNIVOX TO SUPPLY THE LAYOUT, AND THE OMISSION DOES NOT MAKE ITS BID NONRESPONSIVE.