B-157894, NOV. 30, 1965

B-157894, NOV. 30, 1965

TO R. MULLER CONSTRUCTION CORPORATION:

YOUR LETTER OF OCTOBER 19, 1965, PROTESTS THE REJECTION OF YOUR BID ON GENERAL SERVICES ADMINISTRATION (GSA) PROJECT NO. 58528, ON THE GROUND THAT YOU HAD FAILED TO ACKNOWLEDGE AN AMENDMENT TO THE INVITATION FOR BIDS (IFB) RELATING TO MINIMUM WAGE RATES FIXED BY THE SECRETARY OF LABOR.

THE IFB, DATED AUGUST 9, 1965, AND BEARING THE SAME IDENTIFYING NUMBER AS THE PROJECT, SOLICITED BIDS FROM SMALL BUSINESS CONCERNS FOR THE EXTENSION AND MODERNIZATION OF THE UNITED STATES POST OFFICE AT NORTHPORT, NEW YORK. BID OPENING WAS SCHEDULED FOR SEPTEMBER 9, 1965. SECTION 1 OF THE LABOR STANDARDS PROVISIONS, STANDARD FORM 19-A, OF THE IFB PROVIDED FOR THE PAYMENT, PURSUANT TO THE DAVIS-BACON ACT, 40 U.S.C. 276A-7, OF MINIMUM WAGE RATES AS PRESCRIBED IN A WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR. SECTION 3-3 OF THE SPECIFICATIONS OF THE IFB, RELATING TO SUCH MINIMUM WAGE RATES (GSA FORM 1083) READS AS FOLLOWS:

"3-3. THE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR IS ATTACHED SOLELY FOR THE PURPOSE OF SETTING FORTH THE MINIMUM HOURLY WAGE RATES REQUIRED TO BE PAID DURING THE LIFE OF THE CONTRACT AND IS NOT TO BE ACCEPTED AS A GUARANTEE, WARRANTY OR REPRESENTATION AS TO THE WAGE RATES INDICATED. UNDER NO CIRCUMSTANCES SHALL ANY MISTAKE IN ATTACHING THE APPROPRIATE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR AND IN THE WAGE RATES SET FORTH ENTITLE THE SUCCESSFUL BIDDER TO CANCELLATION OF HIS BID OR CONTRACT OR TO ANY INCREASE IN THE CONTRACT PRICE OR OTHER ADDITIONAL PAYMENT OR RECOVERY.'

SINCE COPIES OF THE WAGE RATE DECISION WERE NOT AVAILABLE AT THE TIME THE IFB PAPERS WERE ASSEMBLED FOR DISTRIBUTION TO PROSPECTIVE BIDDERS, THERE WAS INSERTED IN THE IFB IMMEDIATELY PRECEDING GSA FORM 1083 A PAGE NUMBERED 3-1, WHICH MADE REFERENCE TO THE APPLICABLE MINIMUM HOURLY WAGE RATES REQUIRED BY SECTION 3 AND STATED: "THIS SECTION OF THE SPECIFICATIONS WILL BE ISSUED PRIOR TO BID OPENING DATE.'

THE IFB PAPERS ALSO INCLUDED GSA FORM 1903, NOTICE TO BIDDER (CONSTRUCTION CONTRACT), WHICH LISTED THE FOLLOWING AMONG VARIOUS REQUIREMENTS TO BE CHECKED BY BIDDERS BEFORE BID SUBMISSION:

"3. HAVE YOU ACKNOWLEDGED, ON THE SF-21, BID FORM, RECEIPT OF ALL AMENDMENTS (IF ANY) ISSUED TO THE SPECIFICATIONS?

ON AUGUST 18, GSA ISSUED AMENDMENT NO. 1 TO THE IFB FURNISHING TO BIDDERS WAGE RATE DECISION NO. AE-1095, ISSUED JULY 23, 1965, BY THE SECRETARY OF LABOR, SETTING FORTH THE MINIMUM WAGE RATES FOR THE PROJECT, TO BE INSERTED IN THE IFB IN PLACE OF PAGE 3-1. THE AMENDMENT CARRIED A NOTATION READING AS FOLLOWS:

"IMPORTANT - BIDDER MUST ACKNOWLEDGE THE RECEIPT OF THIS AMENDMENT ON THE BID FORM, GIVING THE NUMBER AND DATE. FAILURE TO DO SO MAY BE GROUNDS FOR REJECTION OF THE BID.'

EIGHT BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 9. YOUR BID, DATED SEPTEMBER 9, IN THE AMOUNT OF $243,190, WAS LOW; ANDERSON CONSTRUCTION COMPANY, INC., WITH A BID OF $251,197, WAS SECOND OW; AND KENSIL-HEDEMAN COMPANY, INC., WITH A BID OF $252,350 WAS THIRD LOW. THE FIVE REMAINING BIDS RANGED FROM $257,800 TO $377,000. THE GOVERNMENT ESTIMATE WAS $307,800.

UPON EXAMINATION OF THE BIDS, IT WAS DISCOVERED THAT NEITHER YOU NOR ANDERSON HAD ACKNOWLEDGED THE AMENDMENT. ACCORDINGLY, THE TWO LOW BIDS WERE DETERMINED TO BE NONRESPONSIVE AND WERE REJECTED UNDER FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.404-2 (A), WHICH PROVIDES FOR REJECTION OF BIDS WHICH FAIL TO CONFORM TO AN ESSENTIAL REQUIREMENT OF AN IFB. NOTIFICATION OF THE REJECTIONS WAS EFFECTED BY LETTERS DATED SEPTEMBER 24.

YOUR POSITION, AS STATED IN CORRESPONDENCE WITH GSA AND IN YOUR LETTER OF OCTOBER 19, IS THAT THE REJECTION OF YOUR BID, WHICH WAS MORE THAN $9,000 LOWER THAN THE THIRD LOW BID, WAS AN ARBITRARY AND CAPRICIOUS ACTION ON THE PART OF GSA. IN THIS CONNECTION, YOU MAKE THE FOLLOWING POINTS:

1. NEITHER YOU NOR AT LEAST TWO OTHER BIDDERS RECEIVED AMENDMENT NO. 1.

2. AS A UNION CONTRACTOR, YOU ALREADY PAY TO YOUR EMPLOYEES WAGE RATES WHICH EXCEED THE MINIMUM PRESCRIBED IN THE DECISION OF THE SECRETARY OF LABOR; THEREFORE, THE PRESCRIBED RATES ARE ONLY ACADEMIC TO YOUR BID AND COULD NOT AFFECT THE NONRECEIPT OF THE IFB AMENDMENT, THUS MAKING THE DEFICIENCY PURELY MINOR OR TECHNICAL.

3. IN VIEW OF THE PROVISION IN SECTION 3-3 OF THE SPECIFICATIONS OF THE IFB QUOTED ABOVE PRECLUDING THE SUCCESSFUL BIDDER FROM CANCELING HIS BID OR RECEIVING ANY CONTRACT PRICE INCREASE OR OTHER RELIEF INCIDENT TO ANY MISTAKE IN ATTACHING THE APPROPRIATE WAGE DETERMINATION TO THE IFB, YOUR FAILURE TO ACKNOWLEDGE THE AMENDMENT DOES NOT GIVE YOU A "LOOPHOLE" IN THE EVENT YOU SEEK TO EVADE THE CONTRACT REQUIREMENTS.

4. THE GOVERNMENT SHOULD NOT OVERLOOK THE SAVINGS OF $9,000 THAT WOULD BE REALIZED FROM ACCEPTANCE OF YOUR BID.

ACCORDINGLY, YOU REQUEST THAT OUR OFFICE ASSIST IN RECTIFYING THE SITUATION.

AN INVESTIGATION BY GSA REGARDING THE DISTRIBUTION OF THE AMENDMENT IN QUESTION DISCLOSED THAT ON AUGUST 20, THE AMENDMENT WAS MAILED TO YOU AND TO 20 OTHER GENERAL CONTRACTORS AND TO OTHERS WHO HAD RECEIVED THE IFB UP TO THAT DATE. SUBSEQUENTLY, COPIES OF THE AMENDMENT WERE INCLUDED WITH THE BID FORMS FORWARDED IN RESPONSE TO REQUESTS FOR THE IFB RECEIVED AFTER AUGUST 20.

SECTION 1 OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, DIRECTS THAT CONTRACTS FOR CONSTRUCTION, ALTERATION AND/OR REPAIR, INCLUDING PAINTING AND DECORATING OF PUBLIC BUILDINGS OR PUBLIC WORKS, SHALL CONTAIN CERTAIN MINIMUM WAGE REPRESENTATIONS AND STIPULATIONS. WE HAVE HELD THAT A BLANKET PROVISION IN SPECIFICATIONS THAT CONTRACTORS SHALL PAY MINIMUM WAGE RATES, REGARDLESS OF WHETHER THE WAGE RATE DETERMINATIONS ARE RECEIVED BEFORE OR AFTER BID OPENING, DOES NOT MEET THE STATUTORY REQUIREMENT. 40 COMP. GEN. 48. IN THE INSTANT CASE, HOWEVER, THE LANGUAGE ON PAGE 3-1 OF THE SPECIFICATIONS PLACED ALL BIDDERS ON NOTICE THAT THE APPLICABLE MINIMUM WAGE RATES REQUIRED BY SECTION 3 WOULD BE ISSUED PRIOR TO THE BID OPENING DATE, AND THAT SUCH WAGE RATES WERE TO BE CONSIDERED IN PREPARING BIDS UNDER THE IFB. ACCORDINGLY, IT IS OUR VIEW THAT THE REQUIREMENT OF THE DAVIS-BACON ACT WAS NOT MET UNTIL AUGUST 20, THE DATE THE AMENDMENT WAS ISSUED FURNISHING THE WAGE RATE SCHEDULE. 157832, NOVEMBER 3, 1965.

TURNING NOW TO THE EFFECT OF YOUR FAILURE TO ACKNOWLEDGE THE AMENDMENT, IT IS THE GENERAL RULE THAT IF AN ADDENDUM TO AN INVITATION AFFECTS THE PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT, THE FAILURE OF THE BIDDER TO ACKNOWLEDGE ITS RECEIPT IN THE MANNER REQUIRED BY THE INVITATION RENDERS THE BID NONRESPONSIVE AND CANNOT BE WAIVED. 37 COMP. GEN. 785. THE BASIS FOR SUCH RULE IS THAT GENERALLY THE BIDDER WHO FAILS TO SO ACKNOWLEDGE WOULD HAVE AN OPTION TO DECIDE AFTER BID OPENING TO BECOME ELIGIBLE FOR AWARD BY FURNISHING EXTRANEOUS EVIDENCE THAT THE ADDENDUM HAD BEEN CONSIDERED, OR TO AVOID AWARD BY REMAINING SILENT. SEE 41 COMP. GEN. 550 AND DECISIONS THEREIN CITED.

THE PROCUREMENT REGULATION WHICH GOVERNS WAIVER OF MINOR INFORMALITIES OR IRREGULARITIES IN BIDS SUBMITTED UNDER GSA INVITATIONS TO BID IS FPR 1- 2.405, WHICH READS, IN PART, AS FOLLOWS:

"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. THE CONTRACTING OFFICER SHALL EITHER GIVE THE BIDDER AN OPPORTUNITY TO CURE ANY DEFICIENCY RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY IN A BID OR WAIVE SUCH DEFICIENCY, WHICHEVER IS TO THE ADVANTAGE OF THE GOVERNMENT. EXAMPLES OF MINOR INFORMALITIES OR IRREGULARITIES INCLUDE:

"/D) FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN AMENDMENT TO AN INVITATION FOR BIDS BUT ONLY IF:

"/1) THE BID RECEIVED CLEARLY INDICATES THAT THE BIDDER RECEIVED THE AMENDMENT, SUCH AS WHERE THE AMENDMENT ADDED ANOTHER ITEM TO THE INVITATION FOR BIDS AND THE BIDDER SUBMITTED A BID THEREON; OR

"/2) THE AMENDMENT INVOLVES ONLY A MATTER OF FORM OR IS ONE WHICH HAS EITHER NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, QUANTITY, QUALITY, OR DELIVERY OF THE ITEM BID UPON.'

SINCE THE WAGE RATES PAYABLE UNDER A CONTRACT DIRECTLY AFFECTTHE CONTRACT PRICE, THERE CAN BE NO QUESTION THAT THE IFB PROVISION REQUIRING PAYMENT OF THE MINIMUM RATES PRESCRIBED BY THE SECRETARY OF LABOR WAS A MATERIAL REQUIREMENT OF THE IFB AS AMENDED. AS STATED PREVIOUSLY, THE REQUIREMENTS OF THE DAVIS-BACON ACT WERE MET WHEN THE AMENDMENT FURNISHING THE MINIMUM WAGE RATE SCHEDULE WAS ISSUED, THE PURPOSE OF THE ACT BEING TO MAKE DEFINITE AND CERTAIN AT THE TIME OF THE CONTRACT AWARD THE CONTRACT PRICE AND THE MINIMUM RATES TO BE PAID THEREUNDER. 17 COMP. GEN. 471, 473. SUCH CIRCUMSTANCES, IT IS OUR VIEW THAT A BIDDER WHO FAILED TO INDICATE BY ACKNOWLEDGMENT OF THE AMENDMENT OR OTHERWISE THAT HE HAD CONSIDERED THE WAGE RATE DETERMINATION COULD NOT, WITHOUT HIS CONSENT, BE REQUIRED TO PAY THE WAGE RATES PRESCRIBED THEREIN BUT NOT SPECIFIED IN THE ORIGINAL IFB, NOTWITHSTANDING THAT HE MIGHT ALREADY BE PAYING THE SAME OR HIGHER RATES TO HIS EMPLOYEES UNDER AGREEMENTS WITH LABOR UNIONS. ACCORDINGLY, IN OUR OPINION, THE DEVIATION WAS MATERIAL AND NOT SUBJECT TO WAIVER UNDER THE PROCUREMENT REGULATION. FURTHERMORE, TO AFFORD YOU AN OPPORTUNITY AFTER BID OPENING TO BECOME ELIGIBLE FOR AWARD BY AGREEING TO ABIDE BY THE WAGE RATE SCHEDULE WOULD BE UNFAIR TO THE OTHER BIDDERS WHOSE BIDS CONFORMED TO THE REQUIREMENTS OF THE AMENDED IFB, AND WOULD BE CONTRARY TO THE PURPOSE OF THE PUBLIC PROCUREMENT STATUTES. B-149315, AUGUST 28, 1962; B-146354, NOVEMBER 27, 1961.

REGARDING YOUR ALLEGED NONRECEIPT OF THE IFB AMENDMENT, THE RECORD SHOWS THAT THE AMENDMENT WAS MAILED TO YOU APPROXIMATELY THREE WEEKS BEFORE BID OPENING. HOWEVER, EVEN WHEN THE NONRECEIPT BY BIDDER OF A MATERIAL IFB AMENDMENT IS ATTRIBUTABLE TO THE GOVERNMENT, NO EXCEPTION IS WARRANTED TO THE RULE PRECLUDING CONSIDERATION OF LATE BIDS OR MODIFICATIONS TO THE PREJUDICE OF OTHER BIDDERS. 40 COMP. GEN. 126.

CONCERNING THE SAVINGS OF $9,000 WHICH COULD BE REALIZED BY AN AWARD TO YOU, IT HAS LONG BEEN HELD THAT IT IS INFINITELY MORE IN THE PUBLIC INTEREST TO ABIDE BY THE RULES OF COMPETITIVE BIDDING THAN TO OBTAIN A PECUNIARY ADVANTAGE IN A PARTICULAR CASE BY THE VIOLATION OF SUCH RULES. 17 COMP. GEN. 554 (1938).

FOR THE REASONS STATED, WE FIND NO LEGAL BASIS FOR OBJECTION TO THE GSA ACTION IN REJECTING YOUR BID AS NONRESPONSIVE, AND YOUR PROTEST IS THEREFORE DENIED.