B-215738 ET AL., JUN 10, 1985, 64 COMP.GEN. 593

B-215738 ET AL., JUN 10, 1985, 64 COMP.GEN. 593

BONDS - PERFORMANCE - ADMINISTRATIVE DETERMINATION TO REQUIRE ONE-HUNDRED-PERCENT PERFORMANCE BOND CAN BE REQUIRED FOR JANITORIAL SERVICES CONTRACT WHICH INVOLVES CLEANING OF CONSIDERABLE AMOUNT OF GOVERNMENT PROPERTY, INCLUDING ROOMS CONTAINING ELECTRONIC EQUIPMENT AND SPACECRAFT, AND WHERE UNACCEPTABLE OR LATE PERFORMANCE WOULD BE INTOLERABLE. SUCH A PROPERLY JUSTIFIED BONDING REQUIREMENT DOES NOT UNREASONABLY RESTRICT COMPETITION OR IMPROPERLY PREJUDICE SMALL BUSINESS' BONDING CAPACITY WHERE 12 BIDS WERE RECEIVED ON THE IFB. BIDS - INVITATION FOR BIDS - SPECIFICATIONS - DEFECTIVE - ALLEGATION NOT SUSTAINED PROTESTER HAS NOT MET BURDEN OF PROVING THAT SPECIFICATION FOR JANITORIAL SERVICES IS DEFICIENT BECAUSE ESTIMATED QUANTITIES OR "MANDAYS" NEEDED TO CLEAN CERTAIN BUILDINGS ARE CONS1STENT WITH SIZES OF BUILDINGS. CONTRACTS - PROTESTS - BASIS FOR PROTEST REQUIREMENT GENERAL UNSUPPORTED PROTEST AFTER BID OPENING THAT INVITATION FOR BIDS/(IFB) IS NOT "DEFINITE," "SIMPLE," "COMPREHENSIBLE," OR "UNDERSTANDABLE" AND, THEREFORE, VIOLATIVE OF FEDERAL ACQUISITION REGULATIONS DOES NOT STATE GROUNDS OF PROTEST COGNIZABLE UNDER BID PROTEST PROCEDURES AND IS UNTIMELY IN ANY CASE. CONTRACTS - PROTESTS - INTERESTED PARTY REQUIREMENT - DIRECT INTEREST CRITERION PROTESTER, WHICH ALLEGES THAT AGENCY IMPROPERLY FAILED TO CIRCULATE ITS PRE-BID-OPENING PROTEST TO OTHER PROSPECTIVE BIDDERS FOR COMMENTS, IS NOT "INTERESTED PARTY" UNDER BID PROTEST PROCEDURES TO RAISE THIS ISSUE, SINCE PROTEST IS ESSENTIALLY ON BEHALF OF THESE OTHER BIDDERS. IN ANY CASE, THE PROTESTER HAS NOT INDICATED HOW IT WAS PREJUDICED BY THIS ALLEGED FAILURE. BIDDERS - QUALIFICATIONS - PREAWARD SURVEYS - UTILIZATION - FAILURE TO CONDUCT - JUSTIFICATION REASONABLE AGENCY NEED NOT PERFORM PREAWARD SURVEY ON NON-RESPONSIVE BIDDERS. BIDS - RESPONSIVENESS - FAILURE TO FURNISH SOMETHING REQUIRED - PRICES WHERE AN INVITATION FOR BIDS FOR JANITORIAL SERVICES REQUIRES BIDDERS TO SUBMIT WITH THEIR BIDS A BASE RATE NECESSARY FOR THE OPERATION OF THE ECONOMIC PRICE ADJUSTMENT CLAUSE, WHICH PROVIDES FOR UPWARD AND DOWNWARD PRICE ADJUSTMENTS BASED ON FLUCTUATIONS FROM A BASED RATE QUOTED IN THE SUCCESSFUL BID, BIDS NOT QUOTING THIS RATE MUST BE REJECTED AS NONRESPONSIVE. FAILURE TO PROVIDE SUCH INFORMATION AT BID OPENING IS MATERIAL BECAUSE THE LEGAL RIGHTS OF THE CONTRACTOR AND GOVERNMENT ARE AFFECTED. BIDS - PRICES - ESCALATION - PROVISION - PROPRIETY AN ECONOMIC PRICE ADJUSTMENT CLAUSE IN AN INVITATION FOR BIDS FOR JANITORIAL SERVICES WHICH PROVIDES FOR PRICE ADJUSTMENTS BASED ON FLUCTUATIONS FROM A BASE RATE QUOTED IN THE SUCCESSFUL BID MAY NOT ADEQUATELY PROTECT THE GOVERNMENT'S LEGAL RIGHTS. ALTHOUGH THIS BASE RATE IS SUPPOSED TO BE BASED ON LABOR RATES ON WHICH THE BID PRICE IS BASED, THERE IS AN ECONOMIC INCENTIVE FOR A BIDDER TO SUBMIT A BASE RATE LESS THAN THAT ON WHICH IT BASED ITS BID PRICE TO ENHANCE THE POSSIBILITY OF AN UPWARD PRICE ADJUSTMENT AND MINIMIZE THE POSSIBILITY OF A DOWNWARD PRICE ADJUSTMENT. IN THIS CASE, THE BID BASE RATE OF THE LOW RESPONSIVE BIDDER IS SIGNIFICANTLY LOWER THAN NEXT LOW BIDDER ALTHOUGH THE DIFFERENCE BETWEEN THE BIDS IS NOT SIGNIFICANT; CONSEQUENTLY, VERIFICATION OF THIS BASE RATE SHOULD BE MADE BEFORE AWARD. BIDS - MISTAKES - CORRECTION - CLERICAL ERROR BID, WHICH QUOTED MONTHLY UNIT PRICES INSTEAD OF THE REQUESTED MAN HOUR UNIT PRICES ON AN INVITATION FOR BIDS FOR JANITORIAL SERVICES, MAY BE CORRECTED AS A CLERICAL ERROR OBVIOUS FROM THE FACE OF THE BID, WHERE THE UNIT PRICES QUOTED ARE ONE-TWELFTH OF THE EXTENDED YEARLY PRICES AND THE MAN-HOUR UNIT PRICES ARE EASILY ASCERTAINABLE BY DIVIDING THE TOTAL YEARLY PRICES BY THE ESTIMATED MAN-HOUR QUANTITIES STATED IN THE INVITATION FOR BIDS.

MATTER OF: GALAXY CUSTODIAL SERVICES, INC; GOVERNMENT CONTRACTORS INC; TRINITY SERVICES, INC., JUNE 10, 1985:

GALAXY CUSTODIAL SERVICES, INC., GOVERNMENT CONTRACTORS INC. (GCI), AND TRINITY SERVICES, INC., PROTEST THE PROPOSED AWARD UNDER INVITATION FOR BIDS (IFB) F08650-84-B-0011 TO AMERICAN MAINTENANCE COMPANY. THIS IFB, ISSUED BY THE AIR FORCE, SOLICITED BOTH UNIT AND EXTENDED FIXED PRICE BIDS FOR SIX LINE ITEMS FOR THE PERFORMANCE OF JANITORIAL SERVICES AT THE CAPE CANAVERAL AIR FORCE STATION. THE SOLICITED SERVICES COVERED THE PERIOD OCTOBER 1, 1984, TO SEPTEMBER 30, 1985, WITH TWO PRICED, EVALUATED 1-YEAR OPTIONS. ONLY ONE AWARD IS TO BE MADE UNDER THE IFB.

THE IFB, AS AMENDED, CONTAINS AN ECONOMIC PRICE ADJUSTMENT (EPA) CLAUSE WHICH REQUIRED THE BIDDERS TO PROVIDE CERTAIN INFORMATION WITH THEIR BIDS. NO AWARD HAS BEEN MADE.

WE DISMISS GALAXY'S PROTEST IN PART AND DENY THE REMAINDER. WE DENY GCI'S AND TRINITY'S PROTESTS.

BACKGROUND

ON JANUARY 25, 1984, THE IFB WAS ISSUED, FOLLOWED BY A NUMBER OF AMENDMENTS. ON JULY 9, 1984, GALAXY PROTESTED TO THIS OFFICE. THIS PROTEST CONCERNS THE IFB REQUIREMENT FOR A PERFORMANCE BOND AND CERTAIN ALLEGED INCONSISTENCIES IN THE IFB CONCERNING "MANDAY" REQUIREMENTS AND THE SIZES OF THE BUILDINGS TO BE SERVICED.

WHILE THIS PROTEST WAS PENDING, 12 BIDS WERE RECEIVED AND OPENED ON JULY 24, 1984. THE FOUR LOWEST BIDS, INCLUDING OPTION PRICES, WERE: (BIDS CHART OMITTED).

AT BID OPENING, THE AIR FORCE SPECIFICALLY NOTED THAT GALAXY AND GCI HAD NOT SUPPLIED THE INFORMATION REQUESTED BY THE EPA CLAUSE, AND THAT, THEREFORE, THESE BIDS WERE NONRESPONSIVE AND REJECTED. IN ADDITION, CERTAIN DISCREPANCIES WERE NOTED IN THE UNIT PRICES OF SOME LINE ITEMS IN AMERICAN'S BID. THE AIR FORCE SUBSEQUENTLY DECIDED THAT AMERICAN HAD MADE A MISTAKE IN THESE UNIT PRICES WHICH COULD BE CORRECTED AS AN OBVIOUS CLERICAL ERROR APPARENT FROM THE FACE OF THE BID. THEREFORE, AMERICAN IS CONSIDERED BY THE AIR FORCE TO BE THE SUCCESSFUL BIDDER.

ON JULY 31, 1984, TRINITY PROTESTED AN AWARD TO ANY FIRM OTHER THAN ITSELF. TRINITY'S PRIMARY ARGUMENT WAS THAT AMERICAN'S MISTAKE SHOULD NOT BE CORRECTED, BUT THAT AMERICAN SHOULD BE PERMITTED TO WITHDRAW ITS BID. ON AUGUST 1, 1984, GCI PROTESTED THE REJECTION OF ITS BID AS NONRESPONSIVE. GCI ARGUED THAT ITS FAILURE TO FURNISH THE REQUESTED EPA CLAUSE INFORMATION COULD BE WAIVED AS A MINOR INFORMALITY. ON AUGUST 3, 1984, GALAXY SUBMITTED A NUMBER OF ADDITIONAL PROTEST GROUNDS AS DISCUSSED BELOW.

GALAXY'S PROTEST

GALAXY TIMELY PROTESTS THE IFB REQUIREMENT FOR A 100-PERCENT PERFORMANCE BOND. GALAXY NOTES THAT THE IFB IS SET ASIDE FOR SMALL BUSINESS AND ALLEGES THAT IF THIS LARGE PERFORMANCE BOND IS REQUIRED, IT WOULD BE VIRTUALLY IMPOSSIBLE FOR A SMALL BUSINESS TO SECURE BONDING ON OTHER PROCUREMENTS.

ALTHOUGH A BOND REQUIREMENT MAY IN SOME CIRCUMSTANCES RESULT IN A RESTRICTION OF COMPETITION, IT NEVERTHELESS CAN BE A NECESSARY AND PROPER MEANS OF SECURING TO THE GOVERNMENT FULFILLMENT OF THE CONTRACTOR'S OBLIGATIONS UNDER THE CONTRACT IN APPROPRIATE CIRCUMSTANCES. RENAISSANCE EXCHANGE, INC., B-216049, NOV. 14, 1984, 84-2 CPD PARA. 534. BONDS ARE REQUIRED FOR CONSTRUCTION CONTRACTS BY STATUTE. UNDER DEFENSE ACQUISITION REGULATION (DAR) SEC. 10-104.2 REPRINTED IN 32 C.F.R. PTS. 1-39 (1984), PERFORMANCE BONDS MAY BE REQUIRED ON NONCONSTRUCTION CONTRACTS "WHEN THE TERMS OF THE CONTRACT PROVIDE FOR THE CONTRACTOR TO HAVE THE USE OF GOVERNMENT MATERIAL, PROPERTY OR FUNDS AND FURTHER PROVIDES FOR THE HANDLING THEREOF BY THE CONTRACTOR IN A SPECIFIED MANNER" OR FOR FINANCIAL REASONS WHERE IT "IS NECESSARY TO PROTECT THE INTERESTS OF THE GOVERNMENT.

THIS CONTRACT INVOLVES THE USE AND CLEANING OF A CONSIDERABLE AMOUNT OF GOVERNMENT PROPERTY, INCLUDING ROOMS WHICH CONTAIN HIGHLY SOPHISTICATED ELECTRONIC EQUIPMENT AND SPACECRAFT, WHERE A CONSIDERABLE DEGREE OF CARE AND SPECIALIZATION IS REQUIRED BECAUSE OF THE NEED FOR A "PARTICLE FREE ENVIRONMENT." THE AIR FORCE INDICATES THAT UNACCEPTABLE OR LATE PERFORMANCE ON THIS CONTRACT CANNOT BE TOLERATED BECAUSE THAT COULD DELAY MISSILE LAUNCHES OR CONTAMINATE MISSILE "PAYLOADS."

WE HAVE HELD THAT WHERE A DECISION TO REQUIRE BONDING ON NONCONSTRUCTION CONTRACTS IS REASONABLE AND MADE IN GOOD FAITH, WE WILL NOT DISTURB SUCH A DETERMINATION, AND THAT THE PROTESTER BEARS THE BURDEN OF DEMONSTRATING THAT THE DETERMINATION IS UNREASONABLE OR IN BAD FAITH. K. H. SERVICES, B-212172, SEPT. 15, 1983, 83-2 CPD PARA. 329; WRIGHT'S AUTO REPAIR & PARTS, INC., B-210680.2, JUNE 28, 1983, 83-2 CPD PARA. 34. DETERMINATION THAT CONTINUOUS OPERATIONS ARE ABSOLUTELY REQUIRED, AS WAS EFFECTIVELY MADE HERE, ITSELF IS A REASONABLE BASIS FOR REQUIRING A PERFORMANCE BOND. RENAISSANCE EXCHANGE, INC., B-216049, SUPRA. MOREOVER, 12 BIDS, INCLUDING GALAXY'S, WERE RECEIVED FROM SMALL BUSINESSES UNDER THE IFB. THIS IS STRONGLY INDICATIVE THAT THIS WAS NOT AN UNREASONABLE RESTRICTION OF COMPETITION. SEE EXECUTIVE-SUITE SERVICES, INC., B-212416, MAY 29, 1984, 84-1 CPD PARA. 577; CANTU SERVICES, INC., B-208148.2, DEC. 6, 1982, 82-2 CPD PARA. 507. CONSEQUENTLY, FROM OUR REVIEW, WE BELIEVE THAT THE AIR FORCE BOND REQUIREMENTS WERE JUSTIFIED AND NOT UNREASONABLY RESTRICTIVE OF COMPETITION. GALAXY'S PROTEST ON THIS POINT IS DENIED.

GALAXY ALSO PROTESTS THAT A BIDDER DOES NOT KNOW, WHEN IT BIDS ON THE IFB, THE AMOUNT OF THE PERFORMANCE BOND REQUIRED BECAUSE THE CONTRACT PRICE IS ADJUSTED BIWEEKLY AS PAYMENTS ARE MADE. WE FIND NO AMBIGUITY AS TO THE AMOUNT OF THE 100-PERCENT PERFORMANCE BOND THAT WILL BE REQUIRED IN THIS CASE, THE TOTAL BID PRICE FOR THE BASIC 1-YEAR CONTRACT PERIOD. THE CONTRACT PRICE DOES NOT CHANGE BASED ON THE BIWEEKLY PAYMENTS AS ALLEGED BY GALAXY. BECAUSE SOME OF THE LINE ITEMS ARE BASED ON ESTIMATED QUANTITIES, THE CONTRACT PRICE MAY EVENTUALLY CHANGE IF THE ESTIMATED QUANTITIES TURN OUT TO BE DIFFERENT FROM THE QUANTITIES EVENTUALLY PERFORMED. HOWEVER, THIS CHANGE IN CONTRACT VALUE WOULD NOT AFFECT THE AMOUNT OF THE INITIAL 100-PERCENT PERFORMANCE BOND.

GALAXY ALSO PROTESTS THAT THE IFB WAS DEFICIENT BECAUSE CERTAIN SPECIFIED "MANDAYS" NEEDED TO CLEAN CERTAIN BUILDINGS ARE INCONSISTENT WITH THE SIZES OF THESE BUILDINGS. GALAXY CITES A NUMBER OF EXAMPLES TO SUPPORT THIS ALLEGATION. HOWEVER, THE AIR FORCE INDICATES THERE ARE NO INCONSISTENCIES BECAUSE SOME OF THE BUILDINGS ARE OPEN SPACES (HANGARS) AND SOME ARE OFFICES. IT IS APPARENT THAT MORE SQUARE FEET CAN BE CLEANED IN OPEN SPACES THAN IN OFFICES IN THE SAME PERIOD OF TIME. FROM OUR REVIEW, WE DO NOT BELIEVE GALAXY HAS MET ITS BURDEN OF SHOWING THAT THE ESTIMATED MANDAYS" OR BUILDING SQUARE FOOTAGE IS ERRONEOUS OR INCONSISTENT. SEE GULF COAST DEFENSE CONTRACTORS, INC., B-212641, FEB. 28, 1984, 84-1 CPD PARA. 243. CONSEQUENTLY, GALAXY'S PROTEST ON THIS POINT IS DENIED.

GALAXY'S SUPPLEMENTAL PROTEST

IN ITS AUGUST 3, 1984, PROTEST, GALAXY CONTENDS THAT THE IFB WAS NOT "DEFINITE," "SIMPLE," "COMPREHENSIBLE," OR "UNDERSTANDABLE" AND THAT, THEREFORE, IT VIOLATES THE FEDERAL ACQUISITION REGULATION (FAR). GALAXY ONLY EXPANDED ON THIS PROTEST BASIS BY REFERENCING THE VARIOUS NONRESPONSIVE BIDS AND THE PROPOSED AWARD TO AMERICAN. THESE GENERAL UNSUPPORTED ASSERTIONS DO NOT STATE GROUNDS OF PROTEST COGNIZABLE UNDER OUR BID PROTEST PROCEDURES. ALICE ROOFING, B-216277, SEPT. 18, 1984, 84-2, CPD PARA. 321; JOHN CRANE HOUDAILLE, INC., B-212829.2, DEC. 16, 1983, 83-2 CPD PARA. 698. IN ANY CASE, THESE GROUNDS OF PROTEST ARE NOT TIMELY UNDER OUR BID PROCEDURES, SINCE THEY WERE NOT ASSERTED PRIOR TO THE BID OPENING DATE, 4 C.F.R. 21.2(B)(1) (1984). GALAXY'S PROTEST ON THIS BASIS IS DISMISSED.

GALAXY ALSO PROTESTS THAT AGENCY IMPROPERLY FAILED TO CIRCULATE ITS INITIAL PROTEST TO ALL PROSPECTIVE BIDDERS PRIOR TO BID OPENING SO THEY COULD SUBMIT RELEVANT COMMENTS TO THIS OFFICE. SECTION 21.1(A) OF OUR BID PROTEST PROCEDURES, 4 C.F.R. SEC. 21.1(A) (1984), REQUIRES THAT IN ORDER FOR A PROTEST TO BE CONSIDERED BY OUR OFFICE, A PROTESTER MUST BE AN "INTERESTED PARTY." THIS PROTEST BASIS IS ESSENTIALLY ON BEHALF OF OTHER POTENTIAL BIDDERS, WHICH COULD BE ADVERSELY AFFECTED BY THE GALAXY PROTEST. THESE OTHER FIRMS WOULD BE THE PROPER INTERESTED PARTIES TO COMPLAIN ABOUT THEIR FAILURE TO BE NOTIFIED OF GALAXY'S PROTEST. SUPERIOR BOILER WORKS, INC.; CONSERVCO, INC., B-215836, ET AL., DEC. 6, 1984, 84-2 CPD PARA. 633. UNDER THESE CIRCUMSTANCES, GALAXY'S PROTEST ON THIS POINT IS DISMISSED. IN ANY CASE, GALAXY HAS NOT INDICATED HOW IT WAS PREJUDICED BY A FAILURE OF THE AGENCY TO NOTIFY OTHER POTENTIAL BIDDERS OF ITS PROTEST. SEE SEARLE CT SYSTEMS, B-191307, JUNE 13, 1978, 78-1 CPD PARA. 433.

GALAXY ALSO PROTESTS THAT THE AIR FORCE IS RENEGING ON ITS EARLIER COMMITMENT THAT IT WOULD PERFORM A PREAWARD EVALUATION OF THE THREE LOW BIDDERS TO DETERMINE THEIR ABILITY TO PERFORM THE CONTRACT WORK. INDICATED BELOW, GALAXY'S BID WAS PROPERLY FOUND TO BE NONRESPONSIVE. USEFUL PURPOSE IS SERVED IN REVIEWING A NONRESPONSIVE BIDDER'S RESPONSIBILITY. CONSEQUENTLY, THE AIR FORCE'S FAILURE TO PERFORM SUCH A SURVEY ON GALAXY WAS ENTIRELY APPROPRIATE. SEE ITE IMPERIAL CORPORATION, SUBSIDIARY OF GOULD, INC., B-190759, AUG. 14, 1978, 78-2 CPD PARA. 116 AT 16; SEAL-O-MATIC DISPENSER CORPORATION, B-187199, JUNE 7, 1977, 77-1 CPD PARA. 399 AT 6.

GALAXY HAS NEVER SPECIFICALLY PROTESTED THE AIR FORCE'S REJECTION OF ITS BID AS NONRESPONSIVE FOR FAILING TO SUPPLY THE INFORMATION REQUESTED BY THE EPA CLAUSE. HOWEVER, IT HAS TIMELY PROTESTED THE AIR FORCE'S FAILURE TO PROVIDE IT WITH WRITTEN REASONS AS TO WHY ITS BID WAS REJECTED. THE AIR FORCE INDICATES THAT GALAXY'S REPRESENTATIVE WAS AT BID OPENING WHEN THE CONTRACTING OFFICER ANNOUNCED THAT GALAXY'S BID WAS NONRESPONSIVE. ALSO, THE AIR FORCE CORRECTLY INDICATES THAT NO REGULATION REQUIRES SUCH A WRITTEN NOTIFICATION. CONSEQUENTLY, GALAXY'S PROTEST ON THIS POINT IS DENIED.

GCI'S PROTEST

GALAXY'S AND GCI'S BIDS WERE REJECTED AS NONRESPONSIVE FOR FAILING TO PROVIDE CERTAIN INFORMATION REQUESTED BY THE EPA CLAUSE. GCI TIMELY PROTEST THIS DETERMINATION. SINCE THE REASONS FOR BID REJECTION ARE THE SAME FOR BOTH GALAXY'S AND GCI'S BIDS, THE FOLLOWING ANALYSIS IS APPLICABLE TO BOTH BIDS.

THE EPA CLAUSE ESSENTIALLY PROVIDES A SYSTEM FOR POSTAWARD PRICE ADJUSTMENTS BASED ON PARTICULAR PRICE FLUCTUATIONS. THE BASIC PURPOSE OF AN EPA PROVISION IS TO PROTECT THE GOVERNMENT IN CASE OF A DECREASE IN THE COST OF LABOR OR MATERIAL AND THE CONTRACTOR IN THE EVENT OF AN INCREASE. SENTINEL ELECTRONICS, INC., B-212770, DEC. 20, 1983, 84-1 CPD PARA. 5; AMERICAN TRANSPARENTS PLASTIC CORPORATION, B-210898, NOV. 8, 1983, 83-2 CPD PARA. 539.

THE EPA CLAUSE IN THIS CASE WAS PARTICULARLY COMPLEX AND WAS INCLUDED IN AN AMENDMENT TO THE IFB PURSUANT TO A SPECIAL DEVIATION TO THE DAR. UNDER THIS CLAUSE, BIDDERS WERE REQUESTED TO PROVIDE CERTAIN DATA WITH THEIR BIDS AND WERE CAUTIONED AS FOLLOWS:

AGAIN, BIDDERS ARE REMINDED TO COMPLETE THE BLANKS WHICH APPEAR IN *** THE REVISED CLAUSE. FAILURE BY THE BIDDER TO FURNISH THE INFORMATION WHICH IS REQUIRED TO BE SHOWN IN THESE BLANKS SHALL CAUSE THE BID TO BE CONSIDERED NONRESPONSIVE AND IT SHALL BE REJECTED. IF ANY BIDDER HAS ANY QUESTIONS REGARDING THIS CLAUSE, HE OR SHE SHOULD CONTACT THE BUYER ***.

THE INFORMATION SOLICITED WAS A "BASE COMPOSITE WEIGHTED AVERAGE LABOR RATE" FOR THE FIRST OPTION YEAR (HEREINAFTER "BASE RATE") AND "BASE QUANTITY OF SCA (SERVICE CONTRACT ACT)-- EMPLOYEE DIRECT LABOR HOURS" (HEREINAFTER "BASE HOURS") FOR BOTH THE FIRST AND SECOND OPTION YEARS. EPA CLAUSE INFORMATION WAS SOLICITED FOR THE BASIC CONTRACT PERIOD BECAUSE THERE WAS NO PROVISION FOR AN EPA PRICE ADJUSTMENT FOR THAT PERIOD. THE IFB DEFINES THE "BASE RATE" AS THE RESULT OF DIVIDING THE TOTAL BID SCA- EMPLOYEE DIRECT LABOR DOLLARS, INCLUDING FRINGE BENEFITS, FOR THE BASIC CONTRACT PERIOD BY THE TOTAL SCA-EMPLOYEE DIRECT LABOR HOURS BID FOR THAT PERIOD. THE BASE HOURS TO BE FURNISHED WITH THE BID ARE THE LABOR HOURS BID FOR SCA EMPLOYEES FOR EACH OPTION PERIOD. PRESUMABLY, BIDDERS ARE SUPPOSED TO CALCULATE THE BASE RATE AND BASE HOURS FROM THEIR INDIVIDUAL BID WORKSHEETS ON WHICH THEY BASED THEIR BID AND OPTION PRICES.

THE EPA CLAUSE PROVIDES FOR BOTH UPWARD AND DOWNWARD PRICE ADJUSTMENTS FOR THE OPTION PERIODS IF TWO SEPARATE "TRIGGERBAND ARRANGEMENTS" ARE SATISFIED. THAT IS, A PRICE ADJUSTMENT WOULD ONLY BE CALLED FOR IF (1) THE ACTUAL COMPOSITE WEIGHTED AVERAGE LABOR RATE (THE LABOR DOLLARS ACTUALLY INCURRED DIVIDED BY THE DIRECT LABOR HOURS FOR THE OPTION PERIOD) (HEREINAFTER "ACTUAL RATE") DIFFERED BY ONE PERCENT OR MORE FROM THE BASE RATE BID AND (2) IF THE AVERAGE CONSUMER PRICE INDEX FOR URBAN WAGE EARNERS AND CLERICAL WORKERS FOR THE INITIAL CONTRACT PERIOD DIFFERED BY ONE PERCENT OR MORE FROM THE AVERAGE INDEX RATE FOR THE OPTION PERIOD. BOTH THESE THRESHOLDS ARE SATISFIED, THE EPA CLAUSE THEN PROVIDES FOR AN UPWARD OR DOWNWARD PRICE ADJUSTMENT. THE AMOUNT OF THIS ADJUSTMENT IS BASED ON CALCULATION INVOLVING THE BASE RATE AND THE ACTUAL RATE AND THE BASE HOURS OR ACTUAL HOURS WORKED, OR THE AFOREMENTIONED CONSUMER PRICE INDICES AND BASE OR ACTUAL HOURS WORKED, WHICHEVER IS LESS. WHERE AN IFB CONTAINING AN EPA CLAUSE CLEARLY AND UNEQUIVOCABLY ADVISES THAT CERTAIN INFORMATION NECESSARY TO THE IMPLEMENTATION AND OPERATION OF THE EPA CLAUSE IS REQUIRED WITH A BID IN ORDER FOR THE BID TO BE CONSIDERED RESPONSIVE, A BIDDER WHICH FAILS TO PROVIDE SUCH INFORMATION BY BID OPENING MUST BE REJECTED AS NONRESPONSIVE. PATRIOT OIL, INC., B-191607, SEPT. 7, 1978, 78-2 CPD PARA. 177. CONTRAST ASHLAND CHEMICAL COMPANY, B-206882, JAN. 18, 1983, 83-1 CPD PARA. 57, AND ROARDA, INC., B-204524.5, MAY 7, 1982, 82-1 CPD PARA. 438, WHERE LOW BIDS WERE PROPERLY CONSIDERED RESPONSIVE, DESPITE FAILING TO PROVIDE CERTAIN EPA CLAUSE INFORMATION, BECAUSE THE IFB'S DID NOT CLEARLY REQUIRE THE ABSENT INFORMATION. IN THIS CASE, THE IFB CLEARLY REQUIRES SPECIFIC INFORMATION WITH THE BID TO IMPLEMENT THE EPA CLAUSE AND WARNS THAT THE BID WILL BE REJECTED AS NONRESPONSIVE IF IT DOES NOT DO SO.

GCI ARGUES THAT THE FAILURE TO PROVIDE THE EPA CLAUSE INFORMATION DOES NOT RELATE TO BID RESPONSIVENESS BECAUSE THE REQUESTED INFORMATION IN NO WAY AFFECTS WHAT THE BIDDER IS BOUND TO PERFORM OR ANY OTHER ASPECT OF THE BIDDER'S COMPLIANCE WITH THE IFB PROVISIONS. GCI ARGUES THAT A MATTER WHICH DOES NOT RELATE TO BID RESPONSIVENESS CANNOT BE USED TO REJECT BIDS AS NONRESPONSIVE. HOWEVER, WE HAVE CONSISTENTLY RECOGNIZE THAT A BID IS ALSO NONRESPONSIVE IF A BID EFFECTIVELY LIMITS THE BIDDER'S LIABILITY TO THE GOVERNMENT UNDER THE IFB. SEE HEWLETT PACKARD COMPANY, B-216530, FEB. 13, 1985, 85-1 CPD PARA. 193. THE EPA CLAUSE IS A MATERIAL CONTRACT PROVISION WHICH SIGNIFICANTLY AFFECTS THE LEGAL RIGHTS OF THE GOVERNMENT AND THE LEGAL OBLIGATIONS OF THE CONTRACTOR. AQUA-TROL CORP. B-191648, JULY 14, 1978, 78-2 CPD PARA. 41; PATRIOT OIL, INC., B-191607, SUPRA.

GCI ARGUES THAT THE ONLY RESULT OF NOT FURNISHING THE BASE RATE AND BASE HOURS FOR THE EPA CLAUSE WOULD BE THAT A CONTRACTOR MAY NOT THEN BE ENTITLED TO A PRICE ADJUSTMENT UNDER THE EPA CLAUSE. HOWEVER, THE MOST NOTABLE MATERIAL LEGAL OBLIGATION OF THE CONTRACTOR TO THE GOVERNMENT UNDER THE EPA PROVISION IS THE POSSIBILITY OF A DOWNWARD CONTRACT PRICE ADJUSTMENT. EVEN ASSUMING THAT THE POSSIBILITY OF A DOWNWARD ADJUSTMENT IS REMOTE IN THIS CASE, WE HAVE HELD THAT IF THE GOVERNMENT IS PRECLUDED FROM MAKING SUCH AN ADJUSTMENT, THIS WOULD MATERIALLY CHANGE THE LEGAL RIGHTS OF THE PARTIES. SEE AQUA-TROL CORPORATION, B-191648, SUPRA (FAILURE TO ACKNOWLEDGE IFB AMENDMENT ADDING AN EPA CLAUSE CANNOT BE WAIVED AS MINOR INFORMALITY).

FURTHER, IN THIS CASE, THE EPA PRICE ADJUSTMENT FIGURES WERE NOT TO BE CONSIDERED IN DETERMINING THE LOW BID. IN VIEW OF THIS FACT, GCI CITES ROARDA INC., B-204524.5, SUPRA, TO SUPPORT ITS POSITION THAT ITS BID IS RESPONSIVE. GCI ARGUES THAT ROARDA HOLDS THAT THE EPA PRICE ADJUSTMENT MUST BE PART OF THE AGENCY'S DETERMINATION OF THE LOW BID PRICE IN ORDER TO AFFECT BID RESPONSIVENESS. IN ROARDA, THE LOW BID WAS FOUND TO BE RESPONSIVE DESPITE FAILING TO PROVIDE CERTAIN INFORMATION RELATING TO OPERATION OF THE EPA CLAUSE. WE DID MENTION IN THAT DECISION THAT THE EPA PRICE ADJUSTMENT DATA WAS NOT TO BE PART OF THE DETERMINATION OF THE LOW BID. HOWEVER, AS WE INDICATED IN ASHLAND CHEMICAL CO., B-206882, SUPRA, AT 3-4, THE ROARDA CASE DID NOT TURN ON THIS POINT; RATHER, WE STATED THAT ROARDA TURNED ON THE FACT THAT THE EPA CLAUSE DID NOT REQUIRE THE MISSING INFORMATION TO BE SUPPLIED WITH THE BID SO THE BID COULD NOT BE REJECTED AS NONRESPONSIVE.

GCI ARGUES THAT SUPPLYING THE BASE HOURS AND BASE RATE WITH THE BID SERVES NO USEFUL PURPOSE, SINCE ACTUAL OPTION HOURS CAN BE USED UNDER THE EPA CLAUSE IN LIEU OF THE BASE HOURS TO ALLOW THE CLAUSE TO OPERATE AND SINCE THE BASE RATE IS EASILY DETERMINABLE BY A SIMPLE MATHEMATICAL EXERCISE. WE WILL NOT DISCUSS THE MATTER OF THE FAILURE TO PROVIDE THE BASE HOURS SINCE THE OMISSION OF THE BASE RATE WITH THE BID WOULD CLEARLY RENDER A BID NONRESPONSIVE AS DISCUSSED BELOW.

IN THIS CASE, THE BASE RATE TO BE SUPPLIED BY THE BIDDER WITH ITS BID IS ESSENTIAL BOTH FOR DETERMINING WHETHER THE "TRIGGERBAND" PERCENTAGE DIFFERENTIAL, WHICH WOULD CALL FOR A PRICE ADJUSTMENT, HAS BEEN SATISFIED AND THE AMOUNT OF THE PRICE ADJUSTMENT. THE FAILURE TO SUPPLY A BASE RATE MEANS THAT THE SPECIFIED EPA CLAUSE PRICE ADJUSTMENT MECHANISM CANNOT OPERATE. COST OF LIVING INDEX CHANGES COULD PRECLUDE OR LIMIT PRICE ADJUSTMENTS UNDER THE EPA CLAUSE. HOWEVER, IN ORDER FOR THE EPA CLAUSE TO OPERATE AS ADVERTISED, THE BASE RATE IS NECESSARY.

FURTHER, THE ALLEGEDLY SIMPLE MATHEMATICAL EXERCISE TO DETERMINE THE BASE RATE CAN ONLY BE DONE BY REFERRING TO THE BIDDER'S WORKPAPERS USED TO PREPARE ITS BID, INFORMATION NOT SUBMITTED WITH THE BID. SINCE THE MATTER IS MATERIAL AND BIDDERS WERE CLEARLY ADVISED OF THE NEED TO SUPPLY THE BASE RATE WITH THE BID, THE FAILURE TO PROVIDE SUCH INFORMATION WITH THE BID AFFECTS THE LEGAL RIGHTS OF THE PARTIES, SUCH THAT THE ACCEPTANCE OF A BID WITHOUT THIS INFORMATION WOULD, BY ITS NATURE, BE PREJUDICIAL TO THE OTHER BIDDERS. HEWLETT-PACKARD COMPANY, B-216530, SUPRA; AQUA-TROL CORP., B-191648, SUPRA. UNDER SUCH CIRCUMSTANCES, IT WOULD BE IMPERMISSIBLE TO ALLOW A BIDDER TO MAKE ITS BID RESPONSIVE BY SUBMITTING THIS INFORMATION AFTER BID OPENING. SEE HEWLETT-PACKARD CO., B-216530, SUPRA.

IN VIEW OF THE FOREGOING, GALAXY'S AND GCI'S BIDS WERE PROPERLY REJECTED AS NONRESPONSIVE AND GCI'S PROTEST IS DENIED.

VERIFICATION OF AMERICAN'S EPA CLAUSE DATA

NOTWITHSTANDING THE FOREGOING, WE ARE CONCERNED THAT THE EPA CLAUSE IN THIS IFB COULD PERMIT AN AWARD WHICH WOULD NOT ADEQUATELY PROTECT THE GOVERNMENT'S LEGAL RIGHTS UNDER THIS CLAUSE. SEE HAMPTON METROPOLITAN OIL CO.; UTILITY PETROLEUM, INC., B-186030, ET AL., DEC. 9, 1976, 76-2 CPD PARA. 471. SPECIFICALLY, THERE WOULD SEEM TO BE SOME ECONOMIC INCENTIVE FOR A BIDDER TO SUBMIT A BASE RATE LESS THAN THAT ON WHICH IT ACTUALLY BASED ITS BID WITH THE HOPE OF ENHANCING THE POSSIBILITY OF AN UPWARD PRICE ADJUSTMENT UNDER THE EPA CLAUSE AND MINIMIZING THE POSSIBILITY OF A DOWNWARD PRICE ADJUSTMENT.

IN THIS CASE, AMERICAN HAS PROPOSED A SIGNIFICANTLY LOWER BASE RATE AND LESS BASE HOURS THAN TRINITY, ALTHOUGH THE DIFFERENCE BETWEEN THEIR BID PRICES IS NOT SIGNIFICANT. FURTHER, ALTHOUGH AMERICAN SUBMITTED ITS BID WORKSHEETS TO SUPPORT ITS MISTAKE IN BID CLAIM, THE BASIS FOR THE BASE RATE QUOTED IN AMERICAN'S BID IS NOT APPARENT FROM THOSE WORKSHEETS. INACCURATE BASE RATE COULD PREJUDICE THE GOVERNMENT'S RIGHTS UNDER THE EPA CLAUSE. SEE HOLLAND OIL CO., ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA), NO. 26603, JUNE 21, 1982, REPRINTED IN 82 1 BCA PARA. 15908 (CCH 1982); FERMONT DIVISION, DYNAMICS CORPORATION OF AMERICA, ASBCA NO. 21949, MARCH 19, 1979, REPRINTED IN 82-1 BCA PARA. 13774 (CCH 1982), WHERE THE GOVERNMENT WAS HELD BOUND TO ERRONEOUS EPA INDEX RATES BY VIRTUE OF ACCEPTANCE OF THE BIDS.

THEREFORE, WE BELIEVE THAT THE AIR FORCE, IN DETERMINING AMERICAN'S RESPONSIBILITY, SHOULD TAKE WHATEVER STEPS ARE APPROPRIATE TO SATISFY ITSELF THAT AMERICAN'S BASE RATE AND BASE HOURS ARE NOT TOO LOW, SUCH THAT THE GOVERNMENT'S RIGHTS UNDER THE EPA CLAUSE WOULD BE PREJUDICED, BEFORE IT MAKES AN AWARD TO AMERICAN. SEE HAMPTON METROPOLITAN CO., INC.; UTILITY PETROLEUM, INC., B-188030, ET AL., SUPRA. IF AMERICAN'S BASE RATES OR BASE HOURS ARE SO UNARGUABLY FALSE AS TO AMOUNT TO FRAUD, IT WOULD BE APPROPRIATE TO REJECT ITS BID.

TRINITY'S PROTEST

TRINITY PROTESTS ANY AWARD TO A BIDDER OTHER THAN ITSELF. TRINITY'S PROTEST CONCERNS THE DISCREPANCIES BETWEEN AMERICAN'S UNIT PRICES AND THE TOTAL EXTENDED PRICES FOR A NUMBER OF THE IFB LINE ITEMS.

AMERICAN'S BID FOR THE BASIC CONTRACT PERIOD WAS AS FOLLOWS (AMERICAN FILLED IN BLANKS): BIDS. (BID CHART OMITTED).

FAR, 48 C.F.R. SEC. 14.406-2 (1984), PROVIDES THAT "ANY CLERICAL MISTAKE, APPARENT ON ITS FACE IN THE BID, MAY BE CORRECTED BY THE CONTRACTING OFFICER BEFORE AWARD." AMERICAN CLAIMS THAT IT MADE A CORRECTABLE CLERICAL ERROR BY QUOTING MONTHLY UNIT PRICES RATHER THAN MAN-HOUR UNIT PRICES FOR LINE ITEMS 01AC, 01AD, 01AE, AND 01AF, BUT HAT THE TOTAL EXTENDED AMOUNTS FOR THOSE LINE ITEMS WERE CORRECT. TRINITY ALLEGES THAT IT WOULD BE IMPROPER TO PERMIT CORRECTION OF AMERICAN'S BID BECAUSE THIS WOULD PREJUDICE THE COMPETITIVE BID SYSTEM AND TRINITY, BUT THAT AMERICAN SHOULD BE PERMITTED TO WITHDRAW ITS BID.

IN THIS CASE, THE UNIT PRICES FOR THE LINE ITEMS IN QUESTION ARE EXACTLY ONE-TWELFTH OF THE TOTAL YEARLY AMOUNT AND ARE CONSIDERABLY MORE THAN WHAT A MAN-HOUR UNIT PRICE WOULD BE. CONSEQUENTLY, IT IS APPARENT THAT THESE UNIT PRICES ARE MONTHLY PRICES. MOREOVER, THE MAN HOUR, UNIT PRICES FOR THESE LINE ITEMS ARE EASILY ASCERTAINABLE SIMPLY BY DIVIDING THE TOTAL LINE ITEM PRICE BY THE STATED ESTIMATED MAN-HOUR QUANTITY. IN THIS CASE, THE ROUNDED-OFF UNIT PRICES WOULD BE $11.60 PER MAN-HOUR FOR LINE ITEM 01AC, $12.33 PER MAN-HOUR FOR LINE ITEM 01AD, $14.97 PER MAN-HOUR 01AF. UNDER THESE CIRCUMSTANCES, WE BELIEVE THAT CORRECTION OF AMERICAN'S UNIT PRICES IS PROPER. SEE ATLANTIC MAINTENANCE COMPANY, 54 COMP.GEN. 686, (1975), 75-1 CPD PARA. 108 (BID WHICH ERRONEOUSLY QUOTED MONTHLY UNIT PRICE FOR A LINE ITEM INSTEAD OF THE REQUESTED SQUARE FOOTAGE UNIT PRICE MAY BE CORRECTED BY DIVIDING THE TOTAL LINE ITEM PRICE BY THE STATED ESTIMATED SQUARE FOOTAGE); DEPENDABLE JANITORIAL SERVICE AND SUPPLY CO., B-188812, JULY 13, 1977, 77-2 CPD PARA. 20 (BID WHICH ERRONEOUSLY QUOTED SQUARE FOOTAGE PRICE FOR LINE ITEM INSTEAD OF THE REQUESTED MONTHLY UNIT PRICE MAY BE CORRECTED BY DIVIDING THE TOTAL YEARLY PRICE FOR THE LINE ITEM BY 12); FEDERAL AVIATION ADMINISTRATION-- BID CORRECTION, B-187220, OCT. 8, 1976, 76-2 CPD PARA. 326 (BID WHICH ERRONEOUSLY INSERTED OBVIOUSLY EXCESSIVE LINEAR FOOT UNIT PRICE ON ONE LINE ITEM MAY BE CORRECTED BY DIVIDING THE TOTAL LINE ITEM PRICE BY THE STATED ESTIMATED LINEAR FOOTAGE).

TRINITY REFERENCES THE LANGUAGE IN STANDARD FORM 33A WHICH HAD BEEN INCORPORATED BY REFERENCE INTO THE IFB, WHICH STATES "IN CASE OF DISCREPANCY BETWEEN A UNIT PRICE AND EXTENDED PRICE, THE UNIT PRICE WILL BE PRESUMED TO BE CORRECT, SUBJECT, HOWEVER, TO CORRECTION TO THE SAME EXTENT OR IN THE SAME MANNER AS ANY OTHER MISTAKE." HOWEVER, WE HAVE HELD THAT EXTENDED BID PRICES SHOULD GOVERN, WHERE, AS HERE, THE UNIT PRICES ARE CLEARLY ERRONEOUS, EVEN WHERE THIS LANGUAGE IS INCLUDED IN THE IFB. MILLER DISPOSAL SERVICES, INC., B-205715, JUNE 7, 1982, 82-1 CPD PARA. 543 AT 5-6.

TRINITY CITES 35 COMP.GEN. 33 (1955) AND RAJ CONSTRUCTION, INC., B-191708, MAR. 1, 1979, 79-1 CPD PARA. 140, TO SUPPORT ITS POSITION THAT IT WOULD BE IMPROPER TO PERMIT BID CORRECTION IN THIS CASE. HOWEVER, IN BOTH THOSE CASES THE LOW BIDDER SUBMITTED OBVIOUSLY "RIDICULOUSLY" LOW UNIT PRICES FOR ONE IFB LINE ITEM AND THE BIDDERS THEN ATTEMPTED TO REFUSE AN UPWARD CORRECTION OF THESE UNIT PRICES BECAUSE THE CORRECTION WOULD NO LONGER MAKE THEM THE LOW BIDDER. THAT IS NOT THE CASE HERE.

THEREFORE, TRINITY'S PROTEST IS DENIED. HOWEVER, THE APPROPRIATE UNIT PRICES FOR THESE LINE ITEMS ARE REQUIRED TO BE ADDED TO THE CONTRACT AT THE TIME OF AWARD. SEE FAR, 48 C.F.R. SEC. 4.406-2(B).